Paid parental leave isn’t just for tech giants or Fortune 500 companies—it’s an offering that employees want, regardless of company size or industry. Employees have consistently named new parental leave as a desired benefit. But for many small businesses, the thought of offering paid parental leave is daunting. Small business owners and leaders often worry about the challenges of managing extended absences, potential operational disruptions and the costs of offering a paid leave program.

However, not offering paid parental leave could be just as costly. With 72% of employees planning on looking for a new job this year, and a fourth of employees leaving for better policies, offering paid leave can help business owners prevent the turnover tide.

Luckily, offering paid parental leave doesn’t have to be challenging. Plus, it’s a savvy investment in an organization’s people, company culture and bottom line. Here are five things your small business can do right now to make paid leave a reality:

Understand the Difference Between Leave Laws and Paid Leave

Many small business owners assume they’re not responsible when it comes to parental leave because federal laws like the Family and Medical Leave Act (FMLA) aren’t applicable.

But here’s the key distinction:

• Leave laws like FMLA or the California Family Rights Act (CFRA) may provide job protection but don’t require paid leave.
• Paid leave is a benefit employers can choose to offer or access through state programs or disability programs (only if you’re giving birth). However, only 27% of employees currently have access to paid leave, which leaves employers responsible for funding paid parental leave in the majority of cases.

Even if your business isn’t required to provide leave, your employees may still be eligible for state Paid Family Leave (PFL). Better offerings and benefits are synonymous with employee retention; when small businesses neglect to offer paid parental leave, they face a higher risk of losing employees to larger organizations that do.

Start Small, Then Scale

While employees are looking to add or expand paid parental leave, small businesses don’t need to start by offering 24 weeks at 100% pay to support working parents. Start with a modest, gender-neutral policy, like six to eight weeks of partially paid leave that matches a state PFL program and scale as your company grows.

To figure out what works best:

• Survey your team to understand what benefits and programs matter the most.
• Audit your current perks and potentially cut low-use programs and reallocate funds.
• Run a cost-benefit analysis to weigh turnover costs compared to offering leave.

Even small changes can go a long way to improve employee retention, loyalty and your reputation as a supportive family-forward workplace.

Leverage State Programs and Insurance

If your business operates in one of the handful of states with PFL programs, you can reduce your cost burden by “topping off” employee wages. This can bring employees up to 80% or 100% pay, so you only fund the remainder that states do not.

If you're not in a PFL state or want to provide a uniform benefit across multiple states, paid parental leave insurance offers an affordable alternative. Paid parental leave insurance is a completely employer-paid, customizable and tax-deductible policy. Best of all? It allows small businesses to reduce financial risk and offer competitive benefits without the upfront cost of self-funding.

Plan Ahead to Minimize Operational Disruption

Many business owners wonder—if we offer paid parental leave, how will our business keep day-to-day operations running smoothly? With the right planning, even small and lean teams can manage temporary absences effectively.

Here’s how:

• Use contractors or freelancers to fill temporary gaps
• Allow intermittent or staggered leave to spread out time away
• Give employees flexibility with a phased return-to-work schedule
• Document roles and responsibilities in advance of leave
• Loop in clients and coworkers early to maintain continuity

Small businesses shouldn’t just strive to survive parental leave—it’s an opportunity to build trust and collaboration across your team.

Make Paid Leave Part of a Supportive Culture

Paid parental leave is more than a policy. When employees feel supported through major life events like welcoming a child, they’re more likely to stay, grow and contribute meaningfully to their organization.

Here are a few ways to reinforce your paid parental leave program in your culture:

• Offer return-to-work coaching and planning
• Include partner or non-birthing parent leave
• Communicate openly and consistently
• Train managers to support leave without bias

How a business implements leave matters just as much as what’s written in the employee handbook. Today’s talent expects family-friendly policies, and small businesses are stepping up in creative, affordable and scalable ways.

Offering paid parental leave doesn’t have to be complicated or costly. With the right strategy, planning and partners, any business can design a scalable program that supports employees and protects operations.

Thinking of adding paid parental leave as a benefit for your small business? Get in touch with Parento, an isolved Marketplace Partner.

 

Print