Netflix’s Culture Led to Extraordinary Parental Leave. That’s Over.
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What is Netflix's unique work culture?
Ever since it was founded in the late 1990s, Netflix has tried to build a special work culture.
Think about it as sort of a corporate anti-bureaucracy utopia. So there's a lot of transparency.
That's our colleague Jessica Tunkel. She says that Netflix trusted employees with a lot of leeway.
Everyone could trust. access strategy plans and could weigh in on things. You know, the expense policy was like act in Netflix's best interest. So if that meant flying business class, go do it. If it means taking your team to a five-star restaurant, go do it. Like it was, there was no red tape on anything.
Netflix also gave out really generous benefits when it came to things like vacation. And in 2015, the company added a perk that was especially unusual, even among tech companies. A whole year of paid parental leave.
So the idea behind this was, look, we're looking at tech companies all the time. We're trying to recruit from them. Google was one that they talk about a lot. Google's policy at the time, I believe, was 18 weeks paid leave, which was pretty significant. And they said, let's do better than that. Let's say people can take up to a year unlimited. And so they did.
But as the company has grown, it turns out that what you put on paper isn't always what happens in practice. And Netflix has been pulling back on some of its generous benefits. Welcome to The Journal, our show about money, business, and power. I'm Ryan Knudson. It's Monday, January 6th. Coming up on the show, the cultural reckoning at Netflix.
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When Netflix came out with its year-long paid parental leave policy in 2015, it got a lot of attention.
How did Netflix’s parental leave policy gain attention?
It definitely made a splash. I mean, every publication, including the Wall Street Journal, wrote about it because it was so unheard of. And they, you know, they got on and continue to get on all these, like, best places to work lists. And a lot of these publications mention their very generous parental leave policy.
Did they think that people would actually come to the company because of this policy?
Yeah, I mean, I think the thinking behind it, and I think this did work, was that Netflix also was having more women, particularly entering the senior ranks of the company, and they wanted to continue to be able to recruit and retain women. So, yeah, I 100% think that it worked from that perspective. Also, at the time when they came out with this policy, Netflix was becoming a global company, and people in other countries look at the parental leave policies in the U.S. and think that We're crazy about how short it is. So the idea was, we want to make this great for our employees, and we want to help recruit and retain the best talent all over the world.
A year of paid parental leave was surprising to many people in America. But at Netflix, the company already had a culture of trusting employees to set their own boundaries, an idea that was enshrined in a memo that outlined the company's culture.
So the section that... I talk about a lot is the freedom and responsibility section because the freedom and responsibility was really probably the most unique thing in the memo. That was this idea of, you know, expensive policies being act in Netflix's best interest. You know, their vacation policy was take vacation. Like it was this idea of like, we will give you all the freedom and you should have the responsibility to act accordingly.
Over the years, executives at Netflix credited this culture of freedom and responsibility for being able to recruit the best talent. And as the company grew from hundreds of employees to thousands, it set them apart.
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