What is the Business Case for Enhanced Parental Leave?

In this is article we explore these 3 key areas:

✅ Improves Employee Retention and Recruitment.

✅ Boosts Productivity and Engagement

✅ Supports Gender Equality Goals.

Why Is Enhanced Parental Leave More Important Than Ever?

In this post I’ll be examining how enhanced parental leave policies benefit UK businesses from an economic and cultural standpoint. But, before we get into the details of benefits for companies, let’s first explore what we mean by ‘Enhanced Parental Leave’ and then look at the big picture benefits for societies and families.

a) What is ‘Enhanced Parental Leave.’

The statutory requirements in the UK are very modest, amongst the worst in Europe…

Maternity Leave

“Statutory Maternity Pay (SMP) for eligible employees can be paid for up to 39 weeks, usually as follows:

• the first 6 weeks: 90% of their average weekly earnings (AWE) before tax

• the remaining 33 weeks: £184.03 or 90% of their AWE (whichever is lower)”

https://www.gov.uk/employers-maternity-pay-leave

Paternity leave

“Employees can choose to take either 1 week or 2 consecutive weeks’ leave…

Statutory Paternity Pay for eligible employees is either £184.03 a week or 90% of their average weekly earnings (whichever is lower). Tax and National Insurance need to be deducted.”

https://www.gov.uk/employers-paternity-pay-leave

Shared Parental Leave

In 2015, the UK introduced a shared parental leave policy allowing eligible parents to split up to 50 weeks of leave and up to 37 weeks of pay between them. This pay is at the statutory rates describes above.

The answer in literal terms: Enhanced Parental Leave could be anything above these Statutory levels.

1 week at 50% of pay would, for many men, be an enhancement to their current pay.

Not all enhanced leave is equal

The Inspiring Dads’ Parental Leave Database highlights organisations with:

• Equal Leave - the same leave regardless of how you become a parent.

• Equal Via SPL – where the shared parental leave pay and length of time matches maternity leave time and pay.

• 6 weeks for Dad – leave that matches an organisation’s paternity leave with the statutory maternity provision.

b) The Macro-economic benefits

A Pregnant Then Screwed and Centre for Progressive Policy report in 2023  found that countries with more than six weeks of paid paternity leave have a 4% smaller gender wage gap and 3.7% smaller labour force participation gap. Their analysis also suggested that closing gender employment gaps could increase economic output by £23 billion.

In findings of a similar vein, the World Economic Forum's Global Gender Gap Report 2022 found that 80% of the gender pay gap was driven by Maternity leave. Leave is important for the well being of mothers and babies alike, but inequalities in the length of leave can entrench societal norms, reducing choice and the fuelling the gender pay gap.

c) Societal shift

The Pregnant Then Screwed and Centre for Progressive Policy report also found that just 18% of Brits think 2 weeks paternity leave or less is enough, but one in five (22%) dads and partners that are eligible for paternity leave take no leave at all.

Why would dads not be taking leave? When, according to the research from Zurich of 1,000 new dads, three quarters said they’d like to take up to 12 weeks off work at this time?

d) Because paternity leave doesn’t pay

Crucially it’s about finances.

As Tom Cruise’s character once said – “Show me the money!”

The Fatherhood Institute asked “What price for time with dad?” and calculated that a full-time employed father in the UK, on average earnings, can lose £1,021.04 when they take two weeks of statutory paternity leave.

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The Business Case

1) Improves Employee Retention and Recruitment 

• Research by Working Families and Bright Horizons shows that 48% of UK parents who have access to enhanced parental leave report higher job satisfaction and engagement, contributing to better long-term employee performance.

• Bright Horizons found that 80% of UK employees feel more committed to their employer if they have access to flexible family-friendly policies, including enhanced parental leave.

• In this article, Flexa look at why parental leave so important, and how does it benefit both employees and businesses?

  “Enhanced parental leave policies contribute to higher employee retention rates and create loyalty among employees. When companies provide ample time off for new parents, it shows that they value their employees' well-being and support their life outside of work. This can lead to increased job satisfaction and a stronger commitment to the company”.

• Meanwhile Zurich talked to dads and discovered that:

“when looking for a new role, 43% of new dads look for paid paternity leave above bonus (42%) and salary (27%)”, which isn’t surprising when the same data showed that “of those that take no time at all, seven out of 10 can’t afford to”, while “a third of new dads were forced to take holiday while 12% resorted to unpaid leave in order to spend time with their new babies.”

2) Boosts Productivity and Engagement

Lisa S. Kaplowitz and Kate Mangino

• The CIPD found that companies offering enhanced parental leave see improved mental health and well-being among returning employees, leading to higher productivity and lower absenteeism.

• Further nuggets from the Pregnant Then Screwed and Centre for Progressive Policy report:

  “We find that a woman’s partner taking parental leave is associated with a 34% increase in the likelihood of a woman being physically able to return to work”

• Lisa S. Kaplowitz and Kate Mangino, researching at Rutgers University identified a wide range of workplace skills that are developed through the process of care giving. Find out more in the HBR article “Caregiver Employees Bring Unique Value to Companies”

3) Supports Gender Equality Goals

• The Fawcett Society, the UK’s leading membership charity campaign for gender equality and women’s rights at work, at home and in public life is seeking government to introduce a dedicated period of leave for fathers “paid closer to replacement earnings rate. Current shared parental leave legislation is welcome, but too few fathers will be able to take it.”

