Most US employers plan to boost their leave programs in next 2 years, WTW finds

Dive Brief:

  • Talent attraction and retention needs are motivating many U.S. employers to make changes to their leave programs over the next two years, according to WTW survey data announced Jan. 22.
  • The firm found that 84% of the 517 employers surveyed between October and November 2023 planned to make changes, with enhanced parental leave, bereavement leave and caregiver leave being top priorities. With 25% of respondents already offering paid caregiver leave and 22% planning to do so in the next two years, WTW said this could mean nearly half of employers will offer such support within that time frame.
  • Talent attraction and retention was the number one driver behind leave program changes, but “nearly as many” respondents cited the need to enhance their employee experience as a motivator, WTW said. Those findings were consistent across all employer sizes and industry types in the survey.

Dive Insight:

Leave program enhancements have become table stakes in the post-pandemic talent market, with paid leave in particular being a draw for caregivers. A 2023 Bipartisan Policy Center report found that, among U.S. adults ages 20 to 54 who are out of the labor force, caregiving responsibilities and personal health issues were their main reasons for not seeking work. BPC said that a lack of access to paid family and medical leave may exacerbate these barriers.

Aside from market pressure, leave changes have also been spurred by legal requirements, particularly at the state and local levels. That patchwork is expected to become even more complicated in the years ahead, with as many 18 states set to require some form of paid leave by the end of 2026, experts said during a Disability Management Employer Coalition webinar in September.

Meanwhile, lawmakers continue to debate the creation of a federal paid leave standard. No legislative efforts have made much headway despite bipartisan recognition of the need for paid leave protections. Congressional representatives released a “policy framework” earlier this month outlining what a potential agreement could look like.

Leave law compliance creates a number of challenges for employers, though, and WTW found that the share of employers that outsource their leave program management is expected to increase by 22% in the next two years. But “many” of the 64% of respondents that currently outsourced state family and medical leave administration told WTW that they were dissatisfied, and 54% were considering moving to a new administrator in the next two years.

But that work is not impossible. International employers such as Thomson Reuters have addressed paid leave requirements by developing a global minimum standard for certain leave types, for example.