Is Netflix’s move to unlimited maternity and paternity leave an innovative new trend or unintended train wreck waiting to happen?
In this week’s announcement on their blog, Netflix’s Chief Talent Officer, Tawni Cranz, sparked a lengthy debate about the pros and cons of ‘unlimited’ policies for benefits like parental leave, vacation and sick time. Cranz’ announcement was, no doubt, crafted very carefully and it’s important to take the time to read and understand it.
While positioned as helping empower employees to have more control of their work-life balance, the question on everyone’s mind today is what this trend really means to the future of work.
What’s Behind “Unlimited” Time Off?
In the first sentence, Cranz writes, “At Netflix, we work hard to foster a ‘freedom and responsibility’ culture that gives our employees context about our business and the freedom to make their own decision along with the accompanying responsibility.”
This statement alone is critical. It alludes to an underlying dynamic tension between offering employees the freedom to manage their own work-life balance while also providing them with a clear understanding of their critical role in the company’s success.
This is, as the announcement mentions, a natural extension of the company’s unlimited vacation policy, which has been in place since 2002. The key difference, however, is that unlimited vacation policies often come with the unwritten expectation that employees are available to check-in remotely while they’re away.
“Unlimited” company policies like these may, in some situations, actually create more problems than they solve. When there is no defined allowance for something like vacation, for example, people tend to use less than they may have otherwise, as they feel pressured to manage the perceptions of others.
When companies give employees a defined allowance for vacation or leave, people may tend feel okay about using it all. But when it’s unlimited, people may hesitate to use the benefit for fear that others may perceive them as abusing it. A shining example of this backlash was Tribune Publishing, who rescinded its unlimited vacation policy due to employee complaints. Employees didn’t want to stand out as “the person that took too many vacation days.”
With parental leave, there is a definite start date and no expectations of working remotely. As parents of newborn babies try to navigate their own changing work-life priorities, they aren’t likely to want to return to work during that first year, especially if they are being paid while they’re away.
For new parents, it sounds ideal. But it’s yet to be seen whether, like unlimited vacation policies, the behaviors and expectations of their peers will affect their decisions.
Like Uncle Ben told Peter Parker all those years ago in the Spiderman comics – “With great power comes great responsibility.” While employees are empowered to make their own decisions with regard to parental leave, there is an underlying responsibility to their employer and to their coworkers.
Keeping Up With the Rest of the World
The reexamination of parental leave is not uncommon in the tech world. Other companies such as Twitter and Yahoo have also adapted their parental leave policies as one way to adapt their battle strategies in the ongoing war for talent.
Even Microsoft recently announced significant changes to their leave policy. They, like Netflix, explicitly made mention that this move is an effort to enhance the employee experience and to align their benefits policies with what they value in their culture.
But, this too may not be the whole story. As a multinational company, some see this move as an attempt for Netflix to align the US parental leave benefits with those of Canada, where new parents can receive coverage for a full year.
While it may be true that US parental leave norms seem decidedly different compared to many other nations, it must be noted that many countries also use employment insurance to cover a portion peoples’ pay while they’re out of work. Netflix will be paying peoples’ full salaries and shouldering 100% of the burden.
What You Need to Consider Before Following in Netflix’s Footsteps
If the idea of unlimited parental leave has sparked your interest, here are a few considerations to make, before you adopt a similar policy for your organization:
The size of your organization. Large companies can absorb the costs associated with unlimited parental leave. For smaller companies, however, it can be a massive burden to shoulder the lost productivity of their employee base. You’ll really need to analyze the risks versus rewards.
The potential of alienating childless employees. This argument comes up frequently in open discussions about the topic of parental leave and it’s a consideration when making policy decisions. Not to say that should stop you, but it is something worth being thoughtful about as you anticipate peoples’ reactions.
Contradicting your core values. This one can be a doozy. When organizations espouse certain values but do not align their internal systems and processes to those values, confusion and calamity can abound. Organizations who are intentional about this alignment tend to be much better positioned to drive performance over the long-term. A prime example is CVS Health and its policy changes around selling tobacco.
At the end of the day, I’ve been a business owner and leader long enough to realize that every well-intentioned decision comes with the potential for unintended consequences. But that doesn’t mean that the benefits don’t outweigh the costs.
I applaud companies for reexamining their systems and policies and working to align them with their values. It’s these misalignments that can potentially create chaos in organizations and it’s the differentiator that wildly successful companies use to keep their advantage in the market.
These are tangible efforts to shape company culture into a point of competitive advantage and, unintended consequences or not, I personally believe that working to align systems and policies to your values is never a bad thing.
This article originally appeared on Forbes.
