14 Frugal Moves to a Great Paid-Leave Policy

06/06/2016 10:21 am ET Updated Dec 06, 2017

You want to take care of your great employees when they start a family and other life events. How can you create a competitive paid-leave policy while staying within your tight budget?

A. Remember the Cost Is Worth It

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The current United States mandated maternity leave policy is 12 weeks of unpaid leave for mothers of newborn babies. This is significantly less than most other countries in the world in terms of benefits and compensation. Creating a paid-leave policy will be expensive, but if done right, it should pay off in terms of being able to hire and retain the best employees for your company. - Mattan Griffel, One Month

A. Be Smart About Budgeting

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The simple answer is budgeting. Set aside a designated amount in the event that an employee will need to take leave due to a major life event. When and if this budget is needed, you won't have to scramble around because you planned for it. - Travis Smith, V.I.P. Waste Services, LLC

A. Set Qualification Parameters

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Your business will succeed or fail based on your team. Period. It's worth having policies that let your employees know they're valued. To keep from breaking the bank, set parameters like time of service (e.g. 12 months to quality) and contingency planning before qualifying for the benefit (e.g. employees must train a temp or another employee before their leave). - Brittany Hodak, ZinePak

A. Know Your Employees

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Know your employees' expectations and manage them according to where your company is. If your employees know that they work in a startup at a relatively early stage, they don't normally expect that they will have the same perks as those offered by a multi-billion company. A young startup just doesn't have the means to provide such benefits, but, as you grow, your policy should develop accordingly. - Ivan Tsybaev, Trucker Path, Inc

A. Have a Short- and Long-Term Disability Policy

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Most short-term disability policies cover maternity leave for mothers (but not for fathers). The company can invest in a good short- and long-term disability policy to cover life events. If the company is large enough, you can get decent benefits to cover leave. Also, have a flexible policy that allows for time off for emergencies, remote work and unpaid time off for longer periods of time, if needed. - Peter Boyd, PaperStreet Web Design

A. Find a Remote Work Balance

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For employees requiring extended leave, I've found this is best managed by allocating tiers of leave and tying them to compensation. For instance, for the first month of leave, they receive 100 percent of their salary, 75 percent for the second month, 50 percent for the third month, and, after, they begin to work remotely for a number of hours until they progressively scale back to full-time. - Nick Eubanks, I'm From The Future

A. Reward Time In Instead of Punishing Time Off

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We used to be fairly rigid about our personal and sick leave policies. We had a calculator which gave us specific days, down to the hour, a particular employee had as part of their paid time off schedule. The reality is, none of that really matters. A truly dedicated, loyal employee will put the time in when they're at the office (or at their desks at home), which makes the time off arbitrary. - Blair Thomas, First American Merchant

A. Create a Progressive Employee-Share Program

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Take a radical approach by instituting an employee-share program. During each pay period, take a few dollars from each employee who opts in and places the money in a high-interest account. Create a policy that dictates the parental and family leave for which the fund will be used. Be sure to consider federal and state regulations like FMLA so your company policy works in accordance with the law. - Nicole Munoz, Start Ranking Now

A. Work With Employees on Their Specific Needs

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Everyone is different, which is what makes a policy difficult to devise. While one person may need a week, others may require a few months. Partner with each employee on offering a standardized policy that fits your company's budget. From there, you may be able to work out some type of compromise related to time, office hours and projects to ensure they can attend to their personal lives. - Cynthia Johnson, American Addiction Centers

A. Get Outsourced Help

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It's always hard to be short a team member, but you can manage in their absence by outsourcing some of their work. These can be simple tasks that are easily trainable. Ask your team member to train a freelancer or virtual assistant to take care of core tasks during the parental leave. Since you'll be paying per hour or project, it isn't as expensive as hiring a full-time employee to take over. - Jared Brown, Hubstaff

A. Watch Out for Legal Landmines

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While it's nice to be lenient, if you have less than 50 employees, you should outline the parameters in your handbook so everyone is treated fairly under clear standards. Giving more flexibility to your best employees while treating others differently is legally problematic. Understand that there is no "part-time" for an exempt employee. Even an hour of work counts for the entire day or half day. - Wei-Shin Lai, M.D., AcousticSheep LLC

A. Give Unlimited Vacation

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Our team at SEE Forge has unlimited vacation and does not track hours, days off, sick days, etc. We believe if people are passionate at what they do, they'll want to be part of the team and contribute their share. Life happens and everyone needs a break, gets sick, gets married or has a friend or family member pass away. Hire passionate people and let life happen. - James McDonough, SEE Forge creators of FAT FINGER

A. Study Your Competition and Give a Better Offer

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Too much time away from family, especially newborns, is the most tangible and memorable indicator of an unsustainable work-life balance for employees. So, the real cost facing employers is that of losing talent to competitors or raising salaries to compensate them for sacrificing invaluable family time. Study your competition, and then give a better offer. Free time is cheap compared to the risks. - Manpreet Singh, TalkLocal

A. Balance People and Company Needs

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Everyone went "wow" over Netflix's parental leave policy, but not everyone has that kind of budget to support such an admirable benefit. Instead, it's important to balance what your talent needs to take care and enjoy their personal lives without compromising the company's needs. Find ways to keep everyone happy with more flexible work schedules that allow more work-from-home time. - Angela Ruth, eCash

These answers are provided by the Young Entrepreneur Council (YEC), an invite-only organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.