Spotify, a streaming service provider with about 1,400 employees, just announced that it’s giving employees a considerable new perk:

Effective immediately:

  • All full-time Spotify employees will be offered up to six months’ parental leave with 100% pay.
  • Parents will be able to take their leave up to the child’s third birthday, with all Spotify employees who had children from the beginning of 2013 also eligible for the benefit.
  • Mothers and fathers are encouraged to take the full time off, with the added flexibility of splitting their leave into separate periods.
  • We also know that following a period of parental leave, the transition back to work can be tricky. So we’re including a one month ‘Welcome Back!’ programme, allowing returning team members to ease back into their job with the ability to work from home, on a part time schedule and with flexible hours. 

It’s great news for those employees that Spotify is creating this generous new benefit program, and it could encourage more of its competitors to follow suit. 

Just because this type of program works at some companies, however, doesn’t mean that it will work at all companies.  Those who argue that government should step in and require all companies to provide similarly generous leave packages—or that government should directly provide a paid leave entitlement benefits—ignore how these programs can burden smaller or staff-intensive businesses and backfire on some employees, particularly on women. It’s also worth considering how these leave programs look to those who are childless, but wish they could be parents.

Yet this is the free market at work and it’s wonderful for companies to offer a variety of compensation packages that will appeal to different types of workers.  Let’s keep government regulators out of this and let the competitive process do its work.