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Aug 12, 2015

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SMITH BRAIN TRUST -- Software firm Adobe announced this week it will expand its family paid-leave benefits -- including up to six months for birth mothers. This follows Netflix announcing up to 12 months of leave for employees who are new parents. That move, inclusive for fathers and adoptions, is unprecedented for large U.S. firms. Even Facebook, more generous than many companies, caps its parental leave at four months. The trend has emerged despite the lack of mandatory parental leave laws in the United States. (Only Swaziland, Papua New Guinea and Lesotho allow similar market freedoms, according to 2013 data.)

Economist Peter Morici, professor at the University of Maryland’s Robert H. Smith School of Business, likes the hands-off approach. He says the marketplace –- not government -– should determine leave policies. Unlike Netflix, he says, many small businesses and other types of companies can’t afford to provide lengthy time off.

Morici recently joined tech industry expert Tom Jelneck on CCTV America to discuss the trending of both parental leave and the "unlimited vacation" concept varyingly adopted by the likes of Netflix and Virgin –- under the work-life balance umbrella.

They concur that the U.S. government, which also doesn’t guarantee paid vacations (European workers by law get at least 20 days), should stay out of employee-leave policymaking. They say technology firms, especially, will act on their own to adopt savvy policies that maximize worker creativity and minimize burnout.  

But can unlimited time off be too much? “It depends on the industry,” Morici says. “In the tech sector where you have a cadre of capable and innovative people committed to teamwork, there’s going to be social pressure not to take too much and to take some, at least, so you don’t become a bore at work by not recharging your batteries. In that type of environment it works.”

But it’s different in manufacturing at places such as Ford Motor Company, where the work is regimented, Morici adds. Nonetheless, he says, the U.S. tech industry's flexible-leave trend will extend to other creative industries like advertising and perhaps on Wall Street. “(Wall Street) is a very high pressure environment where people aren’t stealing, but doing very creative work,” he says. “And law firms are requiring young people to take time off (instead of accumulating vacation hours). You don’t provide vacation time for employees to cash it out at the end.” Watch the full video (10:10)...

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About the University of Maryland's Robert H. Smith School of Business

The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and part-time MBA, executive MBA, online MBA, specialty master's, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.

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