Paid parental leave was once a benefits unicorn, a fairy tale rather than a reality. But for many modern job seekers, paid parental leave is an outright expectation. In a recent survey, we found that nearly half of applicants wouldn’t try for a job that didn’t offer paid leave. We also found that parental leave ranks as a top preferred leave benefit for job seekers today.
State and federal policy trends are only reinforcing these expectations. The Pregnant Workers Fairness Act (PWFA) has required employers to become far more generous in their parenting-related accommodations, which can include leave. Meanwhile, state-level mandates have been making way for paid parental leave in places like Colorado, Minnesota, and Oregon.
It’s no surprise, then, that 65% of employers in 2025 offer paid parental leave, according to recent AbsenceSoft research. While the benefits of paid parental leave for employees are somewhat obvious, paid parental leave creates advantages for employers, too. In this article, we’ll show you how your organization can drive the greatest return on investment for its paid parental leave program.
Paid Parental Leave Drives Retention, Engagement, and Productivity
A paid parental leave policy, also referred to as bonding leave, gives employees access to paid leave when they add a child to their family. These policies often extend beyond maternity leave, providing leave to moms, dads, and other caregivers.
Paid parental leave policies make powerful tools for employers. They attract, retain, and engage talent, and it’s not hard to see why. While the U.S. offers the Family and Medical Leave Act (FMLA), which allows eligible workers to take unpaid leave upon the addition of a child, it does not provide new parents any paid leave. This leaves families to figure out how they’ll finance their time off.
If the expecting parents’ employer provides paid parental leave, however, that question is more or less settled. Parents can count on a paycheck as they settle into a new phase of life with their loved ones.
The business advantages of paid parental leave
Paid parental leave is a powerful benefit — one that can both attract and retain talent. In fact, bonding leave was the third-most requested leave type in 2025, according to our recent research.
Employers are right to recognize the many advantages of offering paid parental leave, especially as they struggle to retain experienced employees. According to our data, 55% of HR leaders say that reducing turnover is a top priority. A generous paid parental leave policy can make workers pause before seriously considering another opportunity, especially if it doesn’t come with a competitive leave package.
Paid parental leave doesn’t just influence whether employees stay or go, however. It can also boost morale and loyalty. Our 2025 State of Leave and Accommodations Report revealed that employees felt more motivated and productive following a positive leave experience. And 51% of employees felt more loyal.
It’s worth noting that a negative leave experience has the opposite effect on workers. The same research found that a poor leave experience led 40% of workers to start job hunting or quit.
Paid Parental Leave Supports Inclusion, Well-Being, and Employee Experience
Paid parental leave offers strong business advantages as the benefit incentives employees to invest in their work. But that’s not the only way paid parental leave can benefit the bottom line; the policy also furthers inclusion, bolsters worker well-being, and boosts the employee experience.
Looking to Promote Inclusion? Offer Paid Parental Leave.
Paid parental leave builds inclusion in the workplace by ensuring all employees —regardless of their gender, family structure, or caregiving role — have access to time off when welcoming a new child. Here’s how:
- It supports gender equity by normalizing caregiving for all parents. It also reduces what’s known as the motherhood penalty by encouraging moms, dads, and other caregivers to take leave.
- It aids all families, no matter their structure. Paid parental leave benefits adoptive parents, LGBTQ+ parents, and single parents, for example.
- It improves equity in employees’ career progression. By giving all parents access to paid time off, paid leave ensures leadership pipelines don’t exclude moms, dads, and other caregivers.
Battle Burnout from Day One
By providing paid leave, employers are supporting employee well-being in a profound way. More employees are struggling with their mental health, and parents are no exception: 62% of parents report feeling burned out by their caregiving responsibilities, according to a study from the Ohio State University Wexner Medical Center.
Employers with paid parental leave policies are offering tangible, multi-faceted support to parents as they embark on their journey as caregivers. Most obviously, these policies reduce financial strain by allowing employees to take time off while continuing to collect their paychecks. They also provide the time, space, and bandwidth parents need to weather the transition that comes with adding a new family member.
Paid parental leave also sets the tone for parents’ new relationship with work: When employers encourage caregivers to fully step back and prioritize family life, it gives them the freedom to continue putting their family first when they return to the office.
Many employers are working to build leave programs that support employee wellness. According to our recent research, 61% of HR leaders said they want their programs to support well-being, slightly outranking employee retention, another top goal.
Notably, many employers are providing parents with other types of support beyond leave. Accommodations for pregnant workers have been on the rise since the passage of the PWFA. In fact, 33% of HR leaders in our recent survey said that PWFA accommodations ranked among the top three reasons for requests.
The Hidden Costs of Mismanaging Paid Parental Leave
Paid parental leave policies offer organizations a host of advantages. But to reap the full reward these policies generate requires strategic implementation. Even though paid parental leave policies are relatively straightforward, they still require careful management to provide employers a high return on investment.
