MOM Updates Parental Leave Package: How does this affect you and your company?

By Lim Say Ping

Leave benefits for new parents in Singapore have improved drastically from several years ago when companies only provided the minimum amount of paid maternity leave with none for fathers as stipulated by policies from MOM. Back then as compared to countries like the USA where there were no national policies that provided paid leave for new parents, Singapore was already considered pro-family in its leave policies. However, in recent years, European countries have begun to implement much more pro-family policies in the belief it will help the employees and help to solve the national problem of low birth rate. Being in the same spot, Singapore’s government has also changed policy over the years to provide better leave benefits for new parents such as childcare leave, extended maternity leave, and the latest 2-week, mandatory parental leave package, paternal leave that will be effective from 1 January 2017.

To summarize it, the three main reasons for the changes are that:

1. It is one of the many pro-family parental leave package policies designed to encourage married couples to start families and solve the national problem of low birth rate, which if not remedied, could impact Singapore’s future negatively.

2. Funding and making some of the parental leave compulsory, will ensure companies are aligned to this national policy and lessen the financial burden of the companies.

3. The policy serves as a reference point for the minimum benefits employees should receive and companies are encouraged to improve on them to attract and retain talents with leave benefits. I.e. the government has set a benchmark and we should expect to see more parental leave programs in the future.

 

With the number of evolving government-mandated leave policies set to continue increasing soon, it is vital that companies have a robust HRMS with good Human Resource information (HRi) and an integrated leave management system and payroll system to manage these changes easily. Additionally, these systems must be flexible enough to not only manage present policies but also accommodate future changes. Lastly, with the increase in parental leave packages, companies may need to allow for more flexible working arrangements such as telecommuting i.e. working from home or anywhere. Besides ensuring that the IT infrastructure of your company is secure and configurable, it also falls upon the HR department to put in place a robust HR process and policy that is supported by an integrated and secure HRMS and Talent Management System.

What about the impact on the companies that are to implement these policies?

Some of the challenges and possible solutions are: Especially with SMEs that have fewer resources, HR expertise, and processes to manage the increased number of compulsory leaves, the challenge is not only about the financial burden which is already partly assisted by government funding, but more importantly the lack of competent manpower to “stand-in” during the period that staff is absent. It is likely that the stand-in staff does not have the adequate competencies and knowledge of the job that he/she is doing.

In this case, some possible solution that requires planning and investments are:

• Engaging a consultant to detail the job specification and work processes
• Ensuring that there is a “backup” or “succession plan” for each of the job roles in the company.
• Implementing an HR process with a clearly documented policy and supporting it with a robust, flexible, and easy-to-use leave management system and integrated HRMS as well as business systems e.g. sales, inventory, ERP, etc.

There are government-funded programs that provide grants and access to consultants that can implement most of the suggested steps with the exception of a robust and satisfactory manpower backup plan. However, SMEs should be open to working with manpower agencies to hire part-time staff or use job portals to source for freelance workers. To optimize these external resources, the above-mentioned business processes and information systems will be necessary.

While the issues facing smaller SMEs are also applicable to larger SMEs or MNCs, their impact is not as big on the ground level as larger companies typically have more resources to implement the mentioned solutions. However, they still face the big challenge of finding backup staff or implementing an adept succession plan that will ensure business continuity. Thus, there is a vital need to implement a rigorous talent management plan to ensure that the succession planning and learning management plan will go a long way. Also, with younger talents placing a heavier emphasis on company benefits, companies are looking to further improve on the present government parental policy as a tool to attract and retain these staff.

However, the top management must decide if this will work for them in the long run. This can be a form of expense or investment for the company’s workforce, depending on how the management team views it. If the management team gives the go-ahead, the company’s HR processes and information system will have to be rolled out to support the parental leave package program effectively. This will improve the productivity of the HR department and enhance the credibility of the program.

The characteristics of the necessary HR programs and information systems such as leave management software are:

• Clear and easy to understand.
• Easy to apply and tracked by the HR department without much hassle such as parental leave package.
• Flexible and easily configurable to meet evolving changes.
• Integrated with overall HR process and HRMS and talent management system.

In summary, we should expect to see more changes in parental leave packages, and employee benefits, especially for new parents. To support these changes, strong HR processes and a good integrated HRMS should be in place to manage the constant changes.

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