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Swedish automaker Volvo Cars is increasing paid parental leave for employees worldwide regardless of gender to 24 weeks, the company said on Tuesday.
Employees – both hourly and clerks – who have been with the automaker for at least a year are eligible for the new “Family Bond” program, the company said.
It includes those who become parents through childbirth, adoption, constant care, and surrogacy. Unborn parents in same-sex couples are also eligible. The program goes into effect on Thursday, Volvo said.
By default, employees receive 80% of their base salary under the program. You can use the non-working time in the first three years of parenting a new child. According to Volvo, U.S. employees also have the option of 19 weeks of fully paid parental leave within 36 months of parenthood.
The new policy is designed to help the company attract and retain talent as it focuses on becoming a company Electric vehicle manufacturer by 2030According to Volvo CEO Hakan Samuelsson.
“We believe this will set a new standard in business,” he told CNBC. “We do this in order not to offer our employees any new, favorable benefits. We do this more because we believe that it is good for our company. We are becoming more attractive as an employer. There is competition for talent.”
Samuelsson said the company expects the new program to cost a “substantial sum” – likely in the “tens of millions”. He said that as long as it gives us better, more diverse management and a stronger brand, it will definitely be worth it.
According to the company, Volvo’s current program provides that six weeks of wages can be used in the first year of parenting.
Volvo’s new parental leave program is one of the most comprehensive in the automotive industry. For example, General Motors and Stellantis offer U.S. employees up to 12 weeks of paid family vacation for new parents Ford engine offers up to eight weeks. These are available to new mothers for an additional six to eight weeks under the Family and Sick Leave Act.
Volvo decided to launch the new parental leave program following positive results from a similar pilot program for thousands of its sales reps in Europe, said Samuelsson.
“What we do as a company is to live our values,” he said. “It will be good for our reputation anywhere.”