IWD2017: Your baby or your boss?

Fiona Smith

Fiona Smith Leadership journalist


To celebrate International Women’s day, all week BlueNotes will be guest edited by experienced journalist and author Catherine Fox. We’ll be publishing content on women, their experience in the workplace and the future of equality as the world looks to #beboldforchange. We hope you enjoy it. #IWD2017

With the ongoing endurance march toward equality at work, one challenge for women never goes away – the day you have to tell your boss you are having a baby.

For fathers-to-be it is a cause for celebration, of backslapping, some hugs and then back to work. For expectant mothers, the cheers are tempered with the knowledge you have now become a problem to be solved.

Nearly half of all women report they have received unfavourable treatment on announcing their happy news, with responses ranging from very unpleasant remarks to dismissal, according to a 2014 survey by the Australian Human Rights Commission.

For Lisa*, a solicitor, everything went well with her discussions with the head of the boutique Sydney law firm that employed her.

She had been there for eight years, was one of their most successful litigators and kept the managing partner appraised of her plans to come back part-time after a year on maternity leave. Everything was sweet.

Then, three weeks before she was due to return, something changed. She was told she could come back full time or nothing, forcing her to quit her job.

At the time, she would have had to take them to the Federal Court to fight their decision and it would have been impossible to go back to work there after that.

Client insisted: ‘No part-timers’

“I think what happened was that there were three of us on maternity leave at the same time [out of 20 solicitors in the Sydney office] and they decided we were taking them for a ride,” Lisa says.

“They didn’t think I would resign over it but they thought they could force us all to come back full time. Once they saw that I resigned, they quickly folded with the other two and let them work part-time.”

Lisa also heard on the grapevine the firm’s biggest client, a supermarket chain, was insisting no part-timers work on any of their cases.

Discrimination against mothers can come from every direction. But how realistic are the fears that drive this kind of discrimination? And what about the upside from retaining skilled employees?

Certainly, when people have babies, their employers have to make changes which can carry a cost.

Expenses can include recruitment and training costs of temporary staff to cover maternity leave, administration costs of accommodating part-time work and parental leave payments (if they volunteer to be one of the 48 per cent of employers who offer their own schemes).

What is the alternative?

But other relevant questions to ask are: what is the real cost when it is offset by benefits such as higher return-to-work rates and lower recruitment costs; and what is the alternative?

The second question is the easiest to answer. It is not an option to refuse to hire women on the basis they may have a baby at some stage – employers who did this would be cutting their own throats by knocking back 50 per cent of the best brains in the country, based on the fear they may want to take several months off or come back part-time.

The first question – about the actual costs – is trickier because it is difficult to pinpoint what percentage of a workforce may be on parental leave at any one time, as well as:

-what the replacement costs would be if they chose to leave rather than come back to work earlier than they wanted;

- how to quantify the reputational benefits of being seen as a family-friendly employer; and

- how to measure improvements in productivity when parents have their childcare arrangements sorted to their satisfaction.

What they offer

Around 48.2 per cent of private sector employers (of 100 or more employees) offer an average of 10.5 weeks paid parental leave, according to the Workplace Gender Equality Agency.

The rest leave it to the government’s Paid Parental Leave (PPL) scheme to offer support. Public sector employees typically get 14 weeks’ salary at full rate, paid by their employer, separate from the PPL.

How long are mothers away?

Around 32 weeks (eight months) according to research by the Australian Bureau of Statistics in 2011. Women in Australia average 1.75 births each.

Costs of filling in

Large employers may be able to spread work around and avoid filling the gap with a temporary worker.

Because most, if not all, of the maternity leave is unpaid by the employer, the costs of replacing them for larger employers can be regarded as “negligible”, except for a possible loss of productivity from having less experienced temporary replacements. These costs would be harder for small employers to absorb.

What happens when they return?

Around 77 per cent of mothers go back to work, 33 per cent of them to the same wages and conditions. Of those who change their arrangements, 57 per cent opted for permanent part-time.

What about the costs of part-timers?

It is possible parents transitioning to fewer hours can help employers reduce their wage bills, if the overflow of work can be redistributed to other employees.

There would be some ad ministrative costs if they needed to hire two people, instead of one, but women working part-time are often highly efficient and appreciative of their jobs, so productivity could rise.

What happens if employers don’t play ball?

Like Lisa’s employer, they discover when given a Hobson’s Choice between their helpless baby and their boss, parents will choose their child.

Those who are forced back to work earlier than they feel is right are unlikely to be as productive as they were, they may be distressed, they may need time away to deal with unsatisfactory childcare arrangements and they may quit their jobs at the first viable opportunity.

Costs nothing

Google stopped losing new mothers when the company increased its paid maternity leave from 12 to 18 weeks in the US. Laszlo Bock, senior VP of Google’s people operations, has said Google was losing new mothers at twice the average rate but the change to parental leave wiped out the difference.

The cost of having a mom out of the office for an extra couple of months was more than offset by the value of retaining her expertise and avoiding the cost of finding and training a new hire,” Bock writes in his book Work Rules!

While some managers are reluctant to accommodate women taking parenting leave, there are now many large employers in a bidding war to employ and retain women, offering increasingly generous parental leave and flexibility benefits.

Aside from realising it is a competitive advantage to be family friendly when trying to get the best talent on board, they also know the costs of replacement can be crippling.

Replacement cost savings

It can cost up to two to three times the annual salary of the person who has left to replace them, depending on their industry and skills, says the Director of the Women♀Work Research Group  Professor Marian Baird.

This can make 10 week’s parental leave pay and the costs of getting a temporary replacement look like chickenfeed.

Baird says it is also interesting to look at the reputational benefits of being a good employer of women. She recalls working with GM Holden some years ago when the car company introduced paid maternity leave.

“There weren’t many women working there, so it wasn’t going to cost them very much anyway. They measured the positive media publicity they got after it was introduced and it was like two years’ free advertising for them,” she says.

“The reputational impact is very big and I am sure they can translate that to dollar figure.”

When it comes to productivity improvements, taking care of employees when they become a parent results in greater commitment and loyalty, Baird says.

“They know the women are more loyal, they work harder, they put in more effort when they work, they talk about the company in a good way when they are outside of work,” she says.

“There are all of those measures, but they are much harder to translate into a dollar figure.”

 *Not her real name.

Fiona Smith is a journalist who writes on leadership, specialising in careers, management and company culture

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.