• PWC’s Women in Work 2023 Report highlighted that:

  “In 2021, the OECD found the motherhood penalty accounted for 60% of the gender pay gap across 25 European countries, with factors… In Northern and Western European countries, the motherhood penalty accounted for 75% of the gender pay gap.”

• Research by McKinsey (2020) showed that companies with a strong focus on diversity and inclusion, including robust parental leave policies, are 25% more likely to have above-average profitability, driven by diverse leadership teams that enhance innovation and decision-making.

Bonus reason - Reputational Kudos.

Man on LinkedIn posts sleep deprived picture with his baby. He thanks his employer for the opportunity to take 3 months leave. The comments blow up, the organic reach is astronomical. I notice and the employer makes it into the database

In Conclusion

Creating opportunities for your new parents to access well paid extended parental leave, regardless of how they become parents is being increasingly seen as a core part of the employee benefit offer.

As at 1st August 2025, The Inspiring Dads’ Parental Leave Database captures over 385 UK organisations.

👏 139 Equal Parental Leave offers,

👏 65 of which are at least 26 weeks full pay (see graphic)

👏 A further 87 organisations equalising Shared Parental Leave offer with Maternity leave.

👏 203 organisations in the UK who offer 6 weeks full pay for dads (ringfenced, not hidden within Shared Parental Leave)

The reason those numbers are rising every month is laid out in the evidence above - enhanced and equal parental leave positively impact employee retention, productivity, diversity, and long-term business growth in the UK. Crucially a fairer, better society has to include equality at choice around caring responsibilities. It’s the route to gender equality.  

Campaign to Make Things Better:

PS If you think that Men don’t Want to Take Leave?

Stats around the low update of shared parental leave paint a picture that could easily be misinterpreted but when organisations get the culture and pay ‘right’ and remove the issue of transferring leave men will take the leave they are entitled to.

• Two thirds of new dads at Zurich UK took their full 80 days paternity leave in 2023.

• 80% of men Aviva have taken at least five months out of work when a new child arrives, and 79% of men have taken over five months for subsequent births

Extra Resources

If you are considering introducing an Equal Parental Leave policy, here is a brilliant guide from Business In The Community which explores costs, benefits and tips for successful implementation. Plus see measurement tips and tricks from Careers After Babies.

Photo Credit Vitolda Klein @little_klein via Unsplash

More Parental Leave posts

new Dads are new parents too

New dads are new parents too

Nicki Seignot, Author of 'Mentoring New Parents at Work' and founder of The Parent Mentor talks to James and Ian in episode 36 of Lockdown Dads.

We discuss why supporting new dads matters, the role single dad Phil played to broadening Nicki’s horizons, beyond just supporting the maternity journey and what the post pandemic work landscape could look like.

Plus the usual podcast musings about schools going back, sunshine (!) and looking forward to better future.

Contents

00:50 The power of daylight in the mornings

02:15 Schools going back

02:45 Competitive world book day

04:00 Ian is looking forward to not apologising…

05:30 Christmas presents (!) and Covid

07:10 Nicki’s path-

• Taking maternity leave in the late 1990s.

• Hard choices and work just not working for mums

• Mum2Mum mentoring programme at Asda

• The important role of single dad, Phil

• That 2011 program became The Parent Mentor business

• Her book - Mentoring New Parents at Work and a realisation that dads weren’t part of the conversation.

“I mean, it sounds obvious talking to you too now, but you know, it was quite revelation at the time.”

13:45 A pivotal moment using a mountain top image as part of icebreaker cards

“He held the card up and he says this was me. And I used to go mountain climbing, cycling, you know, the world was my oyster and I don't know where he is anymore.”

And he literally broke down in the session, and I said to my client afterwards, I said, if you are in any doubt about the power of what you're doing, it's in the room right now. We have to talk to dads too.

14:30 The danger of grouping parents as a single homogeneous group

15:30 The Dad Connect programme

16:15 Mentoring v Coaching

18:50 We talk about reverse mentoring

21:45 “Good enough is good enough”

23:30 Work Life Balance

“It took me to have children to respect my work-life balance and to want work flexibly. Why do we give away all that discretionary time? And why does that have to be a parenting thing to want to work flexibly?

So I think in a way the pandemic has given everyone the gift of being able to say, I have a right to a life away from work”

24:00 Hybrid working and the role of line managers

25:50 Incoming culture clash - “working from home is an aberration” ?

26:30 Will there be a generational split about office working?

28:30 The mechanics of hybrid working models

Tips

James’ choose to challenge on parenting norms

Nicki talks about checking in on a new dad back from paternity leave

Ian has been reading Why we sleep? by Matthew Walker

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Connect with Nicki

www.theparentmentor.co.uk

https://www.linkedin.com/in/nicki-seignot-647b981/

Photo Credit @kellysikkema via Unsplash