Volvo Cars has announced it will give all its 40,000 employees worldwide with at least one year’s service 24 weeks paid parental leave “at 80% of their base pay by default” as of April 1, 2021, in an effort to support female executives and equal parenting.

The policy applies to either parent and the leave can be taken any time within the three first years of parenthood.

Around a third of Volvo Cars’ senior managers are currently female and the company aims to increase that share to 50%.

In any countries where local regulations offer a more generous parental leave, local regulations will take precedence.

In Sweden, new parents are — in general — legally entitled to around one year of parental leave on up to 80% of pay.

Volvo Cars has been owned by China’s Zhejiang Geely Holding since 2010.

The company’s head office, product development, marketing and administration functions are mainly located in Gothenburg, Sweden.

Volvo Cars’ head office for APAC is located in Shanghai.

The company’s main car production plants are located at Gothenburg in Sweden, Ghent in Belgium, South Carolina in the US, and Chengdu and Daqing in China, while engines are manufactured in Skövde, Sweden, and Zhangjiakou, China, and body components in Olofström, Sweden.

“We want to create a culture that supports equal parenting for all genders,” said Volvo Cars CEO Håkan Samuelsson.

“When parents are supported to balance the demands of work and family, it helps to close the gender gap and allows everyone to excel in their careers.

“We have always been a family-oriented and human-centric company.

“Through the Family Bond programme, we are demonstrating and living our values, which in turn will strengthen our brand.”

Volvo Cars said its policy is more inclusive and supportive than many existing policies around the world, and includes all legally registered parents including adoptive, foster care and surrogate parents, as well as non-birth parents in same-sex couples.

The firm said its policy is inspired by the national legislation in its home market of Sweden, famous for its generous parental leave arrangements, which Volvo said have delivered tangible benefits for parents and children.

It follows a parental leave pilot scheme launched by Volvo in the EMEA region in 2019, in which 46% of all applicants were fathers.

“This is more than a new parental leave policy for our employees – it is the embodiment of our company culture and values,” said Hanna Fager, Volvo Cars head of corporate functions.

“We want to lead change in this industry and set a new global people standard.

“By opting all our employees into paid parental leave we narrow the gender gap and get a more diverse workforce, boosting performance and strengthening our business.”

When studying the outcome of its parental leave pilot, the company said it found that employees “appreciated the policy for being gender neutral, inclusive and adaptable to personal needs.”

It said the studies also resulted in important insights on “how to encourage even more employees to take parental leave and make parental leave for both parents the new ‘norm’.”