The Business Case for Inclusive Leave Programs

Jai Hooker@Work

The Business Case for Inclusive Leave Programs

By Ali Schaafsma, Director, Absence Consulting, Brown & Brown; Melanie Payton, CLMS, AVP, Absence Consulting and Audit Practice, Brown & Brown

As human resources professionals, we are entrusted with company culture, holistic health, and well-being. Too often, tensions run high and we find ourselves navigating a profound sea of changes in policies and practices. One grounding reference point to help ensure excellence at every turn is incorporating a central goal of fostering equitable, inclusive work environments that represent as many employee populations as possible, including age, identified gender, and sexuality. An often overlooked yet enormously impactful area of inclusivity in action is benefit and leave policy design. 

These are practical realities. Equitable, inclusive policies are a strategic necessity for employers to achieve recruitment and retention goals today. These policies will become increasingly important given that Generation Z makes up the largest workforce on record (expected to reach 30% of the U.S. workforce by 2030)1 and the most diverse. Data proves this point. According to the U.S. Chamber of Commerce Foundation, nearly 60% of companies with a focus on LGBTQ+ inclusive practices have better applicant pools, and 53% have higher employee retention rates.2 

In addition to recruitment and retention, inclusive benefit policies reduce liability. Title VII of the Civil Rights Act of 1964 protects employees against discrimination on the basis of sexual orientation or transgender status. It prohibits discrimination when providing fringe benefits, which include medical, hospital, accident, life insurance, and retirement plans; profit-sharing; bonus plans; leave; and other terms, conditions, and privileges of employment. Since the LGBTQ+ community constitutes 5.9% of the U.S. workforce, employers should identify and include benefits that support these employees.3 

Design Strategy 

Employers may think they understand the benefits that employees crave, but data and employee surveys may indicate otherwise. When reviewing your organization’s benefit policies, start by analyzing existing leave and disability program data to learn which types of leave employees are using. Keep in mind that the data may not tell the complete story, especially for those individuals whose leave needs do not align with traditional leave types.  

Using surveys to ask employees what they want and need can reveal valuable information and insight about how employers can improve the effectiveness and efficiency of leave programs. Partner with your diversity, equity, inclusivity, belonging, and accessibility (DEIBA) team and leaders of internal LGBTQ+ employee resource groups (ERGs) when you design a survey to assess whether you are asking the right questions and if employees will feel comfortable responding.  

Reconsidering Paid Leave  

Most U.S. employers with more than 100 employees offer traditional disability, sick, and vacation time. Many offer paid maternity and/or parental leave, and some generous employers offer paid caregiver leave. The intent is to ensure employees have the time they need across a broad spectrum of leave reasons and family definitions. But are the programs truly inclusive? Consider traditional maternity/parental benefits, which help younger workers starting families but often exclude other family planning strategies. To ensure inclusivity, expand the scope to include paid leave for adoption or surrogacy, and even time off to recover from permanent birth control procedures. After all, isn’t the choice not to have children part of family planning?   

In addition to family planning, consider adding domestic and/or life partners as covered relationships within paid time off programs to care for loved ones. Also assess whether paid leave programs include mental health conditions in meaningful ways. Nearly one-fifth of U.S. workers (19%) rated their mental health as fair or poor, with about four times more unplanned absences due to poor mental health than their counterparts who report good, very good, or excellent mental health.4 More than 60% of 543 members of the LGBTQ+ community between the ages of 18 and 25 years claimed fair or poor mental health.5 

While most disability benefits cover a mental health diagnosis, how much time away is allocated? And how easy is it for employees to access and use the benefits? As employers continue to see increases in mental health disability claims, it is time to review employee assistance programs (EAP) and revise their design to ensure it provides more meaningful and comprehensive care. For example, do your programs include free visits with a wide variety of practitioners, including those who have experience in the LGBTQ+ community? Could they? And how many employees know what is available? Consider the monetary investment for those EAPs and advertise the programs like your mental health depends on it. Or take it a step further and allow employees to use sessions with EAP providers to substantiate their disability benefits, for at least the initial approval of benefits. 

Unrealistic Expectations? 

It may not be feasible to address every employee’s need for leave within company policies. Employees are asking for paid leave for everything from natural disaster leave to grandparent, “pawternity,” and menopause leave. It’s challenging to provide leave for all and still run a business. But forward-thinking employers are creating more encompassing compassionate leave programs that allow time away for a multitude of reasons, which is inclusive of diverse employee populations. There is growing interest in the compassionate leave model as employers evaluate organizational goals, employee wants and needs, design potential, and associated costs.  

Here are two examples of multistate employers that adopted compassionate leave programs, which have been well-received by employees and leadership:  

  • Employer A has about 75,000 employees in nearly 50 states. The organization is offering a single bucket of paid time off (100% pay) for up to eight weeks in a single calendar year, which can be used for bonding and caregiving. The employer’s goals with the program are to: 
    • Attract and retain talent, especially in critical roles; 
    • Allow flexibility for how, when, and where employees work; 
    • Design programs that complement a productive workforce; 
    • Reduce burnout and the number of employees who sustain high stress levels; and  
    • Ensure compliance while increasing efficiencies. 
  • Employer B has about 70,000 employees in more than 20 states. The compassionate leave program design offers up to 10 days of paid time off (100% pay) in a single calendar year for home emergencies, menopause, bereavement (including pets), short-duration mental health needs, and other events that allow leaders to show compassion. Its goals are to: 
    • Demonstrate a continued acknowledgment of diversity, equity, and inclusion, and an understanding that individual situations and family dynamics are different for everyone; 
    • Provide flexibility and show compassion by allowing employees to take time without using vacation;  
    • Address emerging paid family and medical leave legislation, which often expands definitions of family and now includes bereavement and pregnancy loss (of any type); and 
    • Lead the market with a new and innovative approach. 

