Canada (EN)
Under increasing pressure to rein in costs, some employers are doing the unthinkable—scaling back benefits. They began by eliminating wellness perks deemed excessive or underutilized and have now moved on to parental leave, PTO and other highly valued benefits, according to a recent Business Insider article that details how “even the most prized benefits are on the chopping block.”
Looking for ways to trim costs in challenging economic times is part of doing business, but employers should think twice before making cuts to benefits, as they may inadvertently be hindering their recruitment and retention efforts—and harming morale, productivity and engagement while they’re at it.
Granted, pay is always paramount, but employees aren’t shy about the role that benefits play in helping determine where they work.
According to the 2025 Alight Employee Mindset Study:
- 12% of people who changed jobs in the last 18 months say they left their employer due to better benefits as the primary reason, an increase from 6% the previous year. (Only trails better pay and tied with work-life flexibility)
- Among those thinking about leaving, 11% say better benefits would the primary reason to jump ship, up from 7% the previous year.
- 52% of employees agree that their current wellbeing benefits program are a key reason for joining or staying with the company.
Teasing out the “trend”
Seeing companies make cuts to parental leave and PTO is concerning due to the wealth of research on how time away from work enhances productivity, morale and team dynamics. It’s also been shown to improve mental wellbeing and physical health, reduce job-related burnout and boost emotional resilience. What’s more, 60% of U.S.-based workers wish they had more PTO.
While it’s alarming to hear about employers making reductions to PTO and leave benefits, it’s worth noting that some of these companies’ current PTO and leave offerings are generous, particularly when it comes to parental leave. Six months off to spend with a new child is ideal for many parents, but it’s not the norm. Paring that back to four-and-a-half months is still above average. In other words, such reductions may not be the bellwether that the Business Insider article implies. It may be about trimming costs. but still maintaining the essence of the benefit for workers.
What is concerning, however, is the assertion that one employer is trimming parental leave and other offerings for select workers, specifically those in support roles, such as administrative services, information technology and finance. The company also plans to pare back or eliminate annual PTO, a pension plan and IVF funding for some of those individuals. This is essentially saying that certain classifications of workers aren’t as highly valued by the organization and, thus, aren’t worthy of the same benefits. It creates an “us versus them” mentality and, frankly, sets a dangerous precedent. It also says something about the company's culture and commitment—or lack thereof—to its people.
Assessing the impact
With the exception of medical, dental and vacation days, no benefit is relevant to all employees. This may lead an employer to mistakenly believe something like parental leave or IVF coverage isn’t a must-have because it only applies to a small portion of the population. However, such benefits have an outsized impact because they are highly valued by the people they’re relevant to.
According to 2025 Mindset data, parental support is valued by 84% of employees who have used it, while fertility planning and family building benefits are valued by 76% of those who used them. Interestingly, among all employees, those benefits are valued by 62% and 57%, respectively—an indication that they appreciate their employer helping their colleagues in ways that don’t apply to them personally because it shows the company’s commitment to its people.
The article’s assertion that a few large companies making cuts to their benefits programs will “legitimize” that action for everyone else is concerning. Again, most employers don’t offer six months of parental leave, so making this out to be a trend runs the risk of convincing other employers to reduce the amount they provide to something that's less than sufficient. And with Mindset data showing that Millennials are more likely to leave their employer for better benefits (15% of Millennials, compared to 10% of Gen Z, 6% of Gen Xers and 5% of Boomers), companies may be in danger of losing key talent if they make cuts to benefits that are most likely to be used by workers of that generation.
Before an employer starts scaling back highly valued benefits offerings, they should do the math on what's the investment versus what's the payoff. Is it worth it to risk a talent migration? Is it worth making certain workers feel less valued? Is it worth it to risk the hit to your culture or losing a treasured spot on the Great Place to Work® list or the Best Workplaces for Parents™ list? Even worse, is it worth it to create a workplace where people may cling to their jobs for now, but are disengaged, unproductive and looking to jump ship as soon as the opportunity presents itself? These are definitely questions worth asking.
