Two years ago, asset management firm TCW added a slate of family-building benefits to its roster, realizing its employees may need help having a child. The benefits include reimbursements for adoption, IVF, surrogacy, and egg-freezing costs, as well as paid time off to welcome a child.
“Our employee population is evolving. People now build families in different ways,” said Jessica Kung, executive VP and CHRO at TCW. “And those timelines can be maybe more later in life than they used to be.”
TCW isn’t the only company coming to such a realization, yet adoption benefits lag behind other offerings. Last year, 37% of companies offered paid leave for adoption, up from 27% in 2020, according to a report by the International Federation of Employee Benefit Plans. Financial reimbursement for adoption costs didn’t rise as sharply, growing to 20% last year from 17% in 2020. In contrast, the study found that 42% of companies offered fertility benefits, up from 30%.
Kung said adoption benefits aren’t as popular as the other family-building offerings. That’s not surprising because the number of adoptions has been falling. The number of adoptions completed with a child welfare agency fell to 53,665, in the fiscal year 2022 (down from 2019’s high of 66, 210), the most recent figures available from the US Office of Administration for Children & Families. Meanwhile, foreign adoptions fell to 1,300 in 2023 from 12,700 in 2009, according to the US State Department.
Reasons for the drop include foreign countries restricting adoptions and the Covid-19 pandemic, according to Rita Soronen, president and CEO of the Dave Thompson Foundation for Adoption. She said that there is no government agency recording private adoptions.
Yet, Soronen said she wouldn’t be surprised if the number increased in the wake of the 2022 Supreme Court ruling in the Dobbs v. Jackson Women’s Health Organization case, which eliminated a constitutional right to an abortion. The procedure has been outlawed or severely restricted in many states. Meanwhile, there have been attempts to limit IVF procedures. Last year, Alabama’s state supreme court caused a panic when it ruled that embryos were humans and destroying them was a crime. Alabama’s governor signed a law protecting providers and patients from any liability from the ruling. But other states have tried to limit IVF, and last year Senate Republicans blocked a bill that would have safeguarded the procedure.
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Moreover, LGBTQ+ couples, where only one partner is listed as the parent, are rushing to complete adoptions because they fear their rights will be curtailed in President Trump’s conservative government, according to published reports.
Adoption may not be widely used, but still can be expensive. Adopting a child out of foster care can cost almost nothing, while a private or overseas adoption can cost up to $40,000, according to Adopt US Kids.
Soronen said that when families form through an employee giving birth, some of their costs are covered by health insurance. She maintains that adoptive families should receive some type of compensation, too, because it “creates a sense of equity among the kinds of families formed.”
She said offering adoption perks would give employers an advantage. “It’s a benefit to the employer in terms of [employee] loyalty, retention, and recruitment,” Soronen said. “It’s a benefit to the employee that helps support [them at] a critical time in their lives, not unlike their fellow employees that go through a birthing process.”
TCW offers adoptive parents up to $30,000 throughout their employment towards adoption costs. They also receive four weeks of paid leave, though birth parents receive 16 weeks of paid leave. Kung said the policy follows industry benchmarks.
Bank of America has offered adoption benefits for at least 20 years and, over time, has added paternity leave and fertility programs, said Brandt Bennett, a global HR executive at the company. It gives an employee $20,000 to cover adoption costs and 16 weeks of paid leave.
“I think it helps from an [employee] attraction perspective,” Bennett said, adding that employees realize that you are not just investing in them professionally, but also in their families and well-being.