Article

Equal at Work, Equal at Home

Equal parental leave policies are key to addressing the UK gender pay gap.

Par Nitesh Prakash, James Hadley, et Katy Neep

First published on mars 06, 2023
min


At a Glance Unequal parental leave creates a structural barrier to gender equality—without equal parental leave, up to 70% of the UK workplace gender pay gap could persist. Equal parental leave is gaining momentum among UK employers, with 33 prominent employers leading the way. The benefits include increased retention, employee satisfaction, and progress on diversity, equity, and inclusion (DE&I). Industry-leading employers are also investing in benefits and culture to create a supportive environment for all parents. Progress in gender equality in the UK workplace has been slow in the last decade. In fact, with the cost-of-living crisis forcing more women out of the workforce, we are at risk of moving backwards. Yet, a critical structural barrier is often overlooked—unequal parental leave policies. Written in collaboration with Written in collaboration with In the UK today, we need to improve the status quo for parental leave. Both statutory provisions and employer-enhanced policies provide significantly higher maternity vs. paternity leave provisions, positioning women as the primary caregiver and setting a precedent for long-term imbalances in who works vs. who cares for children. This trend penalises mothers via lower earnings and slower promotion rates, creating a “leaky bucket” for employers’ female leadership pipeline. Our analysis shows that without equal parental leave, up to 70% of the UK workplace gender pay gap could persist. Enter equal parental leave: A policy with growing momentum An increasing number of cross-industry UK companies are addressing gender inequality by introducing equal parental leave policies, under which all parents, regardless of gender, receive the same amount of leave and pay. By providing parents the flexibility and financial support to take extended time off for childcare, employers are alleviating the work vs. care trade-offs that all parents, though disproportionately women, must make. Since 2016, 33 UK companies have publicly announced a move to an equal parental leave policy, most commonly offering six months of fully paid leave. “First movers” in this regard are Abrdn, Aviva, Bain & Company, Diageo, Goldman Sachs, John Lewis, Unicef, and Vodafone Group. As this trend continues, we expect this policy will increasingly become “table stakes” for employee benefit packages (Figure 1). Figure 1 Although the UK is Europe’s second-largest economy, its statutory parental leave provisions are among the least generous First movers see benefits of equal parental leave policies An equal parental leave policy requires investment that unlocks a range of compelling benefits. Many first movers have found the bottom-line impact to be positive. Our analysis suggests that six months of fully paid equal parental leave—with limited paternity leave as a starting point—costs around 1%–2% of the annual payroll for a UK employer. Employers weigh these costs against the benefits (Figure 2), such as: attracting and retaining employees narrowing the gender pay gap increasing employee engagement and satisfaction fostering more diverse and inclusive teams making a bold public corporate social responsibility commitment Figure 2 Investment in equal parental leave unlocks a host of compelling benefits Senior leaders who pushed for an equal parental leave policy say that the adoption of this policy was one of their most enduring achievements. Policy alone is insufficient: Investment in benefits, culture is required For employers considering adopting an equal parental leave policy, a key lesson from case studies is that the policy alone is insufficient. Investing in additional benefits and a supportive culture, with role modelling from the top, empowers parents to access the policy fully. There are several small steps to develop basic parental support infrastructure before rolling out more innovative benefits and resources. Employers should consider putting in place an active parents’ network, robust flexible work framework, proactive human relations communication, and training for managers of new parents. As employers adjust to more prolonged absences, they can identify diverse sources of short- and long-term resourcing to minimize the cost impact. In many cases, they can use these extended leave periods to create development opportunities for their teams. Bain UK institutes equal parental leave to attract and retain talent In 2019, Bain & Company instituted an equal parental leave policy in the UK, offering all new parents up to 52 weeks of leave, with the first 29 weeks fully paid. The change was a critical step on the journey towards gender equity. Our team built a robust business case designed to attract and retain valuable talent at the mid-management level. Employee response to our new policy has been overwhelmingly positive across genders, tenures, and functions. We continue to work towards best-in-class execution via initiatives such as consistent leadership advocacy, visible senior role models, and proactive human relations communication. We are excited to see the emergence of new cultural norms in our business, where parents feel empowered to take extended time away from work to support their families. A call to action Beyond the business rationale for equal parental leave, first movers are unwavering in their view that this is “the right thing to do”. Unfortunately, without a commitment from across the UK employer landscape, there will continue to be structural barriers to gender equity in our workplaces. Employers can have a real and lasting impact by adopting equal parental leave—for individuals, families, and society at large. About Business in the Community Business in the Community (BITC) and its network of business members are leading a movement to create a fair and sustainable world in which to live and work. Formed in 1982, and with His Majesty King Charles III as Royal Founding Patron, it is the largest and longest-established membership organisation dedicated to responsible business. BITC works and campaigns with more than 600 members to continually grow their responsible business practices, uniting their efforts for greater social and environmental impact in our communities.

