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    Is Parental Leave the Secret to Employee Retention?

  • It's becoming more and more popular with leading restaurants.

    Josh Kulp and Christine Cikowski leverage a paid parental leave policy to build a strong culture at their Chicago fast casual, Honey Butter Fried Chicken.

    Christine Cikowski and Josh Kulp knew the day would come.

    In 2015, about two years after the pair launched Honey Butter Fried Chicken in Chicago’s Avondale neighborhood, an employee announced her pregnancy. That news sent the business partners’ minds spinning. Long interested in expanding and evolving the employee benefits package at their uber-popular fast-casual eatery, Cikowski and Kulp responded with a paid parental leave policy—a daring effort for just about any restaurant, let alone a 2-year-old quick serve with a single location.

    “We had a sincere desire to do this, so we did,” Cikowski says.

    In the four years since, nearly 10 additional Honey Butter employees, from dishwashers and kitchen managers to Kulp himself, have taken the paid time off (PTO) benefit, which provides 12 weeks of paid leave based on one’s service time with the operation. Those with at least one year at Honey Butter earn 60 percent of their pay, while those meeting three- and five-year thresholds earn 80 and 100 percent, respectively.

    “We really want people who want to stay with us long-term and see working with us as a viable professional career, but if that’s to happen, then we need to treat them like professionals,” says Cikowski, who employs more than 50 staff members at Honey Butter.

    While the federal Family and Medical Leave Act provides certain employees with up to 12 weeks of unpaid, job-protected leave per year, a growing number of U.S. employers are developing more elaborate, inclusive, and generous parental PTO programs. According to the Society for Human Resource Management’s 2018 “Employee Benefits Survey” report, the number of organizations offering at least some paid parental leave has increased from 26 percent in 2016 to 35 percent in 2018. PTO leave offerings for fathers, adoptive parents, those hosting foster children, and surrogate parents have all climbed as well.

    Though rarely considered the most employee-centric field, quick-service restaurants have recently entered the parental PTO scene in earnest.

    In 2017, Yum!, the parent of Taco Bell, Pizza Hut, and KFC, instituted a “Baby Bonding Policy” that equally benefits all birth, adoptive, and foster parents who are Restaurant Area Coaches and above with six weeks of paid time off.

    Los Angeles–based Sweetgreen, meanwhile, captured headlines in May when it announced that mothers, fathers, adoptive parents, foster parents, and others with new additions to their families would receive five months’ paid leave. In an email to QSR, a Sweetgreen spokesperson says the company’s move is “a new standard in the restaurant industry.”

    “We believe it is our responsibility to lead the way given the U.S. is one of the few countries that does not mandate any paid leave for new parents,” the spokesperson says. “We hope this creates a conversation for other companies to join.”

    At the start of 2018, Noodles & Company introduced expanded parental leave, including paternity leave, 100 percent pay for six weeks of maternity leave, adoption assistance up to $10,000, and breast milk shipments during business travel.

    “Our team members are at the core of our business, and one of the ways we attract, inspire, engage, and retain talented team members is by offering a thoughtful benefits package that shows we care about them and their families,” Noodles vice president of human resources Sue Petersen says.

    The restaurant further refined its parental leave program earlier this year by adding a maternity leave transition program that allows qualifying expecting and postpartum mothers to phase out until their leave and, later, phase in returning to work after baby. They can, for instance, work an 80 percent schedule for the four weeks before and four weeks after maternity leave while receiving 100 percent pay.

    “We hope that helping moms phase out to maternity leave and phase back into the working world will reduce the risk of work-related concerns and make the adjustment easier for our team members,” Petersen says, adding that all qualifying assistant general managers and above—more than 900 team members in all—are eligible for Noodles’ parental benefits. “It shows we care about them—which is one of our core values—and their families.”

    While parental PTO can be viewed as a noble-minded, progressive benefit, Cikowski also calls it “sound business” that drives employee retention and restaurant performance.

    “It’s about keeping our people, who are going to be more loyal when they feel taken care of and nurtured,” she says. “That greater retention minimizes the expense, both in time and money, of hiring and training new staff members and helps keep employees happy and engaged, which ultimately translates into better service for our guests and a more vibrant workplace.”

    Similarly, Petersen says Noodles’ parental benefits program, which is just one part of an expansive company benefits package called “Life@Noodles,” helps drive team member growth, engagement, and retention, which is vitally important in today’s tight labor market.

    In fact, the brand has seen a 93 percent retention rate among those who have used the maternity leave transition program. Retention rates among those who went on maternity and paternity leave, meanwhile, sit at 85 and 90 percent, respectively.

    “By making it easier for team members to balance parenthood with their working lives, we’re hoping to show them that they can grow their careers at Noodles and stay with us for a long time,” Petersen says. And like Cikowski, Petersen, too, sees parental benefits driving restaurant performance.

    “By supporting [our employees], we’re ultimately supporting their growth and happiness, and in turn driving a better restaurant experience for our guests,” she says.

    Four years after installing parental PTO at Honey Butter, Cikowski has no regrets. Though she acknowledges it’s sometimes tricky to schedule around an employee’s 12-week absence, she and Kulp review labor costs regularly and say parental PTO is simply something they’ve built into their business and now manage to work around.

    “We plan to have labor run a bit higher and then make our decisions accordingly,” Cikowski says. “We see it as the right thing to do for our business and our people. It’s true it might cost us in the short term, but we’re playing the long game here.”