The hit television series ‘Leave It to Beaver’ aired for the last time in 1963, and since then, the American family has become increasingly diverse on multiple dimensions. Yet, one constant endures: becoming a parent is both a magical and scary life transition, regardless of whether you are married, cohabiting, single, straight or gay, biological or adoptive or whether it is a first child, second or third child.

Given the realities of life in America, most expectant parents are also employed, so how the transition to parenthood is experienced can have repercussions far beyond the baby’s first few months of life, not just for families and communities, but also for work and workplaces.

A smooth transition

Evidence is mounting that helping new parents through this transition is good for business because it’s good for families. To be sure, business practices by themselves cannot ensure a smooth transition to parenthood, but they can play a key role.

"Employers who invest in the transition to parenthood by offering paid leave stand reap the benefits of having their new parents to return to work ready to perform at their best."

Unlike all other countries in the world (besides Papua New Guinea), most expectant parents in the U.S. do not have access to paid parental leave, and many don’t even have access to unpaid leave. Yet, research shows that paid parental leave is a key factor in ensuring that new parents return to work ready to perform at their best. Even when all goes according to plan, the delivery of a new baby and the adjustment to caring for an infant is a huge physical and emotional transition for parents. Sleep deprivation is par for the course as the baby wakes up several times during the night to feed. Visits to the pediatrician are frequent. Arranging stable and good child care can be very time consuming, let alone anxiety producing

Measuring the impact

Employed parents who do not have access to paid parental leave often have no choice but to take short leaves of less than six weeks. This can set up a precarious situation for both the employer and the employee. As Jane Waldfogel of Columbia University, one of the country’s foremost experts on the impacts of parental leave on families, says, “Long unpaid leave is not an option for most new parents, especially if they are low-income workers. Employers who provide only short, unpaid leave, therefore, find that new parents, especially birth mothers, either come back exhausted, anxious and with negative feelings about their job or they quit. In either case, the employer is making a short-sighted decision with long-term consequences for the business.”

CUTTING IT CLOSE: Parents with full-time jobs who do not have access to paid parental leave often have no choice but to take short leaves of less than six weeks

New parents at KPMG LLP, an audit, tax and advisory services firm with more than 23,000 people in the U.S., told firm leaders that not worrying about the financial consequences of taking time to bond with a new child and adjust to the new responsibility of being a parent would “make a huge difference in how they felt about the firm,” according to Barbara Wankoff, Director of Workplace Solutions. As a result, the firm more than doubled its parental leave benefits and now provides up to 12 weeks of 100 percent paid short-term disability leave plus six weeks of parental leave for primary caregivers at 100 percent of wage replacement. As Wankoff explains, “We want to send a clear message to all our expectant parents: we want you back.”

The changing workforce

Small employers can also gain from offering paid parental leave. Caliper, a consulting firm with 140 employees in the U.S. headquartered in Princeton, New Jersey and a 2013 and 2014 When Work Works Award winner, provided paid parental leave before New Jersey passed the Family Leave Insurance law. In addition, Caliper allows employees to “bank” unused vacation time for when they need time off for family reasons—time that would otherwise be unpaid under FLMA. As Margaret McLaughlin, Senior Vice President for HR at Caliper, explains, “Our workplace practices acknowledge the changing workforce, including the reality of dual-income families. As a result, we have had zero voluntary attrition in the last three years. That allows us to maintain a continuity of high level service that is seamless to our clients, and saves us the significant costs in time and money we would otherwise spend recruiting and onboarding.”

California was the first state to require most employers to provide up to six weeks of wage replacement leave to either bond with a new child or care for a seriously ill family member, funded through an employee-paid payroll tax. A 2014 report on the California Paid Family Leave program confirms that the benefits far outweigh the costs to both employers and employees.  Asked about the impact of the program on productivity, profitability/performance, turnover and morale, 87 percent of employers reported that the program had not resulted in any cost increases, and some employers said it had generated cost savings “by reducing turnover and/or by reducing their own benefits costs.” Interestingly, small businesses (with fewer than 100 employees) were less likely than larger employers to report any negative effects.

Employers who invest in the transition to parenthood by offering paid leave reap the benefits of having their new parents to return to work ready to perform at their best. As Maryella Gockel, EY Americas Flexibility Leader, says, “The better our families are, the better our people are.”