A company that values what is at the core of their business – the people – Volvo Cars recently announced that it is opting in its 40,000 plus employees around the globe, into a new all-gender, paid parental leave policy.
Known for being the very first carmaker to introduce the three-point safety belt in their vehicles, and more recently putting a speed cap of 180kph on all new Volvo cars, this new announcement has been received positively all over the world.
The “Family Bond” policy will give all employees with at least one year’s service a total of 24 weeks of leave at 80% of their base pay by default. The policy applies to either parent and the leave can be taken anytime within the three first years of parenthood.
“We want to create a culture that supports equal parenting for all genders, ” said Hakan Samuelsson, Volvo Cars chief executive. “When parents are supported to balance the demands of work and family, it helps to close the gender gap and allows everyone to excel in their careers. We have always been a family-oriented and human-centric company. Through this parental leave policy, we are demonstrating and living our values, which in turn will strengthen our brand.”
The global policy is more inclusive and supportive than many existing policies around the world, and includes all legally registered parents, including adoptive, foster care and surrogate parents.
Some countries do not offer any paid leave to new parents, or exclude certain groups of parents – the latter is particularly true for fathers.
Volvo Cars’ global policy is inspired by national legislation in its home market of Sweden, famous around the globe for its generous parental leave arrangements, which have delivered tangible benefits for parents and children alike in recent decades.
It follows a parental leave pilot scheme launched in the EMEA region in 2019, in which 46% of applicants were fathers.
When studying the outcome of its parental leave pilot, the company found that employees appreciated the policy for being gender neutral, inclusive and adaptable to personal needs. The studies also resulted in important insights on how to encourage even more employees to take parental leave and make parental leave for both parents the new “norm”.
“At Volvo, our focus has always been on people. Family Bond by Volvo Cars is more than a new policy or benefit for employees – it is the embodiment of the company’s culture and values. We believe that collaborative, inclusive, and diverse work environment ensures a happy workplace and in turn a successful organisation, ” said Rema Chetty, head of People Experience at Volvo Cars Malaysia.
During an interview at their regional training centre in Petaling Jaya, Selangor, she expressed how pleased the team were at the announcement.
“The team is very happy, we have a very young workforce and they’ve began talking about maybe becoming parents next year, ” said Chetty, who is a parent herself. “Reactions globally have been good, I think it’s also the paternity bit that has become something that everyone is talking about.
“Also in this part of the world we don’t have such good paternity leave as opposed to our counterparts in Europe. Volvo saw a gap there and decided that all countries where Volvo operates from will have the same policy. Every employee within Volvo Cars will be able to enjoy the same benefits.”
To Chetty, when employees are happy at home, this translates to happier employees.
“We are a people first company, everything we do starts with people. Volvo has always been promoting inclusive culture.
“We decided to make this available for mothers and fathers, also for parents who have adopted children and parents who foster children. It’s all about bonding with the children, the company wants every new parent to take time to bond with their child.”
“If we give them the freedom and flexibility to be who they are and to spend as much time as they want at home and to bond with their child and family they will come back as happier employees, ” she added.
Some of the obstacles that limit the uptake of parental leave include parents’ concerns around the potential impact it might have on their team, fear around long-term career opportunities, and a cultural mindset about of what is expected of fathers in the workplace and at home.
To encourage uptake, Volvo Cars has focused on communicating about its parental leave policy more effectively, through presenting the 24 weeks parental leave as a pre-selected option.
The company aims to create a “default effect” – essentially, people are highly likely to stick with pre-selected options, and ambiguous language, such as “up to 24 weeks”, is avoided as we tend to predict negative outcomes when there is uncertainty.
Through these efforts, Volvo Cars aims to remove confusion and cultural barriers, and provide parents with certainty.