How Parental Leave Changed at Netflix

Netflix’s employees used to have unlimited parental leave during their newborn’s first year.

It did not work out quite as they expected.

The Netflix Policy

In the beginning, Netflix proclaimed a “no rules” ethos. As a philosophy, it reflected the firm’s faith that a “freedom and responsibility” environment attracted and retained the best talent. From business class flying to five-star dining, the expense was okay if it boosted output. So too was an unusually long home stay for new parents.

However, as it rapidly grew, Netflix discovered that what worked for several hundred employees no longer was ideal for 13,000:

After subscriber growth and the stock price tanked during the first half of 2022, Netflix recalibrated. Like me, you might recall the new limits on password sharing. Inside the firm too, they targeted the bottom line. In 2015, they said a year’s parental leave was okay. Now it is not.

Netflix has just become more normal.

OECD Statistics

Comparing moms and dads, for women, the OECD average is 18.6 weeks and the EU is 21.3 while for their partners, the OECD is 2.5 and the EU, 3.2.

The following graphic for paid parental leave displays the gender gap:

And these are the numbers:

However, the U.S. statistics are slightly misleading. Nationally, The Family and Medical Leave Act of 1993 mandates that companies with 50 or more employees offer 12 weeks of unpaid leave to parents of newborn or newly adopted children. But, like Netflix, policies vary among individual companies. In a list of “The Best Workplaces For Parents,” on average, big firms offer 15 weeks of paid maternity leave and 12 weeks for new dads.

Our Bottom Line: Social Norms

Defined as predictable or appropriate behavior, a social norm can shape how we act.  At Netflix, the parental leave norm was based on a memo that, until last spring, articulated a culture of “freedom and responsibility.” Now, though those words are gone. And, with some year-long leave takers telling WSJ that they had been laid off, the norm also has disappeared. But according to a company executive, they are just placing less emphasis on freedom and more on responsibility.

Recalling OECD statistics on maternity and paternity leaves, Netflix seems to be reverting to the more widespread social norm they had previously sidestepped.

My sources and more: Thanks to WSJ here and here, for reminding me it was time to update our look at parental leave. Next, for the data, these websites, here and here are possibilities. Then, as the last step, this paper on social norms completes the picture.

Please note that several of today’s sentences were in a previous econlife post.