The Australian Government currently provides 22 weeks of paid parental leave (PPL) at the national minimum wage. It is now common for employers to make payments to workers in addition to government funding in recognition it is insufficient. 75% of all Australian private sector employers with over 100 staff provide employer-funded PPL. This is particularly true of the ASX100 where 92 companies fund a median 16 weeks of primary carer PPL.

G8 Education employs over 10,000 people to run its over 430 child care centres and is one of the largest ASX-listed companies that doesn’t offer employer-funded paid parental leave (PPL). 51% of childcare companies surveyed by the Workplace Gender Equality Agency (WGEA) offer employer-funded PPL. 75% of companies in female dominated industries (like childcare) provide employer-funded PPL, as do 85% of employers with more than 5000 staff offer employer funded PPL. This makes G8 a laggard relative to its size and industry.

According to WGEA, the majority of employers provide employer-funded PPL of between 7-12 weeks, with the average being 10.8 weeks.

G8 is a female-dominated company with 96% of its employees identified as women and its branding targets women. Therefore the company’s performance is more exposed to additional risks, and opportunities, based on its gender equality performance and its reputation as an employer. G8 faces reputational risks from being seen as not supportive of women and mothers, which is who it targets with its services and branding.

Offering no PPL creates additional risk and therefore costs of increased staff turnover when employees exit the workforce following time off for caring duties. The company may find additional costs in its ability to attract and retain top talent in a market where PPL is the norm. Only 3 of the biggest 10 Australian childcare companies don't offer employer-funded PPL. Costs include offboarding, replacement, training and loss of productivity and knowledge. The total cost of losing an employee can range from tens of thousands of dollars to 1.5-2X annual salary.

We estimate the cost to G8 of introducing 8 weeks of employer-funded PPL (including super) to be negligible. By following WGEA’s recommended process, it should be possible for G8 to create a PPL policy where the financial benefits outweigh the financial costs. The minimum requirement under WGEA’s Employer of Choice for Gender Equality citation is 8 weeks.

However, the resolution does not seek to specify an amount of employer-funded PPL, but for the company to be informed by the WGEA Leading Practice Parental Leave Policy Guide in formulating an employer-funded PPL policy.

The proposal balances the need for the company to remain competitive in a market where paid parental leave is increasingly the norm with the flexibility to offer an amount of PPL that the Board determines.