Former Pepsi CEO Indra Nooyi Shares Her Views on the Future of Paid Leave: ‘It’s a Human Issue’

NEW YORK, NY - NOVEMBER 10:  Chairman and CEO of PepsiCo Indra Nooyi speaks at The New York Times DealBook Conference at Jazz at Lincoln Center on November 10, 2016 in New York City.
Bryan Bedder / Getty Images

The United States is the only industrialized country without a federal paid family leave policy, a policy that gives parents compensated time off to care for a new child and allows workers paid time off to care for a sick family member. With no federal policy in place, 89% of private industry employees currently don’t have access to paid family leave, according to the latest data from the Bureau of Labor Statistics.

During the 2021 Forbes Power Women’s Summit, former Pepsi CEO Indra Nooyi shared her own experiences with paid leave, how to best implement it and how paid leave benefits both employers and employees. Here’s why she believes paid leave is “a human issue.”

How Paid Leave Helped Indra Nooyi Excell in Her Career

Nooyi was early in her career when she had to take time off to care for her sick father.

“I wouldn’t have ascended to the job of CEO of PepsiCo without paid leave, because early in my career as a consultant, two years after I started my career, I was given unexpected paid leave to take care of my father who was dying of cancer,” she said. “It happened all of a sudden, and I just needed to take time off to take care of my father.”

Nooyi took advantage of paid leave again following the births of each of her two children and after she was in a serious car accident.

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“If I wasn’t given paid leave, I would have had to quit my job, and I don’t know where my life would have gone because I have no idea how I could have re-entered the job after I quit it,” she said. “Nobody’s life is a straight line — it goes through twists and turns. And if you want to hold onto your best and brightest, you ought to be able to give people paid leave.”

How Companies Can Realistically Implement Paid Leave Policies

It can be easy for companies, especially small- and mid-size companies, to be daunted by the idea of giving paid leave to employees.

“I think people are thinking about other countries where they get six months leave for maternity and they think, ‘Oh, we can’t do it.’ I think it’s important we look at paid leave as a human issue, and start with saying, ‘Let’s craft a program which gives people the minimum number of days to recover,'” Nooyi said. “Let’s start with 10 weeks, 12 weeks. Let’s start with something.”

Nooyi acknowledges that the way many companies are currently set up, losing an employee for 12 weeks can be a large hindrance. So she’s calling on business leaders to be creative when coming up with solutions.

“I think what needs to be thought through is, if we will have paid leave and somebody steps out for 12 weeks or 16 weeks and comes back to the original job as opposed to their job being replaced, we have to think of a culture of people who can move across the company and assume some of these jobs,” she said. “Clearly, you can’t replace a CEO or a C-suite executive, but if it’s a mid-level executive, couldn’t you have an executive group of retirees who can fill in some of these jobs that have to be functioning when this person is out?”

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“There’s got to be creativity, there’s got to be commitment to solutions,” Nooyi continued. “Say, ‘We believe in paid leave, but how are we going to implement it?,’ as opposed to, ‘We don’t want to talk about implementation because we don’t like the fact that it requires us to think differently.’ If we lean in with a can-do and a must sense of responsibility, I think we will come up with solutions. It can be done. It’s not just having a lot of people so that people can do all the jobs. It’s being able to fill those jobs strategically for the time that people are gone.”

The Competitive Advantages of Offering Paid Leave

Paid leave obviously benefits employees, but it also has benefits for employers, Nooyi explained.

“Hiring a person costs money. Training them and retaining them is the most important thing, especially for that person who’s a good contributor,” she said. “You want to hold onto every talent that you have in a world where what differentiates a good company from the bad is the quality of the talent. So I think it’s very important we provide the support structures to allow people to stay in the job.”

Paid leave allows for talent retention, which helps individual employers as well as the economy at large — without paid leave, women are often forced to leave the workforce.

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“We need the best brains to work in the economy, and they also happen to be women,” Nooyi said. “So let’s figure out how to bring the best and the brightest to serve the economy, and stop thinking of family as just female’s problem. Family is not female. Family is family. And don’t think of women in the workforce as a feminist issue, think of it as an economic [issue]. If you did that, I actually believe that the way we discuss all of these issues will change.”

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