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April 01, 2021

Volvo employees to be granted 24 weeks of paid parental leave

Volvo employees to be granted 24 weeks of paid parental leave

The Swedish automaker Volvo Cars has announced that it plans to increase paid parental leave for both hourly and salaried employees across the globe to 24 weeks. The new “Family Bond” program applies to all employees, regardless of gender, who have been with the company for a minimum of one year. The new policy is inclusive of same-sex couples, and includes those who become parents through giving birth, adoption, permanent foster care and surrogates.

Volvo Cars’ new program guarantees that employees will be paid 80% of their base salaries and that the parental leave is valid for up to three years of parenting a new child. The new policy also plays a very important role as Volvo Cars has announced its focus on becoming an all-electric vehicle manufacturer by 2030. In light of this goal, the new “Family Goal” is meant to help assist the firm in talent acquisition and retention.

“We do this, not to introduce some kind of new favorable benefit to our employees, we do it more because we think it’s good for our company. We will be more attractive as an employer. There’s a competition going on for talent,” Volvo CEO Hakan Samuelsson said. He added that whilst the new initiative will cost in the “single-digit millions,” it will be worth it as long as “it gives us better, diverse management and a stronger brand.”

IZA World of Labor author Astrid Kunze has also found that talent acquisition and retention are two big issues companies face. “Two significant challenges firms encounter are how to recruit the best workers and how to maintain human capital within the firm. In many countries, women with children fall behind comparable men in terms of career prospects and wages. Part of the reason for this achievement gap is that a large proportion of women do not return to work soon after childbirth,” Kunze writes in her article.

Read Astrid Kunze’s article Parental leave and maternal labor supply.