Why the Netflix parental leave policy is more than a smart HR move

Netflix made the news on Tuesday when the company said it would provide unlimited paid parental leave for all of its 2,400+ employees. The announcement was made on the company’s blog, where they said they reached the decision after noticing that employees do better at work when they’re not worried about what’s happening at home.

The Netflix parental leave policy allows new parents up to one year of paid leave, more than any other company in the U.S., including Google, Facebook, LinkedIn, and Apple. But the announcement from Netflix is more than just a Silicon Valley power play: It’s a strategic change in HR policy that positions the company to attract top talent, to evolve their business in an increasingly competitive streaming content market, and to potentially ignite a movement towards more family-friendly policies nationwide. Currently, the U.S. is the only advanced country in the world that does not mandate paid maternity or paternity leave and only 12% of Americans have access to paid parental leave.

Smart HR moves aren’t new for Netflix. In 2009, the company made public its monumental culture deck, “Netflix Culture: Freedom and Responsibility.” The 124-page deck covers everything from core values to how the company hires–and fires–employees. The first version was written by founder Reed Hastings and former head of talent Patty McCord, but the deck is continuously updated as the business changes, providing key insight into how they run the $25 billion dollar business. The deck has become so influential in Silicon Valley and beyond that it has inspired other companies to write and share their own culture decks. It has even prompted businesses to examine the role company culture plays in attracting and retaining top talent, promoting employee success, and overall happiness.

The Netflix parental leave announcement will shape how other companies think about HR policies for new moms and dads (in fact, Microsoft just announced changes to their policy in response). And while not all organizations will be able to afford such generous policies, the move does expose the opportunity for all companies to leverage HR in a big way to support broader people goals and drive new company growth initiatives. One of those areas of growth for Netflix is in original content and programming for children, an effort made possible through a partnership with DreamWorks to produce over 300 hours of original children’s programming. With a new focus on creating valuable original content for kids, and now the announcement of a new parental leave policy, Netflix has made it known– they’re for families.

What Small Businesses Can Learn from Netflix

While we know not every business can afford to offer paid leave to new parents for a full year, we do believe all businesses can take away a few key lessons from the forward-thinking folks at Netflix:

People-centric policies matter. Building high-performing teams is what will help your company grow. But if your HR policies don’t center around and cater to the needs of your employees, your teams won’t find themselves performing well at all. No matter the size of your organization, put people first and design programs and policies for what’s most important to them.

Leverage values and vision to attract and retain top talent. Top talent is driven by more than just a paycheck. They want to join a company with strong values, a clear vision, and a roadmap for getting there. HR can play a key role in defining these culture ingredients and in engaging with employees for feedback as the organization grows.

HR can drive business goals in innovative ways. You don’t have to reinvent your HR policies to drive growth within your organization, but you should make sure HR has a seat at the decision-making table. HR professionals are often the eyes and ears of your workforce, and they can help engage employees around desired business outcomes and provide them with the tools to be effective in their jobs.

Empowering HR to Alter the Status Quo

We have no doubt that this paid parental leave announcement from Netflix will continue to have ripple effects in the coming days and months. For HR professionals, the Netflix story serves as an important reminder of how business leaders and professionals can come together to disrupt the status quo and deliver meaningful growth for their people and their business.