REWARD
Progressive leave policies
Danny Done, managing director at Portfolio Payroll , sets out the details of what you need to be aware
E nhanced leave options, such as providing additional maternity leave or enhanced rates of pay whilst taking this leave, is something that many staff will respond to positively. The idea that a company is willing to go one-step further than the law instructs in assisting its employees with outside commitments, such as having a family, can be a key element in both attracting and encouraging the loyalty of members of staff. However, there is a big issue that can arise in these situations, and that issue is cost. Whilst enhancing leave may look good on paper, a business still needs to make money through staff doing what they are paid to do. Larger companies are probably in a better positon to offer this leave but even they may struggle if staff are permitted lengthy periods away from work for various reasons. When employers consider enhanced leave options, it is likely the first thing that comes to mind is family leave. For example, insurance company Aviva introduced a policy in 2017 which allowed all employees, regardless of their gender, to receive 26 weeks of leave on full pay following the birth of a child – a move that went significantly beyond the legal minimum requirements for family leave. Having said that, we are also increasingly seeing companies willing to go that one- step further. To give a further example, Deloitte’s Time Out scheme enables employees to take a four-week period of unpaid leave every year.
Whilst some of the more outlandish policies are likely not to be something many employers are considering they show a growing trend of how companies are adapting to the changing needs of the modern workforce. Studies have shown that an increasing number of employees want to move away from traditional nine- to-five brackets, and are more attracted to roles which offer enhanced leave and flexibility. By implementing such leave options employers can often see these policies as a way of standing out from competitors. Companies should also consider how enhanced leave can be key in tackling workplace inequality. In addition to gender pay gap reporting, there are increasing calls for such reporting requirements to be extended to ethnic minority employees. Offering enhanced leave options can be an efficient way of publicly tackling the issue of workplace inequality, demonstrating that the company is taking active steps to promote workplace equality and providing increased opportunity for individuals to avoid missing out on opportunities for progression. For example, working mothers may have to take increased amounts of time away from their job to facilitate childcare and meet costs. However, if their partners are offered a longer period of paid leave to share the responsibility, or if they themselves are offered increased pay during their maternity leave, it can help make it more possible for them to return to work earlier than they may have done.
Enhanced leave provisions are not going to be an option for every company. Indeed, taking this action can be expensive for a business, particularly those with smaller numbers of staff. At the end of the day, employees are paid to fulfil a role and, in their absence, their duties will likely need to be covered by someone else. Facilitating this cover can be costly for a company and, for that reason, allowing additional leave options may be something that some may wish to avoid. It should also be remembered that if such leave is provided for within a contract of employment, employers are risking a breach of contract claim if they seek not to offer it due to associated costs. If a company does want to go down this route but is concerned about the cost, it is advisable that they fully assess the feasibility of introducing such a policy before making any move to do so. After all, it may be better to avoid introducing such a policy at all than struggling to maintain it at a later date. Can the company afford to provide this leave consistently and, if not, is there an alternative option available that could achieve a similar outcome but at less risk to the company itself? Remember that though implementing such policies are likely to be popular with staff, trying to remove them later is likely to be very poorly received. It is very likely that the trend of offering enhanced leave is only going to continue in the coming years. Furthermore, with the recent introduction of parental bereavement leave, and specific provisions for neonatal and carer leave expected, it seems likely that employers will see increased changes to the law going forward. Implementing policies to get ahead of this could therefore prove to be beneficial in the long run. n
...employers can often see these policies as a way of standing out from competitors
| Professional in Payroll, Pensions and Reward | May 2020 | Issue 60 44
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