Mandatory paternity leave might be Wall Street’s best bet for gender equality

When new parents take their leave, everyone wins.
When new parents take their leave, everyone wins.
Image: AP Photo/Robert Wands
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It was enough to warrant a story all of its own: the courageous investment banker who actually took his paternity leave.

In 2016, this Wall Street Journal scoop, headlined “A Top Investment Banker Actually Took All His Paternity Leave for Once,” told the story of Sam Kendall, who was at the time head of investment banking at UBS. He had decided to take two weeks off to support his wife and their newborn twins. (For his first child, Kendall had taken off just a day and a half; he had nearly missed his second’s birth because he was “in the middle of a block trade.”)

Is Kendall such an anomaly? Possibly. Several major US banks declined Quartz’s request to contact any investment bankers under their employ who had taken their paternity leave, or to give statistics on how many take advantage of what are often generous offers of leave. (At JPMorgan Chase and Bank of America, all parents get 16 weeks off, while at Morgan Stanley, Wells Fargo, Citigroup, and Goldman Sachs, “secondary parents”—whichever will not be the primary caregiver—are entitled to four to five weeks’ leave, according to women’s career site FairyGodBoss.)

America’s largest banks—and particularly their investment banking divisions—offer some of the most competitive, coveted jobs in the US, with salaries to match. But though gender parity may be a feature of the lowest rungs of the corporate ladder, it’s lonely for women at the top. A 2018 survey from LeanIn.Org and McKinsey & Co. found that only one in five senior leaders is female. (One in 25 is a woman of color.) Wall Street banks say they’re interested in addressing that imbalance—Goldman Sachs, for instance, has a designated Office of Global Leadership and Diversity—but the stats aren’t so encouraging. Attrition of female employees seems to set in at once they reach middle management, which means executive-level employees are overwhelmingly male.

One solution? Make parental leave compulsory for all new parents, regardless of their gender.

There are strong structural and cultural incentives for women who have given birth to take as much parental leave as they’re offered. They’re often given more time off, may need literal recovery time from a traumatic birth, and sometimes face a barrage of scrutiny and criticism if they jump straight back into the workplace. There’s also a strong correlation between very short maternity leave and postpartum depression. (The relative costliness of childcare, as well as the fact that women in heterosexual relationships tend to earn less than their partners, creates yet another motivating factor.)

They’re good reasons, and tend to be understood or even anticipated from employers, but they nonetheless put mothers at a disadvantage at the workplace. For secondary parents, however, for whom there’s less of a cultural expectation, taking parental leave may be read as a lack of commitment to their careers. These parents often want their time off, but feel unable to take it: 57% of men polled in a survey by Deloitte don’t exercise their right to parental leave out of a fear that they’ll be perceived as not caring about their jobs.

When it comes to Wall Street, the data on how many secondary parents do take their parental leave is quite spotty. Most banks don’t release it, or reveal only some parts. In 2016, the first year of Wells Fargo’s paid parental leave, men made up just under 40% of all 8,000 parents who took some leave. For the most part, according to an interview with Bloomberg Law, these men were “non-primary parents,” allocated a maximum of four weeks. (Women made up 9% of this group.) But though they may have had the right to almost a month, it’s not clear whether they took all of that time, or just a few days.

Anonymous reports from within other banks paint a more damning picture: At Citi, one employee felt that though paternity leave was “excellent…men rarely take advantage of it. At most, I know of someone who took three weeks—and other men in the office were shocked.” Another warned: “They are not welcoming of women going on maternity leave in all parts of the organization. Ensure your position is secure prior to going out.”

When they return to work, women often find themselves facing an environment where their needs are poorly understood or barely accommodated. Earlier this year, a former Morgan Stanley banker sued the bank for wrongful termination when she was fired 22 days after returning from her maternity leave. A 24-page complaint detailed that she had reportedly received her first negative performance review shortly after telling her managers about her pregnancy; on her return, “her breaks to pump breast milk became a topic of conversation among male coworkers, with one manager asking her repeatedly, ‘“What’s wrong with formula?’,” according to the complaint.

Josh Levs is a former CNN journalist and the author of All In: How Our Work-First Culture Fails Dads, Families, and Businesses—And How We Can Fix It Together. He now works with corporate partners such as banks and law firms, helping them to design and implement better paternal leave policies. But it’s not enough just to have these policies, Levs told Quartz—companies have to encourage and support men to take advantage of them.

To adjust their corporate culture, Levs encourages firms to introduce mandatory training for managers alongside their flashy new parental leave policies, so that men are actively encouraged “to take the entire leave.” This, he says, makes it much more likely to become a cultural norm. He’d like bosses to proactively sit down with their employees, for instance, and say: “I know you’re having your kid sometime in the spring. Show me here on this calendar which weeks you would like to take off,” with the caveat that those weeks may shift depending on the precise arrival date of a new child. When planning for paternity leave comes from those in charge, employees don’t have to go begging for what they’re entitled to or feel as though they’re doing something wrong.

“Women will never have equal opportunities in the workplace until we make sure that we are also treating men as equal caregivers at home,” Levs says. Under the status quo, our laws, policies, and stigmas push women into the home, and keep men in the workplace, he says. The result is troubling workplace gender ratios that are all but impossible to dismantle.

We know these kinds of requirements work because they’re effective elsewhere. In countries such as Finland, Norway, Sweden, and Germany, both parents are legally mandated to take some time off after a child is born, with no apparent hit to companies’ bottom lines. But in the US, where family leave is not guaranteed by federal law, the responsibility falls to companies to create policies that bring with them cultural change. A few US-based companies, including the analytics firm Humanyze, have instituted mandatory parental leave policies. In a Quartz op-ed, Humanyze CEO Ben Waber explained: “All paternity leave is mandatory. Fathers don’t have to take off all of the time in one chunk, but they do have to take off the full leave within one year.”

His approach is laudatory—but rare. Companies’ leadership often thinks of family leave as being costly—especially in the world of banking, where time and money often go hand-in-hand. But in the long run, Levs says, not supporting new parents can actually cost companies more. Fathers he interviewed over the course of reporting his book, he says, chose to leave firms they felt did not support them as parents or give them the time they needed with their families.

“Businesses go through all the expenses of headhunting and picking someone new when they could have held onto that guy, by encouraging him to actually have that kind of work-life balance,” Levs notes. The cost of finding and eventually hiring a great replacement might cost 200% of a worker’s annual salary—much, much more than the price of making sure new dads take a few weeks off.

It’s a compelling argument—if Wall Street’s CEOs aren’t already won over by the seductive call of doing the right thing.

This story is part of How We’ll Win in 2019, a year-long exploration of the fight for gender equality. Read more stories here.