Few events that your employees experience are as life-changing as becoming parents. That’s why new parents often begin to look at their employee benefits in a new light. Now, after all, they’re relying on their employers for new kinds of important support as well as continued financial well-being.
As an HR professional, you may also want to take a fresh look at your company’s total rewards strategy to make sure you don’t silo parent-oriented benefits. This could happen if you single out important offerings such as parental leave and college savings programs, but don’t always integrate parenthood into the overall financial well-being program.
Why Parental Benefits Are Now More Key Than Ever
The importance of parental benefits may be even more pronounced than it used to be as a growing number of companies strive to reestablish in-person workforces.
Even with hybrid schedules, many new parents find it difficult to stay in the workforce. Motherly’s recent State of Motherhood report , which surveyed nearly 10,000 mothers, found that the number of stay-at-home mothers nearly doubled from 2022 to 2023, jumping by 10 percentage points from 15% to 25%. These numbers suggest that the Great Resignation is continuing for American mothers.
The more flexibility and support employers provide, the more willing parents may be to return to work. What’s more, employers who understand what employees at any stage of parenting need to maintain and elevate their financial well-being stand to gain enormous loyalty from their staff.
Today’s diverse workforces require customized programs that can help them achieve their individual and family financial wellness goals. This applies to parents of all ages of children as well as to parents of newborns.
Here’s how you can make sure your total rewards strategy is doing the best job possible to attract, retain, and support your parent employees.
Evaluate Your Existing Parental Benefits
Are your parent-oriented benefits offering the best help you can give to the widest variety of your parent employees?
Some of the most common benefits include parental leaves, paid time off, and college savings programs. Let’s look closely at each to help determine if your offerings are up to date and effective.
Paid Parental Leave
The Federal Family and Medical Leave Act (FMLA) allows eligible employees at large employers to take up to 12 weeks off after the birth or adoption of a child. But the Act does not require that an employee be paid for this time. And state laws on family medical leave can vary significantly.
Under the Federal Employee Paid Leave Act (FEPLA) of 2020, many federal employers offer 12 weeks of paid parental leave as a substitution for FMLA to civilian government employees who have been on the job for at least a year and then become parents through birth, adoption, or foster care.
Although this Act applies only to government employees, it sets a strong example for private and nonprofit organizations. Ask yourself whether your firm is keeping up with the most recent paid-leave policies? Are your leave policies inclusive — available to fathers and non-birth mothers, adoptive parents, foster parents, and parents who use surrogates?
Flexible Return to Work Schedules
Just in case it wasn’t already obvious, the pandemic has demonstrated how important flexible work hours are for parents. A flexible return-to-work policy for new parents can help ensure that new moms and dads continue to stay in the workforce. Some employers, such as PwC, for example, are finding that a gradual return can help with the transition. The firm allows parent employees to work a 60% reduced schedule at full pay for up to four weeks as they return to work.
For parents of slightly older kids, Mastercard has taken a different tack by creating a virtual Kids Club that offers educational games to keep children between the ages of five and 12 occupied while their parents are working at home.
Other companies have had success with increased remote schedules for reentering parents and more flexible PTO benefits that accommodate children’s illnesses and childcare gaps.
Whatever ways you decide to support the transition from parental leave to a return to work, be sure they’re clearly communicated to your workforce. Ideally, you want to have a sit-down with a new parent employee before the baby arrives to review all relevant benefits, including what’s expected during a return to work.
Inclusive Parental Benefits
Be sure your leaves, time-off, and return-to-work policies apply to all types of families. Parental benefits are a wonderful opportunity for building your inclusive benefits strategy. Same-sex couples with surrogates, adoptive parents, and foster parents need the same parental leave and flexible return-to-work policies as traditional birth mothers. And any type of new parent may need spousal or partner time off for bonding and caretaking. If your health plan covers fertility treatments, you may want to ensure that same-sex couples and other non-traditional families are covered by those as well.
Early College Savings Opportunities
The idea of saving for college starting as soon as a child is born is nothing new. But is your company doing everything it can to make that possible? Automatic payroll contribution to a 529 savings plan can be one of the most effective ways for all parents to save for their children’s education.
In addition, assistance with determining what 529 savings plan is best for your employees may also help. Employer-provided guidance can help parents navigate state tax laws, fees, maximums, minimums, and investment options among the different 529 Savings Plans available.
Get up to $300 when you bank with SoFi.
No account or overdraft fees. No minimum balance.
Up to 4.00% APY on savings balances.
Up to 2-day-early paycheck.
Up to $2M of additional FDIC insurance.
Customize Financial Well-Being Benefits to Help Parents
At this juncture, new parents likely need access to any financial planning and counseling services your financial wellness benefits offer to help navigate the money challenges parenting brings. In addition, overall wellness benefits can help reduce stress and increase productivity. Some examples:
• Access to legal services to help write wills, designate guardians, and change beneficiaries.
• Opportunities to sign up for any supplemental life insurance or disability income insurance your organization offers and guidance on why protection can be more of a priority for parents.
• House hunting and mortgage services. An expansion of the family often requires a move to a larger space, making home-buying benefits more relevant than ever.
• Help building an emergency fund while keeping track of other financial priorities.
• Financial planning services can help parents reset priorities and budgeting in light of a new addition to the family. Parents may also benefit from a retirement planning deep dive. Although planning for long-term goals may seem impossible in the midst of such a huge life event, it’s important for parent employees to remember that planning well for their own futures helps ensure the financial future of their children as well. No parents want to have to rely on their children financially in old age. Making sure that doesn’t happen begins now, and employers can help.
• Student loan pay-down programs can help parents handle their obligations from the past while still being able to plan for the future.
• Renew new parents’ engagement in overall wellness benefits such as weight loss, exercise, and stress reduction programs. If you don’t already, consider offering such programs to parents with children of all ages, since all parents (not just new parents) have stress to deal with.
The Takeaway
Becoming a parent is a life-changing occurrence for anyone. But employers can use this happy event to solidify financial well-being, loyalty, and productivity among their workers who are parents.
Photo credit: iStock/Tempura
Products available from SoFi on the Dashboard may vary depending on your employer preferences.
Advisory tools and services are offered through SoFi Wealth LLC, an SEC-registered investment adviser. 234 1st Street San Francisco, CA 94105.
SoFi Student Loan Refinance Loans, Personal Loans, Private Student Loans, and Mortgage Loans are originated through SoFi Bank, N.A., NMLS #696891 (Member FDIC), (www.nmlsconsumeraccess.org ). The 529 Savings and Selection Tool is provided by SoFi Wealth LLC, an SEC-registered investment adviser. For additional product-specific legal and licensing information, see SoFi.com/legal. 2750 E. Cottonwood Parkway #300 Cottonwood Heights, UT 84121. ©2024 Social Finance, LLC. All rights reserved. Information as of November 2024 and is subject to change.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
This article is not intended to be legal advice. Please consult an attorney for advice.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SOBD0723004