At a Glance

Unequal parental leave creates a structural barrier to gender equality—without equal parental leave, up to 70% of the UK workplace gender pay gap could persist.
Equal parental leave is gaining momentum among UK employers, with 33 prominent employers leading the way. The benefits include increased retention, employee satisfaction, and progress on diversity, equity, and inclusion (DE&I).
Industry-leading employers are also investing in benefits and culture to create a supportive environment for all parents.

Progress in gender equality in the UK workplace has been slow in the last decade. In fact, with the cost-of-living crisis forcing more women out of the workforce, we are at risk of moving backwards. Yet, a critical structural barrier is often overlooked—unequal parental leave policies.

Written in collaboration with

In the UK today, we need to improve the status quo for parental leave. Both statutory provisions and employer-enhanced policies provide significantly higher maternity vs. paternity leave provisions, positioning women as the primary caregiver and setting a precedent for long-term imbalances in who works vs. who cares for children.

This trend penalises mothers via lower earnings and slower promotion rates, creating a “leaky bucket” for employers’ female leadership pipeline. Our analysis shows that without equal parental leave, up to 70% of the UK workplace gender pay gap could persist.

Enter equal parental leave: A policy with growing momentum

An increasing number of cross-industry UK companies are addressing gender inequality by introducing equal parental leave policies, under which all parents, regardless of gender, receive the same amount of leave and pay. By providing parents the flexibility and financial support to take extended time off for childcare, employers are alleviating the work vs. care trade-offs that all parents, though disproportionately women, must make.

Since 2016, 33 UK companies have publicly announced a move to an equal parental leave policy, most commonly offering six months of fully paid leave. “First movers” in this regard are Abrdn, Aviva, Bain & Company, Diageo, Goldman Sachs, John Lewis, Unicef, and Vodafone Group. As this trend continues, we expect this policy will increasingly become “table stakes” for employee benefit packages (Figure 1).

Although the UK is Europe’s second-largest economy, its statutory parental leave provisions are among the least generous

First movers see benefits of equal parental leave policies

An equal parental leave policy requires investment that unlocks a range of compelling benefits. Many first movers have found the bottom-line impact to be positive. Our analysis suggests that six months of fully paid equal parental leave—with limited paternity leave as a starting point—costs around 1%–2% of the annual payroll for a UK employer.

Employers weigh these costs against the benefits (Figure 2), such as:

attracting and retaining employees
narrowing the gender pay gap
increasing employee engagement and satisfaction
fostering more diverse and inclusive teams
making a bold public corporate social responsibility commitment

Investment in equal parental leave unlocks a host of compelling benefits

Senior leaders who pushed for an equal parental leave policy say that the adoption of this policy was one of their most enduring achievements.

Policy alone is insufficient: Investment in benefits, culture is required

For employers considering adopting an equal parental leave policy, a key lesson from case studies is that the policy alone is insufficient. Investing in additional benefits and a supportive culture, with role modelling from the top, empowers parents to access the policy fully.

There are several small steps to develop basic parental support infrastructure before rolling out more innovative benefits and resources. Employers should consider putting in place an active parents’ network, robust flexible work framework, proactive human relations communication, and training for managers of new parents.

As employers adjust to more prolonged absences, they can identify diverse sources of short- and long-term resourcing to minimize the cost impact. In many cases, they can use these extended leave periods to create development opportunities for their teams.

Bain UK institutes equal parental leave to attract and retain talent

In 2019, Bain & Company instituted an equal parental leave policy in the UK, offering all new parents up to 52 weeks of leave, with the first 29 weeks fully paid. The change was a critical step on the journey towards gender equity.

Our team built a robust business case designed to attract and retain valuable talent at the mid-management level. Employee response to our new policy has been overwhelmingly positive across genders, tenures, and functions.

We continue to work towards best-in-class execution via initiatives such as consistent leadership advocacy, visible senior role models, and proactive human relations communication. We are excited to see the emergence of new cultural norms in our business, where parents feel empowered to take extended time away from work to support their families.

A call to action

Beyond the business rationale for equal parental leave, first movers are unwavering in their view that this is “the right thing to do”. Unfortunately, without a commitment from across the UK employer landscape, there will continue to be structural barriers to gender equity in our workplaces. Employers can have a real and lasting impact by adopting equal parental leave—for individuals, families, and society at large.

About Business in the Community

Business in the Community (BITC) and its network of business members are leading a movement to create a fair and sustainable world in which to live and work. Formed in 1982, and with His Majesty King Charles III as Royal Founding Patron, it is the largest and longest-established membership organisation dedicated to responsible business. BITC works and campaigns with more than 600 members to continually grow their responsible business practices, uniting their efforts for greater social and environmental impact in our communities.