Taking Parental Leave Without Falling Behind

[00:00:00] Allison Whalen You know, there's never a good time to be pregnant or expecting a child. And actually, I'm stealing this. This is from the CHRO of L'Oréal. She said, "But the good news is because there's never a good time, there's also never a bad time."

[00:00:16] Jennifer Borget Planning for a baby is an exciting time. There's probably a lot on your pre-baby to-do list, from bonding with your baby to keeping your career on track after some time away. But to check all these items off, you need a plan. So, understanding your company's offerings, knowing how you'll bridge any income gaps, and setting yourself up for a strong return are important things you'll want to be ready for. That's why I'm so excited to be joined today by Allison Whalen. She's the founder of Parentaly, an organization that helps employers and employees create smarter, more supportive leave plans. We'll talk about the common misconceptions around paid leave, how to budget for your time off, and how to navigate it all while still feeling confident in your career. We'll also hear from Northwestern Mutual about how to financially prepare for time away. Because just like with parenting, planning ahead makes all the difference. When you're ready, head to Northwesternmutual.com/podcast and download your parental leave checklist along with links to our other episodes on making your money work harder for you. And if you've enjoyed this season so far, please leave us a rating and a review.

All right, let's dig in. Awesome, so excited to chat with you, Allison. Just to start it off, tell me a little bit about you, how you got the idea to start Parentaly. Was this a personal experience you were going through that made you start this?

[00:01:43] Allison Whalen Yeah, I had my first child in 2017, and at the time, I was so excited to become a mom. I'd wanted to be a mom my entire life, had experienced some infertility, and that excitement very quickly turned to fear as the implications set in: "Wait a minute, I have to now step away from work for three months? How am I going to do that? How am going to make sure that this doesn't completely derail all my projects and my work?" And fast-forward, I had a great three-month paid leave. I returned to work, and my piece of the business was in disarray. And what I realized in that experience was that it's really important to take paid parental leave. I hope that someday we have a national mandate, government supported. I think everybody should be taking paid parental leave, but it's also really important to think about how do I set myself up for ongoing success in my career to make sure that my time away doesn't completely backfire and end up slowing me down? And so I started Parentaly back in—we officially launched in 2019 with this idea of how we support the business, the teammates who are asked to cover for somebody when they go on leave and the actual person going on leave, all from this perspective of work and career continuity.

[00:03:01] Jennifer Borget Is that something that you hear a lot of people worried about, like their work? I think of people stressing—I know for me, oh, are they going to try to replace me when I'm gone, although legally they're not supposed to? What kinds of things do you hear from people who are worried about taking time off?

[00:03:17] Allison Whalen You raise a really good point, which is, it really depends on your role. If you work as, for example, an hourly employee at a store, or if you are a reporter, like the example you gave, in those cases, typically you will be backfilled. There will be someone that will slot in. And so for those individuals, they tend to worry about different things: Will I be replaced? They're worried about childcare. They're worried about a lot of the financial considerations. But for the individuals that don't have a full human coming in to take over their work, which is really the overwhelming majority of people who are in sort of salaried positions, whether it's marketing or sales, they have to figure out what happens to their work. And actually we did this huge survey last summer. The number one concern that folks had, ever so slightly more than How much paid leave can I take? was career progression. There's a fear around perception. There's fear of what will happen to my client relationships or my vendor relationships? What will happen in my projects? Will I miss out on new exciting projects or opportunities that sort of occur and I can't foresee them, but they're going to pop out when I'm out on leave?

[00:04:32] Jennifer Borget That's a big deal for a lot of people. So, what are the options that might be available for people who are wanting to take a leave? What should they look for maybe in their HR handbook, or how can they learn to navigate this?

[00:04:49] Allison Whalen I think the first thing is to understand deeply the policy, and it's really important to focus on the fine print because there are a lot of things that we see within this space. Number one, a lot of companies have a tenure requirement, which means that they may have a paid leave policy of 12 or 16 weeks, but you only receive it if you have been employed at the company for, let's say, 12 months or more, at the point in time that the baby is born or that the child is placed with you if you're adopting. ... All of the policies that I have seen have said that even if you don't plan on starting your leave when the baby is born, that is the date or the moment in time that we calculate as an organization whether or not you have earned the right to have that paid leave.

There's a big push for companies to roll back those tenure requirements. We actually have a tenure requirement database on our website that we crowdsourced. I think we have almost 200 companies in there where people reported the tenure requirements, and I was surprised to see how many companies have reduced it to six months, three months, or zero. Previously, almost every company said you have to have worked here for 12 months or you get no paid leave.

