In a changing workplace, managing employee leave—from knowing how much paid time off to give to ensuring employees get paid—can be difficult, but it doesn’t have to be. Here, we share data on how companies of various sizes are managing leave.
2022 leave benchmarks are here! Check out how your peers have updated their policies, plus data from three times as many employers and more detail for medical leaves.
It’s no secret that Covid-19 has disrupted nearly every industry as companies have been forced to navigate operational challenges while also addressing the evolving needs of their people. For working parents, juggling remote work on top of remote learning has been particularly challenging.
On top of this logistical nightmare, employees in tech are grappling with mental health challenges: in 2021, 51 percent of tech professionals have been diagnosed with a mental health condition and over 55 percent of people reported burnout.
With all the combined challenges the pandemic has introduced and exacerbated, employees have had nearly two years to consider their values and priorities. For many of us, we’ve realized that what really matters to us is not snacks or ping pong tables, but when our company steps up in the most critical moments of our lives—whether it’s having a baby, caring for an older parent, or taking time off to recover.
In response to this change in what employees expect, businesses are increasingly reevaluating benefits such as leave policies that are especially relevant in these pivotal life moments. Given the highly competitive talent market, it’s not surprising that tech companies specifically are leading the charge here in expanding their policies to better support caregivers and working parents.
To better understand just what these policies look like, we surveyed 31 venture-funded tech companies in 2020.
In this article, we’ll walk through innovative strategies from companies like Gem and Vercel, who are paving the way when it comes to parental leave, and some of the results they’ve seen from adjusting their policies. And if you’re wondering what the baseline is for how your peers are handling leave as inspiration for rolling out your own program—we’ve got you covered there, too.
According to our survey, at early stage tech companies, non-birthing parental leave policies range from 6 weeks to 16 weeks, with the average employer providing 9.8 weeks of leave. For birthing parents, these same companies offer anywhere from 8 to 20 weeks leave, with the average company providing 13 weeks, all paid at 100 percent.
One example of an organization that recognized the need to better support working parents throughout the pandemic is Vercel, a San Francisco-based startup revolutionizing front-end development.
“Having a child is one of the most formative experiences a family can go through,” says Shelby Garrison, Head of People and Culture at Vercel. “We are incentivized to make this a really amazing experience for them because it not only shapes their experience as an employee of Vercel, but shapes how invested they feel in Vercel.”
After working with the Cocoon team to better understand what “normal” looked like (but also noting that she didn’t want to stop at that!), Shelby decided to increase Vercel’s non-birthing leave in the U.S. from 10 weeks to 16 weeks. Additionally, Shelby looked past “industry-standard” tenure requirements: now at Vercel, all U.S. employees (regardless of whether they’ve been at the company for one day or one year) are eligible for a 100 percent paid 16 week leave. For Shelby, it was important as part of their talent strategy to highlight that “If you start at Vercel and you get pregnant tomorrow, you’re eligible for leave. We wanted to do right by the individual and also, we’re a startup. So we thought, what are other levers we can pull to make coming to this company as compelling as possible?”
Top tip: Recruiting expecting parents can be a key part of your talent strategy. Removing traditional “tenure requirements” is a targeted way to do this.
While it may sound scary to go from zero to 100—Shelby built Vercel’s leave and benefits infrastructure from scratch—her forward-thinking and people-first strategy is set to pay off in the talent market in particular. After all, removing their eligibility requirement already makes Vercel a much more competitive employer with a very key group of recruits—those who want to start families in the near- to medium-term future.
“My job as the head of people and culture is to push things as far as I possibly can to support our people,” Shelby says. “When our people are more supported, they’re more successful. And then we, as a company, succeed even further.”
As tech companies grow and mature, increasing resources as well as headcount, they typically also feel the pressure to re-adjust their policies. Of the companies we surveyed, one especially generous company offers a substantial 6.5 months of leave for birthing parents, while the average employer offers 15 weeks for birthing leave and 11 weeks for non-birthing parents.
