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Maternity Benefits (Amendment) Act 2017 has not helped in improving women labour force participation states TeamLease Report

Out of the 10 sectors reviewed women participation has dropped in more than 5 sectors since the implementation of the act

Bengaluru, November 2nd October, 2020: India’s largest composite staffing firm, TeamLease Services today launched their latest report Maternity Benefits (Amendment) Act 2017: Revisiting the impact, a detailed follow up study on the impact of Maternity Benefits (Amendment) Act 2017. According to the report, the Maternity Benefits (Amendment) Act 2017 is yet to have a positive impact on women labour force participation. As per our earlier research conducted in 2018, 7 out of the 10 sectors reviewed were expected to show a positive momentum in women workforce participation in the medium term (1-4 years) owing to the act, however the needle seems to have not moved much. In fact, in the current edition, 5 of the 10 sectors reviewed are lagging behind. They are indicating a drop in the share of women in their workforce. The longer than expected gestation period of the act in improving the ratio of women at work is attributed to a multitude of factors.

Lack of awareness about the act, increase in the cost and increased burden on fellow employees are some of the fallouts employers are attributing to the act. Time spent on domestic duties, social stigma against women in employment and regressive attitude of employers are some of the main reasons cited by women for choosing to stay away from work.

KEY FINDINGS OF THE STUDY

The Maternity Benefits (Amendment) Act 2017 is yet to deliver a positive impact on job opportunities for women. One societal reality significantly hinders the success of the Maternity Benefits Act: household duties and responsibilities, and the associated stigma, burdening women far more than men.

Women likely faced a net job opportunity loss between 9.1 lakhs and 13.6 lakhs over FY 2019-20, as compared to the 13 lakhs –18lakhs job loss in FY 2018-19.

  • Job Opportunity Gain: BPO/ITes, BFSI, Ecommerce and IT displayed moderate to significant job opportunity gain for women during FY 2019-20 –in line with the forecast made in the previous edition of the report. BFSI continues to employ the highest proportion of women in the workforce, compared with other sectors.
  • Job Opportunity Loss: Aviation, Retail, and Tourism continued to cause net job opportunity loss for women during FY 2019-20, belying expectations of net gain. Education, Real estate and Manufacturing also caused job opportunity loss, in place of the expected mixed outlook.
  • Industry behaviour towards hiring of women: Large (private and public), and Small and Medium (public) companies have stayed in the “Benevolent” zone, Start-ups have remained split between the “Calculative” and “Manipulative” zones, whereas some of the SMEs are not just “Manipulative” but also “Restrictive” in their hiring behaviour.
  • Estimates of Post-maternity retention costs: between 84% and 102% (increase of 4% –12% from FY 2018-19) of the annual salary in case of white collar employees, and up to 118% (reduction of 17% from FY 2018-19) of annual salary in case of blue collar employees.
  • Hiring outlook forecasts by geography: Of the 28 states and 2 union territories, 13 stayed true to the forecasts and 17 bucked the forecasts, made for medium term.

o   Of the 10 states which were expected to show a negative outlook over the medium term, 6 states and 2 union territories have posted a higher LFPR in FY 2018-19 when compared to FY 2017-18.

o   Of the 20 states that were predicted to have moderate to high positive outlook, 9 states ended up posting a lower LFPR in FY 2018-19 than in FY 2017-18. Himachal Pradesh has the highest LFPR of 64.1% and Bihar has the lowest LFPR of 4.5%.

  • What is preventing women from joining the workforce?

o   Top 3 obstacles to having a successful career: Time spent on domestic duties (30%), Social stigma against women in employment (24%) and Gender stereotype/Regressive attitudes of Employers (21%)

o   Biggest workplace challenge for women

  • Start-ups (56%) and MSMEs (45%) –inadequate leaves (Maternity/Non-Maternity);
  • MNCs (33%) –not being considered for promotions;
  • Family run business (43%) –not being given work that is challenging enough.

o   Top three post-maternity challenges faced by women: Wage cuts (30%), resistance/lack of support from family (25%) and Access to childcare (20%).

  • Employer /Industry sentiments on the Maternity Benefit (Amendment) Act 2017 (TeamLease Maternity Benefits Act (revisited) Survey Findings)

o   Awareness: Only 53% of the employers have complete awareness of the act and its provisions.

o   Employer opinion: 47% employers negative, 40% positive, and 13% neutral, with greater than 90% of all employers facing issues in varying degrees of severity.

o   Impact on organizations: 84% of the employers believe the act has negatively impacted their organizations through increased attrition (34%), increased cost (24%) and increased burden to the employees (26%).

o   Compliance: Only 40% of all employers surveyed provide the mandated 26 weeks of paid maternity leave.

o   Perceived sense of benefit: 53% believe that the act is not cost effective at present, but that it will be beneficial in the long run.

  • Employee/Employer /Industry sentiments on childcare leave and retention of women talent post maternity

o   Post-maternity attrition-Employer perspective: Post-maternity attrition has increased to 45% from 40% in FY 2018-19.

o   Post-maternity attrition-Women Employee perspective: Post–maternity, 43% do not join back the workforce at all and only 27% go back to the same employer.

o   Paternity leave-Employer Perspective: 44% of all employers believe providing paternity leaves will not reduce maternity related women’s attrition.

o   Childcare Leave-Male Employee Perspective: 45% believe both parents should be provided paid leave. Most men agree that workplace gender bias has increased against women retention (48%) and career progression (54%).

o   Post-maternity women retention efforts by employers: are not aligned with actual challenges highlighted by women. Nearly one in four employers (24%) provide flexible working hours to reduce post maternity attrition, whereas the key challenge highlighted by women are wage cuts(30%)

Elaborating about the report, Ms. Rituparna Chakraborty, Executive Vice President and Co-Founder, TeamLease Services, said, “The act was a very bold and progressive move towards encouraging female workforce participation.  However, India is still among the bottom 10 countries in the world in terms of women’s workforce participation. Women’s LFPR for India stands at 20.52% in FY 2019-20 compared to 20.71% in FY 2018-19. In fact, the participation of women in urban areas wherein more than 55% are salaried is far poorer that rural women who are self-employed indicating the poor response to the act.”

“Weighing the burden of change on corporates alone will not be effective, it will require a comprehensive approach. The speedy passing of the proposed changes like the incentive scheme wherein 7 weeks wages would be reimbursed to employers who employ women workers with wage ceiling up to Rs. 15000/-and provide the maternity benefit of 26 weeks paid leave coupled with wide spread campaigns to highlight certain deep-rooted societal challenges that women face will improve the efficacy of the act.” added Ms. Rituparna Chakraborty

A comprehensive analysis covering the views of all the stake holder including male employees, as per the study around 36% of the male respondents felt the act was one sided. They also were of the opinion (45% of the respondent) that both parents should get paid leave for childcare.

Apart from the impact of the act, the research also delves deep into the efficacy of the different retention initiatives undertaken by corporates to address the attrition owing to maternity. As per the analysis there seems to be a dissonance between women’s expectations and retention measures by employers. For instance, lack of pay parity –the topmost concern for women does not seem to warrant the amount of employer attention that it deserves.

 Maternity Benefits (Amendment) Act 2017: Revisiting the impact is a follow up report of The Impact of Maternity Benefits on Business and Employment – 2018. The current edition of the report covers the current opinion of corporates compared to the reaction when the act was amended in 2017, and steps taken by employers for implementing the provisions of the act. The analysis covers around 10 key sectors comprising of aviation, BPO / ITes, Real-estate, e-commerce, education, BFSI, IT, Manufacturing, retail and tourism.

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