What’s more, employers may encounter serious costs by mismanaging their paid parental leave policy. We’ll walk you through a few common mistakes to avoid in the following sections.
Poor Processes Mean Poor Pay-Off
You may be keeping track of who’s taking parental leave with a sticky note, spreadsheet, or shared document. This is a risky approach. Manual leave processes can’t keep up with rising demand. More than half of organizations reported an increase in leave requests in 2023, 2024, and 2025. This means that leave use is on the rise, and paid parental leave is no exception.
That’s not the only risk associated with manual processes, however. When organizations take a DIY approach to leave, it’s likely they’ll make mistakes that result in unmotivated, disengaged employees.
Picture this: Your family is a few months away from welcoming a new baby. You tell your supervisor the good news, and she mentions you’ll be eligible for paid parental leave. You and your family plan on using this benefit, although you hear nothing more from your manager.
A few weeks later, your baby makes an early entrance, landing her in the NICU for a couple of days. You’re eager to initiate your time off, but that’s when you’re hit with a flurry of messages and paperwork. Because none of the details regarding your leave were taken care of prior to your child’s arrival, you now have time-sensitive homework to do while adjusting to life with a newborn.
As if this weren’t bad enough, your next paycheck doesn’t arrive, even though your manager said you’d receive full compensation during your time away. Hospital bills litter the kitchen table, but your bank account isn’t ready.
These frustrations are classic markers of a poor leave experience, and they all stem from poor processes. Employees who encounter this kind of experience won’t just think less of your organization, they will also return from leave feeling unmotivated. Our report indicated they may even warn potential talent away from the organization.
Compliance Complexities Become Organizational Threats
When your organization offers a paid parental leave policy, it doesn’t become immune to the requirements of state and federal law. In fact, these policies often overlap with laws like the FMLA — FMLA compliance is a top challenge for 43% of HR leaders, according to our recent survey. Policies may also collide with state paid family leave laws and, most confusingly, other company policies.
This tangled web of entitlements is difficult for HR to navigate. Teams must calculate eligibility, pay, and timeliness across multiple policies and statutes. Without the right technology, errors are both common and expensive. Employers can land themselves in serious legal trouble by wrongly denying a parent leave. The consequences of this mistake can quickly multiply if they’ve made the error for multiple parents.
Why Modern Leave Management Works
Employers can avoid these outcomes by swapping manual, disparate processes for a unified, technology-forward approach to leave. With a system like AbsenceSoft, for instance, employers can seamlessly manage paid parental leave and other company policies alongside federal- and state-mandated leave.
In the next few sections, we’ll discuss how your organization can boost the ROI of your paid parental leave program using leave technology.
Protect Compliance and Build Trust with Streamlined Processes
Legislation regulating parental leave is complex. Add other laws and company policies to the equation, and employers are left navigating a ridiculously complicated leave landscape.
That’s why teams need technology that will provide the foundation for compliance. Providers like AbsenceSoft hire compliance experts to design platforms like the AbsenceSoft Compliance Engine™, which automates key calculations and positions HR managers to make complicated decisions accurately and efficiently.
When HR teams have the right tools, they can manage more cases without letting the quality of their work suffer. Consider Cache Creek Casino Resort, a northern California-based organization with more than 2,000 employees. For many years, the resort’s leave team managed every leave case manually, which led to errors and data loss.
With AbsenceSoft, however, the team gained a centralized platform where it could access employee data, pre-generated communications, instant eligibility communications, and more. The platform also automatically generates the team’s to-do lists, allowing it to work with maximum efficiency.
With a platform like AbsenceSoft, employers also avoid the risk of benefits overpayments. These occur when return-to-work dates go unnoticed and when employees on non-employer paid leave — such as state-sponsored parental leave — continue to use employer-sponsored benefits. Manual leave processes frequently fail to flag non-employer paid leaves and initiate employee billing, which means employers are left to absorb the full expense.
AbsenceSoft eliminates these scenarios by flagging leave cases and triggering billing workflows. By doing so, our platform helps employers save potentially thousands of dollars.
Improve the Leave Experience for Everyone with Self-Service and Automation
Leave technology lays the foundation for positive any leave experience, and not just for employees. AbsenceSoft’s self-service portal makes it easy for workers to request leave, but it also ensures employees provide the information HR needs, making the processes smoother and more efficient for everyone.
In addition to our self-service portals, our platform is outfitted with intelligent automation, which will drive automation improvements with medical certification reviews, streamlined intake, and personalized communications.
Drive Better Business Decisions with Better Data
Technology like AbsenceSoft allows users to continually improve their leave programming. Our platform offers data reports that are key to helping HR stay strategic, even when they’re drowning in leave cases. With this information readily accessible, your HR team can refine how it handles paid parental leave, FMLA cases, and more.
With AbsenceSoft, you can maximize the ROI of investing in offering paid leave. You can minimize the amount of work it takes to administer the policy, provide a great leave experience, and see real-time data to inform strategic policy changes. To learn more about how our platform enhances any type of leave management, book a demo today.