For Gem, a San Francisco-based software company supercharging recruiting, it was important to understand what their peers were doing when analyzing their own policies.
“Having access to Cocoon’s benchmarking data was helpful when we were first implementing our new benefits system and reviewing our policies to ensure they were competitive in the market around how much time we offer our employees,” says Lara Poncia, Gem’s Director of HR.
Don’t worry—there’s no expectation to immediately update your policy to give half a year of leave. As Lara says, a great starting place is simply assessing the landscape to understand how your benefits stack up to companies of a similar size and in a similar industry.
So, if you’re doing this data digging at a growth stage company, our research shows that almost half of tech companies of this size offer at least 16 weeks parental leave for birthing parents, and all 11 companies we surveyed offer the time at 100% pay.
Top tips: 1. A generous leave policy doesn’t need to break the bank & 2. Design your policies for where your organization will be a year from now
If such a generous policy sounds like a hard sell to your leadership team, the facts may (pleasantly!) surprise you. Having a generous leave policy doesn’t have to break the bank. In fact, a significant portion of your 100% paid policy can be funded by state and insurance policies. Cocoon makes it quick and easy for employees to get paid from these sources, even saving companies money.
And if you’re hesitant that it may be too soon to implement such competitive leave policies, many of the best people leaders craft policies based on where they expect their company to be a year from now. Proactively planning for the future allows companies to attract and retain talent going into the next phase of scale.
Out of the 10 companies we surveyed which fall into the late stage and public category, 90 percent of companies offer at least 10 weeks leave for birthing parents with the average offering at 14 weeks; for non-birthing parents, the average leave is 9.8 weeks.
Unsurprisingly, this group tends to offer the most generous paid leave benefits—and so to compete for talent, they need to differentiate in other ways.
If your company falls into this category and you’re wondering which levers you can pull beyond actual paid time off, you’re in great company—companies at this stage tend to get creative. Some have added manager training to ensure smooth transitions from and back to the workplace; others are focused on DEI efforts to make leave as inclusive as possible.
Another major benefit many late and public stage companies offer? Easing employees back into work with ramp back programs, supporting them with more flexible hours as they adjust to their new normal.
Top tip: Get creative with your offerings beyond paid leave with policies like ramp back programs, inclusive leave for non-birthing parents, manager training, and a simplified, headache-free leave process for employees.
One of the biggest trends we’ve seen is layering in flexible return to work policies. Dropbox was one of the early pioneers here when they rolled out their “transition week” concept, in which employees receive 100% pay for working at 60% capacity in their first week back. This helps employees transition back into their role after a long leave, and focus mostly on catching up and getting settled with new responsibilities like childcare and pumping time.
Competitive paid leave is more or less table stakes for these larger players, so it’s important they find new and innovative ways to support employees taking leave.
It’s clear that people leaders are responding to the needs of their employees and recognizing the importance of employee benefits, particularly when it comes to leave, flexibility, and mental health.
Shelby takes inspiration from Maslow’s hierarchy of needs when discussing her personal response and philosophy toward employee leave and benefits. “People thrive when their most basic needs are met,” she explains. “You need physical safety, psychological safety, rest...all of these things are required to get people to perform at their highest potential.”
While our focus today has largely been on what your policy looks like when it comes to supporting people through leave, it’s important to remember that it’s not just about time and pay.
The reality is, it doesn’t matter how generous your leave benefit is, if getting access to, and being paid during, those 16 weeks is challenging. In our prior professional lives, we saw that the leave experience can be so difficult, friends would tell us how they were literally on their laptops struggling to apply for disability insurance while being wheeled into a c-section. A people leader we admire once told us: “These key points are rare experiences—when you can fall more in love or less in love with your company.” It’s critical that we get these experiences right, and at Cocoon, we’re here to make that experience simple, instant, and deeply cared for.