So, you really need to understand what the policy is: How much is the paid leave? Keep in mind that a lot of companies structure their policy as a short-term disability portion that is only for birth parents. That is a medical leave that you take right when the baby is born, and it lasts a certain amount of time. It could be anywhere from six to 12 weeks, depending on the nature of your insurance and doctors and what they say that period is. And then there's bonding period. A lot of companies will structure their paid parental leave policy to say that there's a medical portion and then there's bonding; if you give birth, you get to add those together. And a lot of people are confused about that, where they'll see bonding leave of eight weeks, and they'll think, okay, so I give birth and I get eight weeks. Well, no, you actually get eight plus eight if you had a C-section, for example. And fathers, who aren't giving birth, they would have access to that eight.

A few other things to look into, and I would look into this pretty early because you want to know what you have available to you: Are you able to split your leave? A lot of non-birth parents like to split their leave. Oftentimes, it allows them to better structure to support their family, their home life; or sometimes they do it because they have certain projects or certain things at work that they don't want to miss out on. Another thing to look into is how your variable pay will be impacted by your parental leave. A lot of companies do not have this in their company handbook. You may actually need to dig a little bit more, whether it is asking around to see the sales comp plan for parental leave, or asking, Well, what happens to my variable, my annual bonus? I see a lot of companies do everything under the sun. Some will say that if you're out for a period for any reason, you are taking a leave of absence; we will prorate down your bonus by that amount. Other companies will say that the whole point of paid leave—in whatever format, whether it's medical or caregiving or whatnot—the whole point of that is that we act as though you are still here, right? And so we will not prorate down your bonus.

So, there are a lot of things that I think people should look at. There are a lot different things that can actually dramatically reduce or increase your earnings as a result of your company's policy.

[00:08:26] Jennifer Borget It's especially interesting to hear that career progression is the top concern for people taking parental leave. The fear of missing out on a promotion, losing traction with a manager, or even being quietly replaced while you're gone, it's real. Next, Allison will dig into some of the most common myths about paid leave in the U.S. and what people tend to get wrong about their coverage. Trust me, you don't want to miss it. But first, here's some advice from Northwestern Mutual on how to financially prepare for your leave.

[00:08:57] Speaker Choosing to take time off from work and spend it with your new baby is one of the most rewarding decisions you can make. And a little planning can make it even more rewarding. Here are two tips to help you do just that. First, think of your parental leave as making a large purchase. The key is determining how much it costs and how you'll pay for it. Start by making yourself a parental leave budget. It should include any out-of-pocket health care expenses and account for living costs during your time away from work. If your employer's benefit package doesn't cover all your costs, there are options to fill in the gaps, like short-term disability or savings.

Second, it's also important to look ahead. After all, having a baby is a major life event, so now's a great time to revisit your financial plan or get one in place if you don't have one yet. A good plan goes well beyond budgeting for childcare and other baby-related expenses. It includes taking steps toward financial security for your family, like building an emergency fund and ensuring you have enough life insurance and income protection should something unexpected happen. It also means taking steps to grow your wealth over time so you can buy that bigger home, pay for your kid's college, and even retire one day. Whether you're thinking about starting a family or your baby is already on the way, it's never too early or too late to start preparing. Together with your advisor, you can build a clear financial plan that empowers you to achieve your life goals. It all starts with a conversation. Visit NorthwesternMutual.com/podcast to download our Parental Leave Checklist and connect with your advisor to get started.

[00:10:31] Jennifer Borget What does it mean to build a leave plan? I know this is something you've talked about. What does that encompass?

[00:10:38] Allison Whalen When we talk about a leave plan, we're primarily talking about the transition plan for what will happen to your work. How do you identify who should do your work? The vast majority of people have multiple co-workers take over different pieces of their job, and then they pause a part of their jobs. And so that whole process around who's going to do what: What training do I need to put them through? What background material do I need to pull together and hand over to them?

There's also an aspect to leave planning of thinking through the filing and the financial aspect of leave. What does that mean? Well, if you live in a state where you're getting government pay, you may or may not be responsible for actually submitting forms to the government entity to receive that state pay. In some states, they will allow other third-party organizations to do that. In other states, they say no, the employee has to do that themselves.

Also an important aspect of preparing for leave is thinking about your childcare plan. What is your backup childcare plan?

How will you file to get paid for leave? There are usually some doctor's forms required even with your employer, so figure out what you need to get that in and who do you need send it to.

There's a lot that goes into planning for leave across both home life as well as work life. The other thing that we see a lot is people—this sounds so silly, but they don't draft an out –of-office message. And that creates a lot of issues if you go on leave, and you haven't put an out-of-office message out, and now all these people are emailing, and now you're stressed, and you're in the hospital. Document your communication preferences when you go on parental leave. Are there certain things that you do want your manager to reach out to you about no matter what stage you're in? Things like the company announces a new 401k plan and provider—you may want to know that. And if you don't tell your manager, Hey, if there's any new benefit or policy or a new role that you think I could be interested in, or you're not going to be my manager anymore ... you should tell your manager how to reach out to you, and say, "Don't expect a response. I may be totally busy, and I may not respond but at least want the opportunity to respond.”

