Microsoft will offer new parents an additional eight weeks of paid time off and boost its holiday and retirement perks, a nod to the pressure on the booming technology industry to attract and retain talented employees.
New mothers will soon be eligible for up to 20 weeks of paid leave after the birth of a child.
The announcements came a day after online video streaming company Netflix said it would offer employees up to a year of paid leave after the birth or adoption of a child.
Most countries mandate some amount of paid time off for new parents. The U.S. does not. Many U.S. employers offer paid, short-term disability leave -- usually six or eight weeks -- for women who give birth. Additional paid benefits are sparse.
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In the technology industry, however, companies from Silicon Valley to the Puget Sound offer relatively generous benefits to help recruit new employees and avoid the high cost of turnover in a tight labor market.
Technology companies are also under pressure to make workforces that are overwhelmingly male better reflect society at large. For women, a lack of maternity leave can be a reason to jump ship and seek work elsewhere or leave the workforce entirely.
The rate at which new mothers left Google fell by half when the company boosted its maternity leave from 12 weeks to 18 weeks, executive Susan Wojcicki wrote in The Wall Street Journal last year.
Women make up 27.5 percent of Microsoft’s global workforce, a share that shrinks when looking just at the company’s technology staff or its executives. Just 12 percent of Microsoft’s U.S.-based senior leaders are women, according to the company’s federally reported workforce diversity data.
Microsoft currently offers eight weeks of paid maternity leave for new mothers. That time off can be supplemented, for mothers or fathers, by a 12-week chunk of parental leave that includes eight unpaid weeks.
Under the new policy, that 12-week parental leave will become fully paid just like the current eight weeks, meaning new mothers will be eligible for 20 weeks of paid leave after the birth of a child.
The policies take effect in November.
“It’s our responsibility to create an environment where people can do their best work,” Kathleen Hogan, Microsoft’s human-resources chief, said in a blog post announcing the changes.
Improving benefits is a relatively inexpensive way for employers to boost morale and retain workers, said Andrew Chamberlain, chief economist for Glassdoor.com, a website that has compiled more than 8 million employee reviews of companies across all industries.
“We are going to see other employers follow suit,” Chamberlain said. “It’s like a gift from the employer that can help build engagement and help employees feel better about where they are working.”
About 70 percent of Microsoft’s nearly 60,000 U.S. employees work in Washington, primarily at the company’s Redmond campus and Bellevue offices.
The changes announced Tuesday don’t apply to Microsoft’s workers outside the U.S. or to employees at the company’s more than 100 retail stores.
Hogan said the company would work to align the goals of its benefits policy with local regulations and dynamics in each country in which the company operates. She also said U.S. retail workers would “see enhanced benefits” based on their existing pay and benefit scales.
Another of the Eastside’s big tech companies, T-Mobile, said it increased its paid parental leave effective July 1. Birth moms are eligible for up to seven weeks of fully paid leave. Fathers, as well as mothers who adopt or use a surrogate, can get up to three weeks of fully paid leave, a company spokeswoman said.
Microsoft also announced tweaks to its retirement and holiday plans, set to take effect next year.
Martin Luther King Jr. Day and Presidents Day will be added to the company’s observed holidays, bringing Microsoft’s tally of paid annual holidays to 12.
The company will also remove the cap on its match of contributions to 401(k) retirement accounts.
Previously the company would match half of employee contributions, up to 6 percent of their salary. Now, the company will match half of all contributions up to the Internal Revenue Service limit that caps total annual contributions at $18,000.
The moves at Microsoft and Netflix may resonate at their technology competitors, but not necessarily across other sectors.
The yearlong paid-leave policy at Netflix “is an extremely generous benefit, and while it’s fantastic for the women who work there, I don’t know how feasible it is going to be for the majority of industries to do something to this extent,” said Alina Salganicoff, vice president and director of women’s health policy for Kaiser Family Foundation, a nonprofit that researches health-care issues.
Information from The Associated Press is included in this report.