Inclusive Policy Language 

In addition to creating new types of leave and broadening existing leave types, some employers and states are removing gender pronouns from policies and handbooks in favor of more gender-neutral terms, such as they, their, and them. By incorporating more inclusive and intentional language into leave policies, employers ensure programs are more equitable and accessible, regardless of gender. 

This work also helps support legal compliance. The Department of Labor (DOL) and federal government have adopted anti-discrimination policies regarding gender identity by recognizing that discrimination based on gender identity or expression is sex discrimination.6  

The need for this type of protection is real. A study by the National Center for Transgender Equality7 indicated that most transgender respondents hid their gender transition or quit their jobs to avoid mistreatment at work. Nearly half of the study respondents did not ask their employers to refer to them with the correct pronouns (he, she, or they) out of fear of discrimination. The second iteration of this study, completed in 2022, reinforced why terms like “nonbinary” and “female-bodied” are becoming more prevalent in company policy language.8 This data illustrates the need for more attention to and awareness of diverse employee needs, especially considering how a person’s sense of belonging influences the employee’s productivity and tenure with organizations. 

That is one reason many companies have established gender-neutral policies, such as paid family leave programs that support all employees. The most recent policies use terms like parental, birth parent, or nonbirth parent. These programs provide equal paid leave time for new parents following the birth or adoption of a child and continue to accommodate evolving gender stereotypes that affect the LGBTQ+ community. Gender-neutral language intentionally acknowledges that family units come in many shapes and sizes, regardless of gender, sex, or sexual identity.  

As you evaluate policies for gender-neutral language, consider engaging with DEIBA partners and ERGs to understand your population’s specific needs and what success looks like with regard to adoption and/or acceptance of changes. Also explore opportunities to use more inclusive language within programs managed by vendors, such as allowing options other than male and female to designate gender when accessing benefit programs.  

Successful Marketing 

The way employer benefits are advertised influences your organization’s ability to recruit and retain young talent. While early post-pandemic studies confirmed employees were using more paid time off, employers should promote and encourage the use of paid time off- programs and combat negative perceptions associated with doing so to help employees overcome stress. This could be especially important for the LGBTQ+ community, particularly if your traditional leave program doesn’t appear to cover their reasons for leave. Consider employer disability plan and policy language. Also think about the experience of a transgendered employee trying to understand if they have access to income and job protection while receiving and recovering from critical transition care. Does their care fall under common cosmetic exclusions in a disability plan? Is their care considered elective and subject to preapproval for leave from supervisors?  

Ensure that your policies are clearly written and that employees understand them. Focus on facilitating positive conversations, providing support structures, and modeling healthy approaches to taking time off. Consider: 

  • Advertising benefit programs at regular intervals throughout the year; 
  • Ensuring leaders are aware of benefit programs, and encourage employees to use them; 
  • Asking leaders across the organization to talk about program offerings, and provide incentives (bonus points) to leaders who take time away and share their experiences; and 
  • Bragging about your unique benefit offerings on social media. Younger generations are taking mental notes for when it is time for a job move. 

Integrating DEIBA into your benefit policies fosters belonging and respect. By prioritizing these values, employers can unlock employees’ full potential, drive innovation, increase productivity, and ensure long-term success. 

References 

  1. U.S. Bureau of Labor Statistics. Labor Force Statistics from the Current Population. Retrieved from https://www.bls.gov/cps/demographics.htm  
  2. Kumar, Vibha Sathesh. “Gen Z in the Workplace: How Should Companies Adapt?” Imagine. Johns Hopkins University. April 18, 2023. Retrieved from imagine.jhu.edu/blog/  
  3. Bowdish, Lawrence, and Zellner, Sara. “Business Success and Growth Through LGBT-Inclusive Culture.” U.S. Chamber of Commerce Foundation. April 9, 2019. Retrieved from https://chamber-foundation.files.svdcdn.com/production/documents/Chamber-Incorporating-Inclusion-Final.pdf?dm=1694110518  
  4. Sears, Brad, et al. “Public and Private Sector Employees’ Perceptions of Discrimination Against LGBTQ People.” Williams Institute, UCLA School of Law. April 12, 2021. Retrieved from williamsinstitute.law.ucla.edu/publications/employee-perception-discrim/     
  5. Witters, Dan, and Sangeeta Agrawal. “The Economic Cost of Poor Employee Mental Health.” Workplace. Gallup. July 21, 2023. Retrieved from www.gallup.com/workplace/404174/economic-cost-poor-employee-mental-health.aspx   
  6. Marken, Stephanie. “LGB Gen Z Members More Anxious and Stressed Than Peers.” News. Gallup. Nov. 21, 2023. Retrieved from news.gallup.com/opinion/gallup/507881/lgb-gen-members-anxious-stressed-peers.aspx    
  7. National Center for Transgender Equality. 2015 U.S. Transgender Survey. Retrieved from https://transequality.org/issues/us-transgender-survey  
  8. Carter, Kelly. “The Hartford’s New Study Finds Nearly Half of LGBTQ+ Workers’ Mental Health at Work Affected by News, Current Events, Less Likely to Seek Care.” June 21, 2023. Retrieved from newsroom.thehartford.com/newsroom-home/news-releases/news-releases-details/2023/The-Hartfords-New-Study-Finds-Nearly-Half-of-LGBTQ-Workers-Mental-Health-At-Work-Affected-By-News-Current-Events-Less-Likely-To-Seek-Care/default.aspx#:~:text=Nearly%20half%20(47%25)%20of,and%2013%25%2C%20respectively.  

* 2022 survey results were not yet available as of the date of this article.