Goldman Sachs now offers the most generous parental-leave policy on Wall Street. But the data says men won't take it unless a 'daddy quota' becomes mandatory.
- Goldman Sachs now offers 20 weeks of paid leave to all new parents.
- It's the most generous policy on Wall Street.
- But there's a stigma around men who take time off from work, so it's unclear whether Goldman employees will actually take time off.
- Select companies and governments have found success with getting men to actually take paternity leave by mandating it in some way.
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Goldman Sachs now offers the most generous parental-leave policy on Wall Street.
All new parents, regardless of their gender or whether they're the primary caregiver, are entitled to 20 weeks of paid leave.
It's progressive, and not just for the finance industry. Facebook has only a 16-week leave policy.
What remains to be seen is whether Goldman employees - specifically men - will take the parental leave that's available. There's a stigma around paternity leave among finance professionals: New dads who take it are often seen as less committed to their careers. It's the male reciprocal of the motherhood penalty, where women see their careers set back for taking time off have a child, or even the potential that they might.
Perhaps that's why, in the US, women take eleven times the parental leave that men do.
Goldman's extended parental leave is part of a broader effort led by executives to support staff at home as well at the office, and to rebrand itself as a family-friendly organization. As it stands, most working American professionals don't use all their parental leave, and female employees are much more likely to do so than male employees are. Recrafting the US cultural narrative around what it means to be a working parent may be harder than it seems.
So it may make sense to look to Finland and Norway.
Goldman extended its parental leave based on employee feedback
Every year, about 4% of Goldman's global employee population takes parental leave.
In an interview with Business Insider, Goldman's global head of wellness, Laura Young, said it's up to individual employees whether they take the parental leave they're offered.
It certainly seems like something employees want. The decision to extend parental leave was based largely on feedback that Goldman received in company-wide surveys. Specifically, many employees said being able to take care of their families was important to them.
Goldman CEO David Solomon also sent an email to all managers earlier this year emphasizing the importance of supporting employees when they take the parental leave that's offered.
"We really don't want to force people into a certain decision" about whether to take parental leave and how much to use, Young said. "We think that encouraging them and continuing to leave that choice up to them is important."
Solomon told Yahoo! Finance that he expects a lot of employees to take advantage of the benefits and thinks they should, even though they're not obligated to. "The top leadership of this firm is encouraging people to take advantage of the support that we're offering around the life event of having a child," Solomon said. "I think we do have that kind of culture."
In February, Goldman rolled out a training program in which managers learn to encourage their employees to take all the leave time available to them. Goldman has also brought on a family-resource coordinator who helps employees figure out their plans for taking parental leave and then transitioning back to work.
Along with extended parental leave, Goldman announced increased stipends for adoption and surrogacy and new stipends for egg retrieval and egg donation. 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.
Part of the shift toward family-friendliness is simply minimizing the squeamishness managers may feel talking to new parents on their team.
Young said bosses should be having an "open dialogue" with employees about their needs and concerns around taking parental leave. Every time an employee announces that they're going on leave, that person's manager receives an email from Goldman HR prompting them to congratulate the employee and reminding them about inappropriate questions.
Men in the finance industry are often judged negatively when they take paternity leave
Often the problem with parental leave in finance is less about the official rules and more about the stigma toward men who use it.
As Roy Cohen, a career coach and the author of "The Wall Street Professional's Survival Guide," told Beecher Tuttle at eFinancialCareers, it's still 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."
Yet in spite of the eyebrow-raising that happens when men take paternity leave, fathers tend to be more professionally successful than mothers. It's a phenomenon that's sometimes referred to as the "fatherhood bonus" or the "motherhood penalty."
As Business Insider's Rachel Gillett has reported, mothers generally earn less than childless women, while fathers tend to earn more than childless men. A 2007 Cornell University study found that male job candidates whose resumes listed their involvement in a parent-teacher association were invited for interviews more often than men whose resumes didn't. Women who mentioned the PTA, however, were half as likely to receive an interview as women who didn't.
But that study's design was to have undergraduates rate the hireability of fictitious job applicants. That is quite the different context than the notoriously hard charging, high prestige investment bank where the people who make partner attain a $950,000 base salary.
Some companies and countries have instituted mandatory paternity leave to level the playing field between men and women
In light of some men's reluctance to take time off from work, certain companies - and countries - have experimented with mandating paternity leave.
People analytics firm Humanyze, for example, gives men and women an equal amount of paid parental leave and requires that men use it. CEO Ben Waber wrote in Quartz wrote that he was inspired to make that decision years ago, when two of his seven employees went on parental leave at the same time.
"It required a lot of support from our coworkers and a huge amount of flexibility to make it work," Waber wrote. "But the company thrived, the world didn't collapse, and we were able to spend time with our new children. It was an easy call to make that leave should be mandatory for the rest of the company."
The idea behind mandatory paternity leave is to level (or at least try to level) the playing field between men and women at work, since new mothers typically take longer leave than new fathers. And in hyper-competitive environments, the risk is that that time off would be seen as falling behind.
This can best be scene in national policy. In Finland, fathers are not allowed to work during mandatory paternity leave. In Norway, men are required to take a certain amount of time off after having a child. If they don't, their family is no longer eligible for the total leave time available. While the research is still early, the data suggests such a "father's quota" is effective - Denmark has generous parental leave like its Nordic peers, but without a "daddy quota," many fewer Danish men actually take leave. A more direct comparison to the US might be Quebec - the Canadian province has also created for a use-it-or-lose-it quota, with a subsquent spike in men taking leave.
According to a report from the Society of Human Resources Management, just 36% of male employees in the US used all their paternity leave, compared to 66% of female employees. And a 2017 Pew Research Center survey found that the median paternity leave in the US was one week, compared to 11 weeks for median maternity leave.
One potentially complicating factor in encouraging men to take paternity leave is that men today seem less supportive of gender equality than previous generations were. In a 2017 paper for the Council on Contemporary Families, men ages 18 to 25 were more likely than their older counterparts to agree with the idea that it's better for women to be homemakers and men to be achievers in the outside world.
In The New York Times, economics reporter Claire Cain Miller explained that millennial men do have more egalitarian attitudes about family, gender roles, and careers than previous generations did. But partly because companies don't tend to offer family-friendly policies, many men have a hard time translating those attitudes into action. "They struggle to achieve their goals once they start families," Miller wrote. If someone in a mixed-gender couple has to stay home and take care of the family, it's likely going to be the woman.
But these are national-level trends. Goldman is a Wall Street powerhouse.
Young, the wellness head, made a business case for parental leave when speaking with Business Insider. She said that the company feels that when employees are supported in what they're doing personally, that contributes to their professional success. As for a more Nordic model of mandatory paternity leave? "We want to give our working parents the flexibility to take the leave time that works best for their needs," she said.