This is not I want to do work while I'm on leave, but you're not protected under FMLA. You could be asked to work, and that's legal. My research into this is that the language around FMLA is a little bit vague in terms of, like, there is a limit. So, if it's 12 weeks, and if a company gives you 24 weeks of leave, then you're not protected by FMLA after that first 12 weeks. It's a little bit hazy, but I would say in general most companies do not want you to be doing work while you're on leave. And in order to avoid their employees inadvertently or intentionally breaking that, they will oftentimes say, “Just don't contact this person on leave,” which makes sense, right? I want to protect my company; I don't want my managers to be reaching out to people, so they just make that easy blanket rule. But the problem is there are certain things that people want to hear about. It's hard, because you have to go back to basics of how to approach this from an empathetic perspective. If this person said they want to be notified, if any of these things come up, what is the best way to notify them of this? But also let them know, "Hey, there's no pressure to respond. And I'm confident that I can keep this idea alive and you'll have an opportunity when you return.” It can be actually hard in practice to figure out the right thing to do.

[00:14:36] Jennifer Borget So, what are some employers getting right in these situations? With supporting these parents during their leave, have you seen a company that's doing a really good job of this?

[00:14:46] Allison Whalen I think that there are a few things. At companies where men actually take their full leaves, it is such an indication of a broader leadership support, a strong culture. And these are companies that are very ambitious and hardworking, but they do have that understanding that we're all caregivers. It's not defined by whether you're a birth parent or not. I think that that just changes so much about this experience. It changes the perception factor if I'm going to go and disclose as a woman that I'm pregnant versus my co-worker who's a dad who discloses that he's expecting—well, we're both going to be out for an extended period of time when we have our children. And so I don't experience as much bias because there's another human who's also doing that. And it sort of equalizes the playing field a little bit.

I also think a lot of companies have been very smart about performance reviews and career pathing because it can be very easy to avoid having conversations about ongoing career pathing, promotions, missed performance reviews and say, Oh, we'll just figure it out when you get back. But if you're really investing in the ongoing success of your employees, this is a brief moment in time. They're going to go on leave, and if you treat this well and in an effective and supportive way, they can come back and be better and more productive and more loyal. And I think when the companies get that, they really invest in making people feel like this is a really great opportunity, and this is going to allow us to stop doing wasteful things and to rethink how we handle different aspects of your job—and by the way, you want to come back and make more money and get promoted? Let's talk about how we get you there.

This can be a forcing function to have those conversations as opposed to if you weren't going out on parental leave. And so I think the companies that are doing a really good job are very focused on the long-term, broader picture of how we support people to find that experience, to have a family, whatever that family may look like, and to be able to continue to allow them to show up and find meaning in their work.

I do think that there is an aspect of the financial piece, too, that you can be thinking about. I would say with your second, I hear people are much more shocked at the financial implications of their second child than their first. It's not fun to pay for daycare for one kid, but it's just one. Now you've got two. And a big reason why people feel like they need to either go make more money or drop out of the workforce is that second child. And I think that kind of surprises people because when you're having your second child, you're like, oh, I know what this is going to be like, but the financial implications of that are so significant. And if you have to go through IVF or fertility treatments, that's another piece to be thinking about. I know I have friends who choose companies based on that company's ability to pay or supplement these fertility costs. There are actually people that, when they realize that they're going to struggle to expand their families, they start to plan and think, Okay, well, we want this to happen in the next few years; should I be looking for an employer that will support that journey financially for me? That never happened a generation ago. This is a very new thing.

[00:18:30] Jennifer Borget A huge thank you to Allison for joining us today. I learned so much from this conversation, and if there's one thing I'll take away, it's that you don't need to have every answer figured out before starting a family. But having a plan can really help reduce stress down the line.

If you're thinking about starting your family or preparing to take leave, you'll want to head to NorthwesternMutual.com/podcast for your parental leave checklist and more episodes and resources that can help you prepare. If you enjoyed this episode, please leave us a rating and a review. We'll see you next time.

[00:19:01] Speaker Northwestern Mutual is the marketing name for the Northwestern Mutual Life Insurance Company, NM, and its subsidiaries in Milwaukee, Wisconsin. Not all Northwestern Mutual representatives are advisors. Only those representatives with “Advisor” in their title or who otherwise disclose their status as an advisor of Northwestern Mutual Wealth Management Company (NMWMC) are credentialed as NMWMC representatives to provide advisory services. Allison Whalen and Parentaly are not affiliated with Northwestern Mutual, and the views expressed by Allison Whalen and Parentaly do not necessarily represent those of Northwestern Mutual or its subsidiaries.