Volvo Cars announced this week that it is giving all its 40,000 employees worldwide six months of paid parental leave, beginning April 1.
The benefit, dubbed ‘Family Bond’, will be extended to all employees who have been with the company for at least one year and who are legally registered parents, including adoptive, foster care, surrogate, and same-sex parents regardless of gender. The leave can be taken any time within the three first years of parenthood, and employees will receive 80 percent of their base pay for the duration. In countries where more generous parental leave is already offered, local regulations will take precedence.
Håkan Samuelsson, Chief Executive of Volvo, said that the new policy is aimed at creating a culture that supports equal parenting for all genders. “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.”
According to the company, the policy is based on national legislation in Sweden, where Volvo was founded and is headquartered. Under Swedish law, companies must provide a total of 480 days of parental leave, to be shared by both parents, at 80 percent of their salary up to 3,800 euros (US$4,500) a month. However, the decision to extend the benefit to global employees is left to the company.
Hanna Fager, Volvo's Head of Corporate Functions including HR, pointed out that paid parental leave is rare in some of the geographies where Volvo has the largest presence, including China and the US.
“We want to lead change in this industry and set a new global people standard,” she said. “By opting all our employees into paid parental leave we narrow the gender gap and get a more diverse workforce, boosting performance and strengthening our business.”
Around 75 percent of Volvo's employees are men, and Fager said the company wants to encourage them to take their parental leave. Volvo plans to eventually share its figures on the participation rate of the new policy “so that other companies can learn from its progress.”