- Goldman Sachs will now offer 20 weeks of paid leave to all new parents.
- That's more than any other Wall Street bank allows.
- The policy change suggests that the bank is trying to maintain its edge in the war for tech talent, since tech companies tend to have more flexible leave policies.
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Goldman Sachs announced Monday that all new parents at the bank will receive 20 weeks of paid parental leave.
That's an increase from 16 weeks for primary caregivers, and it's more time off than any other Wall Street bank offers.
It could be a sign that Goldman - widely considered the most powerful and prestigious investment bank - is now rethinking its strategy for staying competitive, especially when it comes to tech talent. By positioning itself as a more progressive employer, the bank may be better able to lure talented professionals who would otherwise find themselves at the likes of Amazon or Google.
Goldman's new parents receive the same parental, regardless of their gender or caregiver status
According to the announcement, all new parents at Goldman - regardless of their gender or whether they're the primary caregiver - will receive 20 weeks of paid leave. (In certain parts of the world, employees may receive more.) That applies to employees who became parents through birth, surrogacy, or adoption.
The increase in paid parental leave time is accompanied by other changes, including the "Pathways to Parenthood" program, which will increase current stipends for adoption and surrogacy and add stipends for egg retrieval and egg donation. And all Goldman employees will get four weeks of paid family care leave so they can care for family members in the case of illness, military deployment, or foster placement.
These changes are a response to feedback Goldman received recently in an employee survey and another survey on company benefits.
Extended parental leave is a way for Goldman to stay competitive in the war for talent
In an interview with Yahoo! Finance's Julia La Roche, Goldman CEO David Solomon said the policy change is a way to help the bank attract and retain top talent.
"The world is a very competitive place, and if you want great people in your organization, you have to take care of them, you have to have a culture that is open, and inclusive, and inviting and supportive," Solomon said.
The extended parental leave may also help Goldman shed its stodgy persona and compete with top tech companies, who typically have more flexible policies. (Goldman has recently been making a push to hire more technologists.) At Netflix, new parents can customize their "unlimited" leave year; Facebook gives new parents 16 weeks of paid leave and 10 weeks unpaid, and offers reimbursement for the cost of baby supplies and daycare.
In an interview with Business Insider, before Goldman announced the change to its parental-leave policy, HR chief Dane Holmes said he's always concerned about attracting and retaining tech talent.
"There's a tremendous battle for that [tech] talent," Holmes said. "And any organization that tells you they're satisfied with their ability to get their engineering talent is probably on their way to not being satisfied." Holmes is leaving Goldman at the end of this year to join the HR tech startup Eskalera.
Wall Street banks are starting to realize the benefits of increased parental leave
In the last few years, a number of Wall Street banks have extended their parental leave policies.
In 2016, Bank of America increased paid maternity, paternity, and adoption leave in the US from 12 weeks to 16 weeks. The same year, Citi extended paid maternity leave from 13 weeks to 16, and second parent leave from two weeks to eight. At both companies, employees can also take an additional 10 weeks off, unpaid.
Meanwhile, in June 2019, JPMorgan agreed to pay $5 million to male employees who claimed that the company did not allow them to take the same amount of paid parental leave as mothers.
Often the problem with parental leave in finance is less about the official rules and more about the stigma toward men who use it. According to a report from the Society for Human Resources Management, just 36% of male employees used all their paternity leave in 2016 (that's compared to 66% of female employees).
As Roy Cohen, a career coach and the author of "The Wall Street Professional's Survival Guide," told Beecher Tuttle at eFinancialCareers, it's seen as the "kiss of death" when Wall Street bankers take the paternity leave they're offered. "People are paid a premium to work hard and make personal sacrifices," Cohen said. "You won't be perceived as disloyal, but others may begin to question your commitment."
Paid parental leave can benefit businesses and their employees
The US is the only developed country that doesn't guarantee some form of paid parental leave, Business Insider's Allana Akhtar reported. The federal Family and Medical Leave Act (FMLA) gives American parents 12 weeks of family leave to care for a new child - but companies aren't legally required to pay for that time off.
Yet a growing body of research suggests that paid parental leave can benefit both businesses and their employees.
A 2012 study from the Center for Women and Work at Rutgers University found that women who took advantage of New Jersey's paid-family-leave policy were far more likely to be working nine to 12 months after the birth of their child. And a study by Columbia University Social Work professors found that fathers who take two or more weeks off after their child is born are more involved in their child's care nine months later.
As Holmes put it, investing in your employees is crucial, regardless of your specific company or industry. "If you're thoughtful at all, you know that you're only as good as the team that you have," he said. "To me, if you get up out of bed and you're not worried about the state of your team, you're basically not being a good manager."
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