The Family Friendly Factor

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In the light of today’s rapidly changing, globalized economy and the pressure it puts on organizations to recruit and retain human capital, employee satisfaction has become a prerequisite for organizational success. An organization’s benefit system can play an essential role in this aspect. Taking into consideration that paid parental leaves are being offered by the majority of countries worldwide, while the United States is the only industrialized nation that does not offer paid parental leave to working parents, this study compared the influence of paid parental leave (PPL) on employee benefit satisfaction and its effects on job satisfaction and turnover intentions in the United States and Germany. It presents research undertaken on two sample groups of 108 part-time and full-time employees of childbearing age (n = 54 United States, n = 54 Germany). The central finding of this study is that employees with access to PPL have significantly higher levels of benefit and job satisfaction. While results showed no significant difference between German and American participants in benefit satisfaction, job satisfaction and turnover intentions, they revealed that employees with high levels of benefit satisfaction scored significantly higher on the job satisfaction scale and showed significantly lower turnover intentions. Results from a mediation analysis using the PROCESS Macro for SPSS, indicated that benefit satisfaction mediates the relationship between job satisfaction and turnover intentions. Practical implications of this study apply to HR practices regarding organizational benefit systems and family friendly policies. By providing PPL to the changing workforce, organizations can increase their employees’ benefit satisfaction, which in turn can help to improve job satisfaction and reduce turnover rates. Therefore, PPL presents itself not only as an effective way for companies to promote the commitment and loyalty of their employees but also as a strategic business advantage in the competition for human capital.