Tracksuit

Tracksuit was my first job after parental leave, and I was the first mother to join the team. They created the return-to-work policy for me, which was amazing. This meant I could have a very slow ramp-up. I started two days a week. I picked up three days and then four days. 

When negotiating salary, Connor recognised how hard it can be for people to return after having a baby. He offered to give me an extra half-day paid that I didn’t have to work. So when I worked two days, I was paid 2.5 days, which scaled up until I was full-time. This still exists as something we offer today.

Towards the end of 2022, we learned an employee would be going on parental leave: Connor. At that point, we decided to formalise a policy. Finalising it took a few months because we wanted to get it right. We initially offered four weeks of paid leave for either caregiver, which is what we could afford and rationalise at the time. We added some extra perks to that.

How did you land on four weeks? And how did you justify that? I can imagine that as an early-stage startup, you could argue that that money should be spent on direct revenue generation. 

There were a lot of parents on the team for a startup. And if they weren't parents, they were in that demographic who might want to become parents someday. That demographic extended to our customers as well. The marketing industry is female-heavy and relatively young.

Early on, I got advice from someone quite experienced that over-indexing on paid parental leave was a really good bet. We wanted to invest in the employer brand for the types of people we wanted to recruit, which feeds into our overall brand and perceptions. 

One of the reasons we decided to do it early was to retain those amazing, original people who had taken a huge risk (and usually a pay cut, too) and poured everything into creating this seedling of a company. The thought of losing these people down the track because they wanted to grow their families felt like such a waste. 

Landing on the four weeks was quite arbitrary back then. It felt like it was enough of a gesture we could afford that wasn’t insulting. We always had in the back of our minds that we wanted to do more as soon as we could. This was just the first step.

You mentioned there were a few extras with four weeks. What were they?

The gradual return to work that I had benefited from. I wouldn't have been able to join Tracksuit if they hadn’t offered this, and it felt different - I hadn’t seen many startups offering that extra half a day of pay. It was quite a hard thing to justify, but we did it. 

We also looked at what other startups were doing and included a month of paid meals. This is not that expensive—about $800 to $1,000—but it has quite a significant impact because people feel so supported.

What triggered the next change in your policy?

Knowing that we take quite a long time to develop our policies, we started working on the next iteration when we found out a Series A was coming down the pipeline. The new policy, which we worked on in tandem with the fundraising, took at least four months to create. 

That's very intentional. With all our policies, we do a lot of research and talk to a lot of people because it's so hard to put the toothpaste back in the tube. We don’t want to remove or roll back a policy because it's demoralising. We want to make sure the policy will scale as we grow. 

In startups, there's a mentality of “go fast and break things.” In your case, it sounds like you were deliberate in formulating not just this policy but all your policies. What process did you go through over that? Why did it take four months?

We have a philosophy of taking best practices, iterating on them, and making them ‘Tracksuity’. Looking at what other companies are doing is a good starting point if their values align with yours. But then you need to think through it and personalise it for the policy to land and stick. We have quite a specific way of doing things in a specific language and tone of voice.  

We were open with employees about reviewing our parental leave policy. Someone was going to need it, and I remember telling her, “If you have any questions or you're worried that this isn't written up yet, let's just address this.” 

It was important to stress test the new policy to ensure we could afford to maintain it as we grew.

How did you stress test it?

Airtree has a calculator, which we use as a starting point to figure out how many people might take it. We ran many of our ideas through the calculator and figured out that the ‘need-to-have’ benefits comprised 80% of the total cost. The ‘nice-to-haves’ are where a lot of the impact comes from, so it was quite an easy argument to say, ”We have to do the core stuff, such as paid leave, so people can take the time they need. It’s only a little extra to do all these other cool things that don't cost that much but are super impactful.” 

The Crayon State of Parental Leave Report was the most helpful resource I used because everyone wants to know what other companies are doing when presenting something like this. What’s the average? What's the maximum? What's the minimum? And where do we want to sit on that spectrum? 

