News Analysis: Netflix Ups the Ante

The move by Netflix to offer the most generous maternal and paternal leave policy of any known major corporation does more than put pressure on other technology competitors. It sends a message to every organization that hasn’t yet identified the critical importance of having engaged people. Netflix isn’t just doing this to be “nice.” There’s a bottom line benefit to attracting and retaining talent that applies to almost every organization on earth. Here is what Tawni Cranz, Netflix’s Chief Talent Officer, posted on the company’s website to explain the decision:

“At Netflix, we work hard to foster a ‘freedom and responsibility’ culture that gives our employees context about our business and the freedom to make their own decisions along with the accompanying responsibility. With this in mind, today we’re introducing an unlimited leave policy for new moms and dads that allows them to take off as much time as they want during the first year after a child’s birth or adoption.

“We want employees to have the flexibility and confidence to balance the needs of their growing families without worrying about work or finances. Parents can return part-time, full-time, or return and then go back out as needed. We’ll just keep paying them normally, eliminating the headache of switching to state or 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.”

From our standpoint, here is what is most important in terms of what all organizations can learn from this:

“Netflix’s continued success hinges on us competing for and keeping the most talented individuals in their field. Experience shows people perform better at work when they’re not worrying about home. This new policy, combined with our unlimited time off, allows employees to be supported during the changes in their lives and return to work more focused and dedicated.”

This is what we mean by the “virtuous circle” of enterprise engagement.

The stock of Netflix hit a new high in the two days after it made this announcement, and Microsoft announced it would increase its parental level policy to 12 weeks for men and 20 weeks for women.