Volvo Cars is opting in its 40,000+ employees around the globe, in all plants and offices, into a new all-gender, paid parental leave policy as of April 1, 2021.
The 'Family Bond' policy will give all employees with at least one year's service a total of 24 weeks of leave at 80 per cent of their base pay by default. The policy applies to either parent and the leave can be taken anytime within the three first years of parenthood.
"We want to create a culture that supports equal parenting for all genders," said Håkan Samuelsson, chief executive. "When parents are supported to balance the demands of work and family, it helps to close the gender gap and allows everyone to excel in their careers. We have always been a family-oriented and human-centric company. Through the Family Bond programme, we are demonstrating and living our values, which in turn will strengthen our brand."
The global policy is more inclusive and supportive than many existing policies around the world, and includes all legally registered parents, including adoptive, foster care and surrogate parents, as well as non-birth parents in same-sex couples. Some countries do not offer any paid leave to new parents, or exclude certain groups of parents – the latter is particularly true for fathers.
Volvo Cars' global policy is inspired by national legislation in its home market of Sweden, famous around the globe for its generous parental leave arrangements, which have delivered tangible benefits for parents and children alike in recent decades. It follows a parental leave pilot scheme launched in the EMEA region in 2019, in which 46 per cent of all applicants were fathers.
"This is more than a new parental leave policy for our employees – it is the embodiment of our company culture and values," said Hanna Fager, head of corporate functions. "We want to lead change in this industry and set a new global people standard. By opting all our employees into paid parental leave we narrow the gender gap and get a more diverse workforce, boosting performance and strengthening our business."
When studying the outcome of its parental leave pilot, the company found that employees appreciated the policy for being gender neutral, inclusive and adaptable to personal needs. The studies also resulted in important insights on how to encourage even more employees to take parental leave and make parental leave for both parents the new 'norm'.
Some of the obstacles that limit the uptake of parental leave include parents' concerns around the potential impact it might have on their team, fear around long-term career opportunities, and a cultural mindset about of what is expected of fathers in the workplace and at home.
To encourage uptake, Volvo Cars has focused on communicating about its parental leave policy more effectively. By presenting the 24 weeks parental leave as a pre-selected option, the company aims to create a 'default effect' – essentially, people are highly likely to stick with pre-selected options. Ambiguous language, such as 'up to 24 weeks', is avoided as we tend to predict negative outcomes when there is uncertainty.
By using tactics like these, Volvo Cars aim to remove confusion and cultural barriers, and provide parents with certainty.
To further show its commitment to reducing the gender gap, Volvo Cars will share its participation results over time so that other companies can learn from its progress.