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It’s a bittersweet moment for employers: an employee walks into his or her manager’s office to declare the need for maternity or parental leave in the coming months.

Congratulations are offered to the mom- or dad-to-be and maybe a few other pleasantries are traded before that manager or HR professional asks a couple of inevitable questions: When do you plan to start your leave, and when will you be returning to work?

They should be forgiven for shifting the conversation from the impending arrival of their employee’s bundle of joy, to the practicalities of managing a fast-moving workplace. Such is the stark reality of doing business in an era of rapid innovation and hyper-competition.

Indeed, parental leave can place a major burden on organizations, particularly small and medium-sized ones, that are often left scrambling to find a temporary replacement for an employee on leave. And that assumes that making a short-term hire is even in the cards. In many cases, organizations of all sizes will simply lack the budget to hire a replacement, while others may not be able to find a temporary fit with the right skill set.

With the introduction of the 2017 federal budget, they seemingly have a new hurdle to overcome—or do they?

 

Trudeau Liberals expand parental leave benefits

The budget made a point to make employment insurance benefits more flexible by allowing parents to receive parental benefits for up to 18 months from the current 12 “at a lower benefit rate of 33 per cent of average weekly earnings. EI parental benefits will continue to be available at the existing benefit rate of 55 per cent over a period of up to 12 months.”

According to the budget (hyperlink to: http://www.budget.gc.ca/2017/docs/plan/chap-01-en.html#Toc477707320)  women will also be allowed to “claim EI maternity benefits up to 12 weeks before their due date—expanded from the current standard of 8 weeks—if they so choose.”

The initial reaction from employers across the country was a collective groan. ‘How could the government increase parental leave time by 50 per cent, yet expect us to remain competitive and profitable?’, many wondered. Other organizations that offer parental leave ‘top up’ benefits, raised questions over whether these new rules might force them to expand time frames or incur higher costs to account for the enhanced parental leave benefits. While their concerns are justified, the reality is that expanded parental leave likely won’t impact very many organizations. It may, in fact, even help some. How?

 

Potential for greater workforce stability

While the time a parent (or parents) can take off work as part of the federal parental leave entitlement was just expanded by a whopping 50 per cent, organizations need to understand that only a relative handful of employees will ever be able to take advantage of this benefit to its fullest extent.

That’s because in most cases, only a select few employees can afford to take a two-thirds cut in salary—particularly in costly centres such as Toronto and Vancouver. Still, others might recoil at the thought of being out of the workforce for such a protracted period. Even for the select few staffers who do opt to spend more time with baby, the decision comes with advantages for their employers.

Organizations often struggle to fill maternity-leave contracts for a year or less. Often these temporary engagements are ambiguous (‘The employee you’ll be replacing will return to work in either 10 or 12 months—she plans to give us an update on her intentions in a few months’) giving a prospective hire reasons to question taking on the position in the first place. In theory, replacing an employee on parental leave for 18 months is easier, providing a longer engagement for their replacement and greater stability for the organization.

In other words, expanded parental leave is likely inconsequential (maybe even beneficial) for your workplace. That’s especially true in situations where positions require a steep learning curve. Why? By the time a temporary worker is trained and productive, they typically need to start looking for a new job. With an 18-month leave, any training investment is likely to pay off because temporary workers can become fully productive in their roles.

But as always, be sure to maintain open and regular dialogue with employees before or during parental leave periods. Understanding their plans is the first step to maintaining productivity and minimizing costs and other workplace disruptions during their absence.