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Opinion Why Netflix’s unlimited parental leave is probably a bad idea for your company

HANDOUT IMAGE: CEO of Netflix Reed Hastings talks with press on the red carpet at the Google/Netflix White House Correspondent's Weekend Party at United States Institute of Peace in Washington, D.C. on May 2, 2014. (Photo by Tony Powell)

In the race to load up tech industry employees with generous perks, Netflix just made a quantum leap ahead of most everyone else. Late Tuesday afternoon, the company announced in a blog post that it was introducing an unlimited maternity and paternity leave policy, creating what may well be the longest parental leave available to new moms and dads at a large U.S. company.

Netflix chief talent officer Tawni Cranz wrote in the post that employees — whether men or women — could step out as long as they want during the first year following their child's birth or adoption. They can also return part time or full time, and will keep getting paid as usual, doing away with the hurdle of moving onto and off of disability pay.

"Each employee gets to figure out what’s best for them and their family, and then works with their managers for coverage during their absences," Cranz wrote.

One could almost hear the collective gasp from working parents everywhere. It was called trail-blazing, even game-changing. Companies including Johnson & JohnsonAccenture and Blackstone Group recently stretched their paid leaves to four to five months, keeping pace with the likes of Facebook and Google. Yet Netflix just trumped them all.

As a result, some companies may decide they'll need to mimic Netflix's unlimited parental policy to keep up, just as many have mirrored the company's perk of unlimited vacation. Being able to take as much paid time off as you want, provided you get your work done, has become a popular Silicon Valley benefit — and roughly 2 percent of all U.S. companies now offer it, according to the Society for Human Resource Management.

But companies should think twice before playing copy cat when it comes to parental leave. An unlimited policy sounds great in theory. Unless the culture really supports it, however, employees won't know how to react and may even end up taking off less time than they otherwise would.

"Most people need some parameters around leave to have that 'permission' to take what they need," said Carol Sladek, who leads work-life consulting at Aon Hewitt. "Without those parameters, it’s a lot more difficult for employees, managers and the corporate culture to be accepting."

Part of the challenge, Sladek added, is that "we’ve been wired in the U.S. to think about time off as an entitlement that you accrue."

[One of the world's biggest companies is ditching annual performance reviews and rankings]

Netflix, she says, could be an exception given the culture it has already created. The company subscribes to a "freedom and responsibility" approach, outlined in a slide deck that's long been widely circulated online, which basically says a company should treat workers like responsible adults. Netflix had a traditional vacation policy until 2004, when an employee pointed out that Netflix didn't track hours worked per day or per week — so why did it track vacation days per year?

That sparked the idea at Netflix that the company didn't actually need to have a policy. As detailed in one of the slides: "There is also no clothing policy, but no one comes to work naked." The slide deck also pointed out that Netflix leaders set examples by "taking big vacations," as a way of making it clear that the lack of policy shouldn't discourage employees from taking time off.

"They already have the cultural background," Sladek said. As a result, it's more likely Netflix can "make this work for them because it's a logical extension of their cultural philosophy."

Asked whether the company would be doing anything in particular to push the message that unlimited parental leave really means what it says, a Netflix spokesman wrote in an emailed statement that "we ask our employees to make the best decisions for Netflix everyday. This frees them to do the same for their expanding families with the company's full support."

In places where such freedom isn't ingrained, an "unlimited" policy can have unintended side effects. Take the example of the British photography app company Triggertrap, whose founder has written about his company's experience with the unlimited time off idea last year.

His problem didn't turn out to be that people were taking too much time off under his ‘take as much holiday you want’ approach. It's that they weren't taking enough: In the United Kingdom, employees are entitled, by statute, to 28 days off, but his average employee was taking just 15. "Because we weren’t explicitly tracking, people felt guilty about taking time off," he wrote.

The same thing has the potential to happen with parental leave — if not at Netflix, then elsewhere — especially when you add in the gender dynamics that make it a traditionally thornier subject than regular time off. If the policy says "unlimited" but no one actually sees a company leader take six, nine or even 12 months off, they're more likely to default to what's considered normal at other companies. And that could be particularly true if there's no manager of their own gender who is setting an example.

There are also the inevitable logistical issues of covering for employees who are gone that long. "It's very difficult to take nine months off," Sladek said. "Some of the barriers may be that managers just won't be able to handle it."

Read also:

Netflix parental leave: Today a PR move, tomorrow the norm?

The catch of having an unlimited vacation policy

Netflix will offer a year of unlimited leave for new moms and dads

Netflix vacation policy is only the tip of a radical compensation iceberg

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