Microsoft shows the way with paid-parental leave for subcontractors

The Visitor’s Center at Microsoft Headquarters campus is pictured July 17, 2014 in Redmond, Washington. (Stephen Brashear/Getty Images)

In 20 years of business I’ve lost count of how many days, weekends, public holidays and even a couple of Boxing Days that I’ve spent or wasted on arduous, bureaucratic procurement exercises jumping through hoops to show a company that we can do the job for them and meet their often oddball standards for suppliers.

The vast majority of these are mind-numbingly boring and there’s something odd about the procurement industry that it always seems to use the most god-awful technology and systems. Countless times I’ve spent trying to give a detailed answer to a complex question whilst typing into a tiny letterbox on screen in a system that crashes every 5 minutes and has no auto-save. If you’re in B2B sales you’ll know exactly what I mean.

Procurement acting as a strategic ally to HR? Whatever next?

But last week, Microsoft did something pretty great with their procurement policy. They announced that they will soon mandate all suppliers and contractors to provide at least 12 weeks of paid time off to new parents. It’s the first time I’ve ever heard of a company imposing a universal benefits requirement onto their suppliers and, given the shocking state of parental leave in the USA, it’s one that is very welcome.

Europeans reading this will be perplexed so I need to explain.

The United States is the only country in the developed world that does not require employers to provide paid leave for new mothers.  Yes, that’s right – in America, the richest country in the world, mothers are entitled to absolutely zero paid maternity leave. In fact, it was only 25 years ago, that Bill Clinton signed the Family & Medical Leave Act which gave eligible workers 12 weeks of unpaid leave for a new child – yes unpaid. Until then, somehow, the law had no minimum requirement for leave at all.

The US has been alone with this shocking lack of support for new mothers for some time. Over the border, in Canada, mothers get a year of paid leave, here in Europe numbers range from the most generous Finland, with 3 years to 91 weeks in Norway, 52 weeks in Denmark and 39 weeks in the UK.

Few companies in the USA do more than the legally required – nothing

Of course companies in the USA can choose to provide paid leave but few do. According to the Bureau of Labor Statistics, only 13 per cent of the US workforce has access to paid family leave through their employer

Microsoft’s new paid leave mandate will affect suppliers who have more than 50 staff and covers workers who are on “substantial” assignments with Microsoft. The company said the change will improve lives for thousands of workers and the company’s general counsel Dev Stahlkopf said :

“We understand this may increase our costs, and we think that’s well worth the price.”

The move by Microsoft is particularly important because IT companies often outsource work to smaller subcontractors. In the race to bid the lowest price and win these contracts, staff benefits can often be cut or eliminated creating a really sharp two-tier culture where people work side by side but company-paid employees are treated much better than subcontractors.

Silicon Valley giant Facebook also created a minimum wage of $15 per hour for staff working for its contractors back in 2015 and also forced those firms to provide at least 15 paid days off and a $4,000 new-child benefit for parents who didn’t already receive paid parental leave.

Pay & Benefits have a key supporting role in employee engagement

When I developed the Engagement Bridge model, I deliberately put Pay & Benefits at the bottom – shoring up the bridge but not crossing the divide between the company and the individual. That was to show that you can’t engage your staff with Pay & Benefits alone, but that they are a critical underpinning factor – the absence of them can make employee engagement impossible.

In a world which is rapidly changing, where we need all of our people on-side so our organisations grow and thrive, it’s critical that do everything we can to create environments where people can do and want to do their best work

For some organisations, there are some real basics that still need to be put in place and Microsoft has shown us that the procurement department could actually be an unexpected ally in that plan.

Glenn Elliott is a technology entrepreneurinvestor and advisor, MBA drop-out and recovering CEO with 20 years of experience. His bestselling book Build it: The Rebel Playbook for Employee Engagement is published by Wiley. He writes about people, culture, leadership, technology and the future of work weekly at www.glennelliott.me. 

About Glenn Elliott

Glenn Elliott is an entrepreneur, former CEO at Reward Gateway and speaker and author on employee engagement, company culture and leadership. His bestselling book, Build it : The Rebel Playbook for Employee Engagement is available at all bookstores and as a download on Kindle and iBooks. You can download two chapters free at www.rebelplaybook.com

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  1. Glenn – I really laughed at your opening two paragraphs. In some ways a digressive rant from the main thrust of the article, it is also so completely true! Both about the bizarre requirements and hoops to hump through, and also the crap portal systems that seem to be ubiquitous.

    Actually, having been on both sides of the procurement process, one of the things that bugs me most is the typical lack of a quality threshold. So someone can score over 90% on quality, but someone coming in on cheapest price but, say, 50% on quality can win the day. I often wonder why companies and public sector organisations are happy with processes that more or less guarantee they won’t actually get what they want?

    That’s my digressive rant – I think Microsoft’s initiative is in principle excellent. Making it a requirement for all makes it a level playing field. In theory…. But we all know that part of bidding for projects is a paper exercise in generating policies. How will Microsoft check up and enforce this?

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