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Adoption Benefits Find a Home in Corporate America

January 8, 2008
Related Topics: Benefit Design and Communication, Corporate Culture, Work/Life Balance, Featured Article, Compensation
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As a 5-year-old orphan in her native Poland, Paulina Palmer was adopted by a couple who were unable to conceive. At the time, "Polish attitudes about adoption were very negative," she recalls. "I had a lot to overcome when I was growing up."

Even so, after she immigrated to the U.S., started a career and married, she and her husband Jim chose to become adoptive parents as well.

"I’d been exposed to radiation from the Chernobyl accident, so I felt like my body was a question mark," explains the 29-year-old Palmer, who works in the San Antonio office of Avnet, a Phoenix-based distributor of computer components. But in contrast to the bias against adoption that Palmer recalled from her youth, her employer seemed eager to help.

Avnet offered a stipend of up to $3,500 to cover adoption-related expenses, plus two weeks of paid leave for new adoptive parents. When the couple adopted two sisters, 8-year-old Jasmine and 10-year-old Kylie, from foster care, Palmer’s boss even took the new family to lunch to celebrate.

"Getting that kind of support makes a big difference," Palmer says. While the medical bills from childbirth have long been covered by corporate health plans, it wasn’t long ago that employees who chose to adopt children were pretty much on their own in terms of coping with the cost. But today, companies such as Avnet are rapidly becoming the rule rather than the exception. According to Hewitt Associates, 45 percent of major U.S. companies now offer some type of assistance to adoptive parents, up from 12 percent in 1990.

Ceridian, a Minneapolis-based HR outsourcing provider, had three times the number of adoption-related calls in the first half of 2007 than it did in the first half of the previous year, according to product manager Jennifer Piliero. Ceridian links parents with adoption support groups and provides other assistance during the adoption process.

The value of adoption benefits packages continues to vary tremendously from company to company, but experts say the general trend is for businesses to increase financial stipends and allow more paid leave time. Beyond that, some companies are adding new types of benefits, such as additional financial incentives to adopt foster children and in-house support systems for adoptive parents.

Adoption advocates say that the benefits are a bargain for employers, because they promote the image of a family-friendly organization to employees and potential hires, despite the fact that they tend to have a much lower utilization rate than other benefits. Best of all, with a minimal amount of effort, a company can quickly develop and deploy a self-financed benefits package that’s appropriate for its size, with the help of benchmark data and other expertise that’s available for free from adoption advocates. For companies, adoption benefits are a way to keep pace with changes in the composition of the American family.

"Nearly 50 percent of Americans either have adopted or have family or close friends who have," explains Rita Soronen, executive director of the Dave Thomas Foundation for Adoption, an organization created by the late founder of the Wendy’s restaurant chain.

"Adoption no longer is cloaked in secrecy. Instead, a growing number of people have a positive view of adoption, and companies are trying to respond to that." A recent Harris Interactive poll commissioned by the foundation found that 95 percent of Americans believe that employers should offer adoption benefits.

According the foundation’s 2007 survey of 762 companies, the actual benefits vary widely, from a $500 stipend for adoption expenses and one week of paid leave to a reimbursement of $20,960—which would cover most of the cost of a typical international adoption—and 16 weeks off with pay. The average benefit is a reimbursement of up to $4,700—up from $2,500 five years ago—and five weeks of paid leave.

Soronen expects to see the number of companies offering adoption benefits continue to rise by 3 percent to 5 percent a year for the foreseeable future. In addition, she notes that companies are now expanding their programs to offer more benefits. Wendy’s, for example, offers an additional stipend of up to $2,000 to employees who choose to adopt children from the nation’s overburdened foster care system. (Those children tend to be older—the average age is 9—and often are part of sibling groups or suffer from disabilities, which deters some prospective adoptive parents.)

