Volvo Is Set to Give All Employees 24 Weeks of Paid Parental Leave

• Swedish automaker Volvo Cars is increasing paid parental leave for hourly and salaried employees globally.
• The "Family Bond" program covers those who become parents through birth, adoption, permanent foster care and surrogates as well as non-birth parents in same-sex couples.
• The policy is meant to assist the company in talent acquisition and retention as it focuses on becoming an all-electric vehicle manufacturer by 2030, according to Volvo's CEO.

Swedish automaker Volvo Cars is increasing paid parental leave for employees globally to 24 weeks regardless of gender, the company announced Tuesday.

Employees — both hourly and salaried — who have been with the automaker for at least one year are eligible for the new "Family Bond" program, the company said.

It covers those who become parents through birth, adoption, permanent foster care and surrogates. Non-birth parents in same-sex couples are eligible as well. The program takes effect Thursday, Volvo said.

Employees will be paid 80% of their base pay by default under the program. They can use the time off from work during the first three years of parenting a new child. U.S. employees also have the option of 19 weeks of fully paid parental leave within 36 months of becoming a parent, according to Volvo.

The new policy is meant to assist the company in talent acquisition and retention as it focuses on becoming an all-electric vehicle manufacturer by 2030, according to Volvo CEO Hakan Samuelsson.

"It's something we believe is setting a new standard in the business," he told CNBC. "We do this, not to introduce some kind of new favorable benefit to our employees, we do it more because we think it's good for our company. We will be more attractive as an employer. There's a competition going on for talent."

Samuelsson said the company expects the new program to cost a "considerable sum" — likely in the "single-digit millions." He said as long as "it gives us better, diverse management and a stronger brand, it will definitely be worth it."

Volvo's current program allows for six weeks of pay to be used in the first year of becoming a parent, according to the company.

Volvo's new parental leave program is among the most comprehensive in the automotive industry. For example, General Motors and Stellantis offer U.S. salaried employees up to 12 weeks of paid family leave for new parents, while Ford Motor offers up to eight weeks. Ford's is in addition to the six to eight weeks available to birth mothers.

Volvo decided to launch the new parental leave program following positive results of a similar pilot program for thousands of its sales employees in Europe, Samuelsson said.

"What we do as a company is living our values," he said. "It will be good for our reputation everywhere."