When the Senate passed the Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Bill 2022 earlier this month, it was the first meaningful change to PPL legislation since it was introduced in 2011. 

For parents whose children are born or adopted from 1 July 2023, the requirement that 18 of the 20-week paid parental leave entitlement be taken by the ‘primary carer’ will be removed. The new legislation will allow single parents to use the full 20-week entitlement of paid leave, up from 18 weeks currently.

Under the new scheme, PPL will be extended from 20 to 26 weeks by 2026, with an extra fortnight of paid leave added each year from July 2024 until 2026.

Eligibility for parental leave in Australia

To be eligible for parental leave in Australia, an employee must have worked for the same employer for at least 12 months before the birth or adoption of their child. They must also have worked at least 1,200 hours during the 12 months before the expected date of birth or adoption.

Types of parental leave in Australia

There are two types of parental leave in Australia: unpaid parental leave and government-funded parental leave.

Unpaid parental leave: This type of leave allows eligible employees to take up to 12 months off work to care for their newborn or newly adopted child. During this time, their job is protected, and they are entitled to return to the same or a similar position when they return to work.

Government-funded parental leave: This type of leave provides eligible employees with financial assistance during their time off work. The scheme is called the Paid Parental Leave scheme and is administered by the Australian Government. Under this scheme, eligible employees can receive pay at the national minimum wage.

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Australia was already behind most other OECD nations as the second-last to introduce a government PPL scheme, and while it procrastinated on making such leave more equitable, there were extensive consequences for our gender pay gap.

The numbers speak for themselves:

• In 2021-22, women used 88 per cent of primary carer’s leave, according to the Workplace Gender Equality Agency (WGEA).

• Women account for the majority of part-time workers in Australia. In the month ending 31 December, men had worked approx. 97,000 part-time hours compared to 210,000 for women.

• Australia has the third-highest part-time employment rate in the OECD. 

• Women retire with 23.4 per cent less super than men, according to the Australian Association of Superannuation Funds.

A Treasury analysis found that a woman’s earnings fall by an average of 55 per cent in the first five years of parenthood. 

The Australian HR Institute industry magazine states a major contributor to Australia’s slow progress is the fact that our current PPL scheme actively encourages women to have career breaks and discourages men from doing the same. Also, terminology such as ‘primary carer’ and ‘secondary carer’ sends the message that men should take a back seat.

“The leave imbalance entrenches traditional gender roles. It sends the message that there’s only a minimum role for fathers,” says Dr Leonora Risse, Senior Lecturer in Economics at RMIT University, who specialises in gender equality. “We know there are many fathers who aspire to spend more time with their children to bond with their family, but our current policy settings and cultural norms prevent them from doing that.

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Building a well-rounded parental leave policy

When considering the benefits of offering PPL, many organisations go to cost first. They weigh up the short-term price tag, but rarely consider the long-term benefits associated with PPL – in particular, attraction, retention and productivity. 

“For a long time, the support offered by organisations has been seen as a nice-to-have, rather than a talent retention strategy,” says Gilbert. “But it’s more than that. It’s a critical path to closing the gender pay gap, the leadership gap and the super gap, and increasing female participation in the workforce.”

An equitable parental leave policy shouldn’t stop at offering PPL. HR will play a significant role in normalising both parents taking leave and introducing policies to support them before, during and after leave. 

There’s a clear business case for offering PPL and instituting a family friendly workplace culture but there’s more to parental leave than a simple cost-out. Equitable parental leave is a human rights issue. And this is HR’s opportunity to step up, help companies live their values and make a tangible difference to Australia’s gender pay gap. 

“Of course, parental leave is a strategic investment for businesses. But more than that, it’s about people and principles,” says Risse. “Your bottom line will fluctuate, but your principles should stand firm.”

Source HRM Online

If you would like a strategic approach tailored to your specific business needs contact us to arrange an obligation free chat about how we can help.

Through impactful HR we create a positive employee experience every time.

We aim to create future-focused, people centred HR solutions to accelerate organisational and employee wellbeing, engagement and performance by making HR easy.

THE PEOPLE & CULTURE OFFICE SUPPORTS HR TEAMS AND ORGANISATIONS AUSTRALIA-WIDE TO TAKE A FRESH APPROACH TOWARDS THEIR PEOPLE AND CULTURE FUNCTION. 

Businesses exist to make profit, nobody is denying this. We need to make a profit so we can grow, so we can keep people employed, and so we can meet a need for whatever it is we are supplying our consumers.

