Fortune: How Nestlé plans to prove that paid parental leave makes business sense

Ian Pajer-Rogers |

From Fortune:

by Jared Lindzon

One reason the U.S. lags the rest of the world when it comes to paid parental leave and other family-friendly policies: Many companies have not yet been convinced that providing generous—and, yes, expensive—benefits will ultimately improve their bottom lines.

A new initiative from Nestlé may help make that argument.

Tuesday, at the Clinton Global Initiative in New York City, the company announced that it is launching a study that will collect data on the number of employees who use its parental leave and protection policy and how many of those employees remain at Nestlé six, 12 and 18 months after returning from leave.

Why is that significant? According to the left-leaning think tank Center for American Progress, the average cost of replacing an employee is 21% of their salary. What’s more, that percentage gets even larger when you zero in on executives and other highly-skilled workers.

With a workforce of 51,000 in the United States and over 300,000 around the world, Nestlé says it can provide a significant sample size to determine the impact that parental leave policies have on employee retention. The company plans to release its initial findings by the end of 2016.

“Right now, I think many companies are just looking at this as a cost, and they don’t have a lot of data to see it from a different vantage point,” says Paul Bakus, president of Nestlé corporate affairs. “We’ll be looking at whether or not the retention rates have changed over time, which we hope to be a positive outcome, and that success would encourage other companies to pile on and do this.”

Read the full article from Fortune.