Mercer Survey Reveals Impact of New Parental Leave Benefits

Mercer Survey Reveals Impact of New Parental Leave Benefits

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Mercer Survey Reveals Impact of New Parental Leave Benefits on Singapore Companies

  • 25-April-2013
  • Singapore, Singapore
  • The majority of companies surveyed will be strictly adhering to the new Marriage and Parenthood Package.
  • Multinational companies are more likely to bear any increases in cost as a result of offering the same benefits to employees who are otherwise not entitled to benefits.

In January of this year, the Singapore government’s National Population and Talent Division (NPTD) announced exciting new additions to the Marriage and Parenthood (M&P) Package. The changes will come into effect on 1 May 2013. The most significant changes in the enhanced M&P Package are the provision of paid paternity leave, shared parental leave, and adoption leave as statutory benefits. In addition, maternity leave will be extended to part-time employees, on a pro rata basis. Other key changes include an extended maternity protection period, which protects a woman from dismissal or retrenchment without cause at any point during her pregnancy, and extended childcare leave provisions. A monetary cap applies to all new and amended provisions. 

In the light of the NPTD’s announcement, Mercer conducted a survey of 223 Singapore businesses across multiple industries in order to gauge how companies intend to change their policies and practices as they relate to the new statutory requirements. Overall, the survey results revealed that firms are likely to strictly adhere to the new requirements regarding paternity, shared parental, and adoption leave, and will make the necessary changes to their existing benefits by or before the 1 May deadline. Some organizations, including the civil service, statutory boards, and government-linked corporations (GLCs), have already implemented the necessary changes, following the January announcement.

Paternity leave

As of 1 May, all Singaporean male employees (including those who are self-employed) will be entitled to one week of government-paid paternity leave, to be taken within 16 weeks of the birth of the child. Among other eligibility criteria, the child must be a Singaporean citizen and its parents must be legally married. Companies can also offer employees the more flexible option of taking paternity leave within 12 months of the birth.

Although this was not a statutory benefit prior to the legislative changes, many companies already offered paternity leave as a supplementary benefit. Our survey found that 57% of respondents plan to simply adhere to the statutory requirement and keep non-eligible male employees on their company’s current scheme, whereas 27% intend to offer one week’s paternity leave to all male employees, with the company bearing the additional costs. A small number of respondents (6%) will make no change to their existing policy, as it already meets the new requirements, while 2% of respondents plan on being more generous and offering a week’s leave in addition to current provisions. Of companies planning on extending this benefit to all male employees, most are in the banking (51%), FMCG (35%), and pharmaceutical (30%) industries. Of those planning on adhering to the statutory requirement only, most are in the hi-tech (71%), real estate (67%), and chemical (60%) industries.

“In the context of slower economic growth in the Singapore market, employers are increasingly looking into utilizing benefits strategically to best attract and retain employees in a sustainable, cost-efficient manner. This is spurring them into plenty of innovative ways to get the best value for their money,” said Harrison Tan, Asia Benefits Product Manager, Information Services at Mercer.

Multinational corporations are more likely to extend the new paternity leave benefits to employees who do not fulfill the statutory requirements, when compared to GLCs or local companies. In some cases, this is because their existing policies are equal to or more generous than the newly enacted statutory requirements.

Although a number of companies surveyed (18%) elected to implement the paternity leave benefit from 1 January 2013, the vast majority (72%) will wait until the 1 May deadline. 

Shared parental leave

Under the M&P Package changes, eligible male employees will be entitled to share one week of the government-paid 16 weeks’ maternity leave, subject to the agreement of the mother, who must be eligible for maternity leave. The shared parental leave is to be taken as one continuous block within 12 months of the birth. As with the paternity leave benefit, the child must be a Singaporean citizen and the father must be legally married to the mother. 

Companies can elect to offer this leave more flexibly, allowing the father to take the leave a few days at a time, rather than in a one-week block. Our survey revealed that 40% of respondents plan to offer this flexibility, especially companies in the transportation and logistics (56%), pharmaceutical (47%), and real estate (45%) industries. The civil service, statutory boards, and GLCs are taking the lead in granting such flexibility. Forty-two percent of firms surveyed are undecided but have not ruled out the option of offering this benefit flexibly. 

Although a number of companies surveyed (18%) elected to implement the shared parental leave benefit from 1 January 2013, the vast majority (73%) will wait until the 1 May deadline.

Adoption leave

Adoption leave is a new addition to the M&P Package, and our survey revealed that this benefit has not commonly been offered to employees on a supplementary basis. Under this new provision, adoptive mothers can start their four weeks of government-paid adoption leave from the date of Court Application (the “formal intent to adopt”) or the issuance of in-principle approval for a Dependant’s Pass (for the adoption of a foreign child). The leave must be taken before the child’s first birthday. Among other eligibility criteria, the adoptive mother must be legally married and if the child is not from Singapore, at least one parent must be a Singaporean citizen.

Although a number of companies surveyed (17%) elected to implement the adoption leave benefit from 1 January 2013, the vast majority (73%) will wait until the 1 May deadline.

Mercer BenefitsMonitor

Mercer will continue to collect information on companies’ new parental leave policy. This information will be available via Mercer BenefitsMonitor. Mercer BenefitsMonitor is the leading platform for benefits information. It is an interactive and user-centered online tool that offers a wide range of flexible and intuitive features for benefits reporting and analysis — excellent for comparing your benefits data against your competitors.

 

About Mercer
Mercer is a global consulting leader in talent, health, retirement, and investments. Mercer helps clients around the world advance the health, wealth, and performance of their most vital asset — their people. Mercer's more than 20,000 employees are based in 42 countries, and the firm operates in over 130 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy, and human capital. With 53,000 employees worldwide and annual revenue exceeding $10 billion, Marsh & McLennan Companies is also the parent company of Marsh, a global leader in insurance broking and risk management; Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a global leader in management consulting. For more information, visit www.mercer.com. Follow Mercer on Twitter @MercerInsights.

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