But when leadership drives a profit over people mentality things start to go wrong. When it’s the focus during a skills shortage – well it impacts business sustainability.

People over profit is becoming the new norm, are you paying attention to the mindset shift?

In June 2020 I attended the Australian HR Institute WA State Conference where Associate Professor Ben Farr-Wharton, from the School of Business and Law Edith Cowan University, was a keynote speaker.

Ben spoke at length about how a focus on performance as a motivator, shareholder value at all cost breeds toxic workplace cultures, narcissistic leaders and a lack of integrity driven by a win at all cost management ethos.

But more than the culture it creates, we need to take a deep dive into how it affects your ability to attract & retain staff. In particular, the age demographic that by 2025 will represent 80% of the workforce.

PWC Australia have led the way with their Future of Work project, and their report “What Workers Want”

When we view the future of work through the lens of age demographic and what those workers want (catch up on past blog posts here, here, here & here) you can see that in the midst of a skills shortage, and particularly in regional areas or niche industries, there will be employers who will, quite simply, run out of people to employ.

Data is where the answers lie

Now’s the time to really start examining your people metrics.

▸ How high is your employee turnover?

▸ What is your employee tenure?

▸ Is there a particular age group that leaves at a higher rate than all others?

▸ Who are you attracting through your recruitment efforts?

Are you an employer who has stripped back employee benefits and conditions, rewards leaders based on financial outcomes instead of how they engage with their people and is quick to pull the trigger instead of developing people? I’m predicting you will see the following in your metrics.

▸ 0 – 3 years of service represents the highest percentage of employees

▸ Longer serving employees are generally aged in their late 40’s or older

▸ Over the past 4 years you’ve found it increasingly harder to attract and retain employees in their 20’s and early 30’s

▸ Employees aged in their late 20’s to late 30’s represent the age demographic most likely to leave in their 1st year of employment

▸ Apprentices & trainees leave almost immediately after being signed off

In 2 years time Millennials and Gen Z will make up 80% of the workforce, how sustainable will your business model be?

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If you would like a strategic approach tailored to your specific business needs contact us to arrange an obligation free chat about how we can help.

Through impactful HR we create a positive employee experience every time.

We aim to create future-focused, people centred HR solutions to accelerate organisational and employee wellbeing, engagement and performance by making HR easy.

THE PEOPLE & CULTURE OFFICE SUPPORTS HR TEAMS AND ORGANISATIONS AUSTRALIA-WIDE TO TAKE A FRESH APPROACH TOWARDS THEIR PEOPLE AND CULTURE FUNCTION. 

Before the Australian trials, before the UK trials – we implemented a 4 day work week. Driven by a desire to put wellbeing front & centre we made the shift early in 2022.

But more than that, rewarding output not hours is something that needs to be normalised, and I wanted to show how it can work.

I implemented a number of wellbeing focussed initiatives, the key being a 4 day week generally resulting in both of us working around 30 odd hours per week.

Because we work from home with minimal interruptions our output is high. For this reason it was very important that compensation was based on a comparable full time salary – not pro rata

And I need to be clear, the intent wasn’t to take a full time workload and put the pressure on to get the work done in 4 days. Our workflows are scheduled based on what is reasonably achievable in 30 hours, factoring in our individual pace and skill.

Realistically though, we are achieving the same output as if we were in an office working 5 days per week, it’s the lack of water cooler chatter because we work from home, coupled with the the focus on output. There is something very freeing about flipping the narrative from “you’re employed to sit here from 8am – 5pm” to “this is what we need to get done this week, once you’re finished focus on something you’re passionate about”

Current “4 Day Week” trials work off a 100-80-100 model where companies allow employees to work 80% of their regularly scheduled hours in return for 100% of their pay and a pledge to deliver 100% of their standard output.

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After 6 months we each wrote a social media post to discuss our experiences, this is what Tiahanna had to say:

“I have a mining background where corporations number 1 priority is output and production rather than the physical and mental well-being of their employees. I used to work an 8/6 roster, although the 6 days off were blissful, the 8 days on were regularly so hectic, it got to the point where I was wasting half of my days off just trying to recuperate rather than doing things for myself⁠
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The 4 day work week has given me a larger perspective on life and has given me the freedom to make choices and create a better work/life balance – we work to live, we don’t live to work⁠”

And me?

“I certainly feel more balanced in body & mind and that has assisted with clearer thought processes related to the business. I’m finding it easier to integrate all aspects of my life and getting to spend more time off the hamster wheel of life”

Which brings us to the present, approaching the 12 month mark. The verdict?