We also talked to the parents at Tracksuit. We have a Slack group for our parents, and I posted there asking them if they were to take parental leave, would the new policy address the things they’re worried about? What worked or didn’t work when they took parental leave, whether at Tracksuit or elsewhere? 

What did you learn from your employees? 

First, it reinforced that our people value those extra add-ons, such as continuing to vest ESOP while on parental leave. 

Second, we continue to tweak and change our policy as we get feedback. We’ve added paid leave for IVF, and we’re reevaluating whether the four weeks of meals should be a baby bonus instead because not everyone needs meals. 

What approval process did you have to go through? 

I worked really closely with our Head of Strategy and Operations, Dan, to refine the policy, then pitched it to the CEO. Once they accepted it, that was it - we implemented it straight away. Our investors are also passionate about Tracksuit’s team culture.

What advice would you have for other startup leaders?

Around the time I was working on this, I read a book called Invisible Women. If you think about parental leave, there’s potentially a long-term cumulative impact from things such as missing out on KiwiSaver contributions, not having ESOP vesting, missing out on a pay rise or promotion the month before you go on leave because that's when salary reviews fall and even the value of your annual leave zeroing out when you get back. 

Addressing this isn’t as costly to the business as paying someone's salary for 12 weeks, but the long-term impact is significant. Yes, we need short-term financial support because our people need to survive. But then also down the track, there's all this stuff that people don't really think about, and by the time someone comes to retirement age, it has led to quite a wealth gap. For startups who can’t afford the significant cost to cover salaries on leave, my advice is to get creative and over-index on things that are lower cost but high impact.

What's the staff feedback been like?

The best feedback is seeing people feel comfortable using the policy, and we've had quite a few who have taken parental leave or are about to. 

We continue to monitor the feedback. Because the latest policy coincided with a funding round, we wanted to ensure people didn’t feel we underdid it. At the same time, we didn’t want people who aren’t parents to feel like they wouldn’t get other benefits because all the money was spent on the parents, so it’s a balance. 

We put a lot of effort into writing out our thought processes and research. We have a robust policy full of explanations, especially for aspects of the policy where the benefit isn’t fully realised until later. 

I don't often hear of companies providing explanations alongside the clause or the parental leave provisions, but I like this approach.

That's part of making it ‘Tracksuity’. We’ve added context and made our thinking transparent. We’ve tried to explain why it's fair because fairness is one of the big things we always try to angle for. 

Do you have the same policy around the world? 

Yes, our approach has been the same for everyone. We look at both what they receive from Tracksuit and what they get from the government. 

We have four different locations, and we want everyone to feel equally able to fully utilise the policy, otherwise, there's no point in having it.

Initially, before we dug into the New York statutory allowances, we were under the assumption that there would be almost nothing for everyone in the US. Should we keep people's roles open for a year, like in New Zealand, even though we don't need to do so in the US? We got some feedback that people in the US don't want that because if you can't get paid parental leave, no one will use that. 

Where to from here?

The next stage is to consider the fundamental reasons for our benefits and ensure they remain scalable. For example, if you ask ten people why we have that extra half-day of pay, you’ll get different answers. We want to ensure it’s all aligned and everyone knows the intention. 

Currently, there are few guardrails or guidance around how to use it. It tends to be mainly used by mums returning from parental leave. But what’s our purpose? Is it to get mums back to work after they've had a baby? Should we push for more dads to use this if we want to be equitable? And what about people who aren’t parents? 

I'm super interested in talking to the team about it to figure out the underlying reason for our policy.

Any last words of advice? 

I want to emphasise that it's not perfect and doesn't suit everyone. We're still figuring things out. The current policy officially rolled out in March 2024, but I've changed the document at least three times since then, and it will change again. 

Thank you, Christine! I’m excited to see where Tracksuit and your parental leave policy go next.

See what parental leave benefits other organisations are offering their people.