Why US Steel and others are expanding paid family leave
United States Steel Corp. said recently it was expanding its paid leave benefits for nonunion employees and rolling out a slew of new benefits such as gender reassignment surgery coverage and adoption assistance, a sign that the swift expansion of work-life perks across corporate America in recent years has been adopted among even some of the most traditional companies.
The suite of new benefits -- which adds eight weeks of paid leave for new fathers or adoptive parents for the first time and expands the amount of paid leave for birth mothers to between 14 and 16 weeks -- may not be the most generous program out there for new parents. But experts on paid leave say it signals that the benefit has morphed from a featured perk to table stakes in a labor market where companies are approaching near-full employment.
"We're seeing old-world manufacturing -- organizations that traditionally have had a more paternalistic view -- that are no longer just relying on the traditional recruiting methods," said Carol Sladek, who leads work-life consulting at Aon.
Companies also don't want to be behind the curve if a federal paid leave policy finally gains traction, adding a national mandate to a growing number of states or municipalities that require paid leave. "There's absolutely an appetite to not want to be the last one standing," she said.
The new benefits at U.S. Steel, which apply to its roughly 3,200 employees who are not union members, also include coverage for infertility treatments, a matched contribution to dependent care spending accounts, longer bereavement leave, domestic partner coverage, and reimbursement of some adoption expenses, among others.
"In the past, we always tried to be right at median -- we tried to be competitive, but didn't want to pay too much," said Mike Williams, general manager for compensation and benefits at U.S. Steel. Now, the company is thinking about reinvesting in its workforce more like it does reinvesting in its blast furnaces or other facilities. "Part of our strategic initiative is to move up the talent curve," he said. "We want to go after a larger group of individuals that are diverse in thought and diverse in background and make this a better place for working mothers."
In October, tobacco company Reynolds American said it would offer 16 weeks of paid leave to new parents, as well as the ability to work a flexible work arrangement for up to eight months after a return to work. Effective in January, General Mills expanded its paid parental leave benefits for salaried and nonunion employees from six weeks to 18 to 20 weeks for birth mothers; other parents now receive 12 weeks, up from two weeks before.
Even the U.S. Army has expanded its benefits, doubling the leave granted to new fathers or secondary caregivers, among other changes. And this month, apparel maker VF Corp., owner of the brands Wrangler, Lee and Timberland, said it was introducing eight weeks of paid leave for new parents.
Of course, many U.S. employees still lack access to paid parental leave. Just 40 percent of employers, according to a 2018 survey by the consultancy Mercer, offer the benefit; another 2018 survey by the Society for Human Resource Management found that just one in three employers offered more paid maternity leave than what's required by law.
But both of those numbers have jumped substantially in recent years: Mercer's survey put the number at just 25 percent in 2015, and SHRM at one in six in 2011.
"We have reached a tipping point," said Brianna Cayo Cotter, chief of staff for Paid Leave for the United States, an advocacy group. She said Walmart's expansion of hourly workers' paid leave benefits in early 2018 was a wake-up call that prompted many employers to compare their plans to the retail behemoth, no longer able to shrug off more generous leave as a lush perk reserved for Silicon Valley engineers or management consultants.
U.S. Steel's Williams said state legislation or the possibility of federal action on the issue had no influence on its decision to overhaul the company's work-life benefits. Rather, it came from a shift in thinking about investing in its workforce, reducing attrition and attracting new workers as the business started growing again.
As the company struggled with oversupply and falling oil prices and launched a cost-cutting initiative that led to deep job cuts in recent years, U.S. Steel also faced higher attrition as unnerved employees looked elsewhere. Even when business started coming back, Williams said, turnover has improved but remained higher than desired. While its nonunion head count has remained steady, the company has been hiring about 450 employees a year to backfill people who've left because of attrition.
That isn't always easy, especially among employees who might "still see the steel industry as an industry that's on a downward slope," Williams said. "That really sometimes can be a challenge for attracting the right recruits. It's a tough industry to work in -- I've heard folks say there's an easier way to make money than working for U.S. Steel."
But new benefits, as well as added compensation and facility investments, have been "a bit of a morale boost," said Williams. "it goes a long way to changing the mindset that we're going to be here for the long haul."
Members of the steelworkers' union, which are governed by a collective bargaining agreement, do not have access to the new benefits, though that day could come. Said Williams: "I'm sure it will be something that will be discussed in our next round of bargaining."