Focussing on 4 key area’s important to her, Tiahanna provided the following feedback.

• My personal life – This did not take any hits, I didn’t have to miss out on anything due to fatigue, stress, overtime, or anything else.
• My health – I don’t think I’ve moved my body this much during my whole life, the balance of a 4-day work week has given me so much energy and focus, I really feel like I can look at most things so much more holistically now – that may sound wishy washy but I don’t think many people understand what having a good balance can actually feel like. 
• My work life  – flourished, I’m working less but I definitely feel like I’m getting more done and to a better standard. 
• Development – I even had enough energy to add on studying, that’s right, I’ve gone back to school so I can better serve all of our wonderful clients.

And from my perspective as a business owner and participant?

The short version – The work gets done, absenteeism isn’t an issue and engagement is high. (I mean, what more can you ask for)

As a HR community we know that when people are put first the organisation performs better. When flexibility exists to allow greater integration of a person’s work & personal life, wellbeing increases, burnout and stress decrease. Health outcomes are higher, work output is higher, employees are happier and more engaged.

And my experiences as a participant? As any small business owner will tell you, there’s “work hours” then there is all the other stuff that gets done after hours and on weekends. Although I recognised early on that unless I wanted to burnout and grow to resent my business I needed to put boundaries in place, it’s not realistic to be militant with maintaining them.

First & foremost, we are a service based business, and when things go wrong it doesn’t always fit neatly into my hours of work. So 100% consistency of maintaining a 4 day week, for me, was never going to be achievable. But predominantly it has been.

The clarity that comes with not always “being on” has produced better business outcomes which is reflective in the bottom line.

I have more time to focus on the non work related things that are important to me, we aren’t our jobs so *this* is a super important factor to be cognisant of.

But don’t just take our word for it, 96.9% of employees who have trialled a 4 day week throughout 2022 want to continue. Trials scored a 9/10 with companies.

A wide range of well-being metrics showed significant improvement from the beginning to the end of the trial. Stress, burnout, fatigue, work-family conflict all declined, while physical and mental health, positive affect, work- family and work-life balance, and satisfaction across multiple domains of life increased.

Of the companies that provided metrics related to revenue there was an 8.14% increase during the trial period. When compared to the same 6 month period in 2021 the increase was much larger at 37.55%.

You can download the full report here

Through impactful HR we create a positive employee experience every time.

We aim to create future-focused, people centred HR solutions to accelerate organisational and employee wellbeing, engagement and performance by making HR easy.

THE PEOPLE & CULTURE OFFICE SUPPORTS HR TEAMS AND ORGANISATIONS AUSTRALIA-WIDE TO TAKE A FRESH APPROACH TOWARDS THEIR PEOPLE AND CULTURE FUNCTION. 

Organisations have come to realise that traditional approaches to performance management do not effectively motivate employees. In fact, they often have the opposite effect. ⁠
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Performance management has buckled because organisations have prioritised measurement over development. ⁠
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The Shift From Performance Management to Performance Development
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Successful performance development is not just about changing the way annual reviews are conducted. Rather, performance development is about creating a cultural shift in how people work and how they work together. ⁠
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Moving from performance management to performance development requires managers to think of themselves in a new way: as a coach, not a boss.⁠

⭐️Establish expectations ⁠
⭐️Continually coach⁠
⭐️Create accountability⁠
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When performance becomes focused on these core principles, manager-employee interactions and discussions feel encouraging, purposeful and rewarding in ways that annual reviews do not. ⁠
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Creating a culture of performance development around these core principles also helps employees better own their performance, development and career.⁠
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Too often, managers set the same expectations for all employees, forcing people into the same neat little box. ⁠
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A good manager not only establishes expectations and gives employees a voice in the process, but also helps employees understand why their role exists and how their role expectations align with team and organisational objectives⁠

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We will work with you to create a system that allows managers to work with employees to identify their capabilities, leverage their strengths and provide development opportunities to close any gaps between their capabilities and what is expected of them⁠

The People & Culture Office supports HR teams and organisations Australia-wide to take a fresh approach towards their people and culture function. 

With 20-plus years in the HR game behind them, Tiahanna & Simone create future-focused, people centred HR solutions to accelerate organisational and employee wellbeing, engagement and performance by making HR easy

The People & Culture Office is a HR consultancy based in Kalgoorlie Western Australia, servicing organisations Australia wide.

No contracts | No ongoing fee’s | Just bespoke HR solutions to say goodbye to feeling lost & out of your depth when dealing with employee issues⁠.