Last month, prospective parents in Silicon Valley had reason to cheer: Adobe, Microsoft and Netflix announced that new moms and dads could take off, respectively, 12 weeks, 16 weeks and one year—paid. (At Adobe, birth moms can take 10 additional weeks of medical leave, and at Microsoft, they can take 8 more weeks of paid disability.) The companies joined Google (18 weeks for birth moms) and Facebook (four months for moms and dads) in their generous parental leave policies. Can it be long before the rest of corporate America gets with the progressive program? Patty McCord, principal at Patty McCord Consulting and former chief talent officer at Netflix who introduced unlimited vacation days, weighs in on the change happening in Silicon Valley—and hopefully beyond.
Need for Reform
Of the 34 countries in the OECD, an organization of European and other developed economies, the U.S. is the only nation not to mandate paid maternity leave. (The Family and Medical Leave Act provides for 12 unpaid weeks.) “We’re behind the times when it comes to many labor practices,” McCord says. “Most companies just do what’s been done before, and many policies come from our industrial past, when workers were mainly men and employed in factories.”
The lack of paid maternity or paternity leave also stems from the human resources tradition of treating employees like they’re all the same, and even the enemy, McCord adds. “Instead of trying to provide the flexibility that new parents need, companies are looking to protect themselves from the few rare exceptions who might take advantage of the system or sue them,” she says.
Big Attitude Adjustment
But at Netflix, where she headed HR from 1998 to 2012, McCord with CEO Reed Hastings pioneered the radical policy of treating employees as though they are adults who love their jobs—and can be trusted to put the firm’s interests first. “We wanted to create a company where we wanted to work, and with the company full of engineers, including Reed, who tend to call things as they see them, we started to realize that a lot of HR best practices didn’t make sense,” McCord says.
So among their reforms, they started giving generous severance packages instead of paltry raises to underperformers, stopped requiring formal performance reviews that wasted people’s time and switched to unlimited sick and vacation days, trusting employees to get their work done. “A year of paid parental leave is a logical extension of unlimited vacation,” McCord notes. “It’s a matter of giving employees the freedom as well as the responsibility to do their jobs.”
Beginning of a Movement
Innovating talent management at Netflix or any high-tech firm isn’t undertaken for purely altruistic reasons, however. “The competition in the Bay area is fierce for educated, highly-skilled workers, many of whom are in their 20s and 30s and about to start their families,” McCord says. “And a reputation for having a parent-friendly culture is going to be attractive to them, especially to women, who are in high demand because there aren’t enough of them in science, technology, engineering or math.”
But ultimately, McCord thinks that progressive parental leave will spread across the country to companies that are looking to snag the best minds and talent. “If it’s like share options, which were introduced by Silicon Valley as a part of compensation, it might take 10 years,” she says. But then again, Silicon Valley is now less a geographic location and more a name for the world of high-tech enterprises, so with start-up hotbeds sprouting everywhere, from Austin to Philadelphia, generous paid parental leave could become common policy even sooner than that.
Patty McCord will be speaking on panel “Pioneering Pay Equity: Strategies to Bridge the Gap, Own Your Value and Negotiate Your Worth” at the 2015 Texas Conference for Women.