The latest trend is for employers to provide not just benefits, but support systems for adoptive parents, Soronen says. She cites magazine and book publisher McGraw-Hill, which provides a comprehensive manual on adoption to interested employees. Other employers sponsor in-house forums for adoptive parents. "Sometimes the hardest thing for adoptive parents is to find support systems," Soronen explains. "Adoption agencies are overstretched, so they don’t always do the best job of supporting adoptive families after they have their children. This is an area where an employer can step in and do the job, pulling together people in the company with adoption experience and offering a resource network."

Julie Fink, Avnet’s vice president for compensation and benefits, says that providing adoption benefits is a matter of basic fairness.

"We’re a very family-friendly company, and we take pride in that," says Fink, who herself is the parent of two adopted children. "On the benefits side, we pay for couples to have fertility treatments, so why not help them with the cost of adding a child to the family through adoption?"

Since Fink joined the company three and a half years ago, Avnet has increased its adoption stipend from $2,000 to $3,500, and in the next year or so she hopes to up it again to $5,000. "That’s in recognition that more and more people are turning to international adoptions, which are more expensive," she explains.

The Dave Thomas Foundation for Adoption provides free assistance to companies who want to set up adoption benefit plans, including benchmarks for organizations of all sizes.

"We can step in and help a company work out policies and implementation," Soronen says. "We also can connect them with other companies who can tell them, ‘Here’s what we did, here are the issues we had to explain to top managers,’ and so on. Nobody needs to feel as if they have to start from scratch."

Though some employers simply provide a fixed cash grant to adoptive parents, most, including Avnet, offer instead to reimburse them for itemized costs. Avnet’s program, for example, covers translation fees for international adoption documents, immigration fees, the cost of required immunizations, and medical expenses for the biological mother of the child. In addition, Avnet enables adoptive parents to enter their new children into the company health plan immediately, with no limitations for pre-existing conditions.

Unlike the medical expenses for childbirth, which are covered by an insurer, a company must self-finance 100 percent of adoption benefits. Even so, Fink says the benefit is easily affordable, because it is not as heavily utilized as medical coverage for childbirth or fertility. (According to the Dave Thomas Foundation, typically only about one-half of 1 percent of corporate employees use the benefit.)

"I don’t have the statistics to back it up, but my feeling is that the return on this benefit is substantially greater than the cash outlay," Fink says. "Even if the reimbursement only covers a portion of adoption expenses, people can use every penny of it. And they appreciate the recognition that these days, families can be created in different ways than in the past. That helps create employee good will and job satisfaction.

"Employees who use it tend to tell people about it, both inside and outside the company, so the effect is magnified," she says. "It’s not just for the people who actually utilize the benefit, but for all 6,000 employees who hear about it and say, ‘What a great thing to provide for families who need it.’ And I definitely think it makes us more competitive in recruiting."

If potential employees are considering adoption, knowing about the benefit may help sway them to choose Avnet as an employer, she says. "But even if they aren’t, it gets across the message that we embrace diversity and that we’re good corporate citizens."

Avnet actually tries to encourage more employees to utilize the benefit by communicating about it in a variety of ways, including the company intranet. Paulina Palmer recalls that she first learned about it during an onboarding seminar.

"It definitely piqued my interest when they mentioned adoption benefits," she says. "We’d already been looking into adoption, but it helped me to see that we were finally in the right place at the right time."

Palmer says she and her family also benefited from Avnet’s work flexibility policies, which enabled her to spend more time getting her new children settled into a routine. "I could leave early to pick up my kids from school, and then finish my work at home late at night, after they were in bed. The opportunity to do that absolutely raised my job satisfaction and increased my loyalty to the company."

Meanwhile, Fink is trying to figure out how to add benefits for foster parents as well. "They get a subsidy from the state or the city, but we all know that doesn’t cover the cost of raising children," she says. "I don’t know how we actually could make it happen yet, but there might be something we could do. After all, there are a lot of children out there who need a good home."

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