The Lost Startup Benefit: Paid Maternity Leave

The Lost Startup Benefit: Paid Maternity Leave

paid maternity leave in startups study

In 2013 at Thunder (we were called PaperG at the time), one of our employees decided to get pregnant. This was a first for the company, so in addition to being excited for her, we found ourselves putting into place our own maternity leave policy for the first time.

We started by researching what other startups were providing their employees. Surprisingly we found no definitive guide or benchmark for startups, so we conducted our own survey to help create one.

For our research, we polled people from our network of startups—with little funding to post IPO—to see what types of policies were being implemented across startups at different stages.

The purpose of our survey was two-fold:

  • Learn how much paid maternity leave startups offer
  • Learn what stage of a startup’s life did offering paid maternity/paternity leave become common

Overall we found that despite the immense pool of benefits used to attract talent in the startup world—such as catered lunches, gym memberships, and unlimited vacation—paid maternity leave is sorely lacking in attention. Yet, the necessity of implementing maternity leave policies is more important than many startups may think.

What We Found About Paid Maternity Leave

From our research, we saw that not a single seed stage startup offered a paid maternity leave policy. The implementation of a policy became more common as funding stages grew. Some Series A, B and C startups were lacking policies. Maternity leave only became unanimous at the Series D stage of funding and post-IPO.

Given the loose adoption of paid maternity leave, we then polled 101 women working in tech and found 61% of women said they wouldn’t work for a startup or tech company that didn’t have a maternity policy. This suggests that all of the seed stage startups, and some of the Series A, B and C are potentially missing out on a huge portion of female tech talent.

We also found several other correlations:

  • The age of the startup related to the likelihood it had a paid maternity policy
  • A larger representation of females positively related to the likelihood of having paid maternity leave policy
  • In startups, there seems to be little to no relationship between stage of funding, and the amount of paid leave given

Could a paid maternity leave policy help startups attract more women? It seems so. Maybe it’s time for more startups to consider putting one in place.

If your startup or small business is in a similar situation and you want to set up your own program, here is a good resource on maternity leave laws and policies. As you can see from the above data, we encourage you to exceed the minimum requirements in your state.

The following deck gives you a look into the full results of our survey.

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UPDATE: Since conducting this survey, we’ve had a lot of team members grow their families—both men and women. One of us is even the father of twin girls! Every family situation is different. Sometimes medical issues arise that need extra attention. Having a policy in place, and some flexibility beyond it has enabled us to support each team member in whatever way has been needed.

Our research has been featured in an article in The Atlantic: Silicon Valley’s Best and Worst Jobs for New Moms (and Dads). This article takes the conversation to a new level of depth.

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