Guest post: "Discriminating against pregnant women harms employers as well as mothers"
A new report into the financial cost of maternity discrimination shows no one wins when working mothers are forced out of their jobs, says Monique Ebell
National Institute of Economic and Social Research
Posted on: Thu 27-Oct-16 11:16:51
(2 comments )
There is no shortage of advice to women - on how to manage our careers and body clocks, strive for work-life balance, 'lean in' and have it all. Sometimes it feels as if everyone has an opinion about how working women should organise their lives, and some of the advice can feel difficult to live up to.
In contrast, there seems to be less advice for employers about how to get the best out of their female workforce, particularly when they start a family. Of course, there is legislation in place instructing employers not to discriminate against pregnant workers and new mothers, but the advantages of following best practice are rarely spelt out.
However, a new report published by the Equality and Human Rights Commission (EHRC) shows that discrimination against mothers is not only unfair and wrong, but may also be financially harmful to employers.
Several months ago the EHRC commissioned our team at the National Institute of Economic and Social Research (NIESR) to estimate the financial costs of pregnancy discrimination to the women themselves, their employers and the state.
Previous EHRC research had already established the scale of the discrimination problem, showing that over three-quarters of pregnant women and new mothers – 390,000 women – experience negative and potentially discriminatory treatment at work each year. A total of 11% – the equivalent of around 54,000 women each year – are forced out of their jobs.
Far from being a callous but effective cost-cutting exercise, getting rid of pregnant workers or new mothers may actually end up costing companies money. Why? It turns out that recruiting people is expensive.
So far, so dispiriting and – for many of us – not surprising. But when we started crunching the numbers to calculate the financial impact of those 54,000 dismissals we found that far from being a callous but effective cost-cutting exercise, getting rid of pregnant workers or new mothers may actually end up costing companies money. In fact, at £280m a year, the total financial cost to employers is between two and six times greater than the total cost to the victims themselves.
Why is that? It turns out that recruiting people is expensive. Training new staff to replace employees with experience and skills also comes at a price and in the meantime productivity suffers. Employers are also stuck with Statutory Maternity Pay payments if the woman was on maternity leave when she left. And here is the kicker: the final figure may even be higher as we didn't have the data to include penalties imposed by the Employment Tribunal if women were successful in lodging a claim.
That is not to say that the costs to women of being forced to leave a job due to pregnancy or maternity are not important. The total costs to affected women varied between £46.6m and £113m over the year following the event, depending on what stage of pregnancy, maternity or return to work it occurred. Job loss early in the pregnancy led to higher financial costs due to the combined loss of Statutory Maternity Leave (SMP) and loss of earning. For women who were treated so badly that they felt they had to leave their jobs early in their pregnancy, we estimate costs per affected woman of just under £6000, while costs were lower for women who experienced this type of discrimination later in pregnancy (£2400) or upon return to work (£600).
The state, of course, is left to pick up the pieces. Pregnancy-related dismissals cost the state between £14m and £16.7m each year, due to lost tax revenue and increased benefit payments.
It's worth bearing in mind that the report does not cover a number of other costs – we didn't, for instance, address the potential impact of discrimination on a woman's mental and physical health and the resulting financial costs to the NHS. We were also unable to include longer-term costs, such as damage to career prospects. And, as I've already highlighted, insufficient data meant we could not calculate and include the considerable costs for all involved in employment tribunals and conciliation.
In short, even though we can only capture some of the costs, we can conclude that pregnancy discrimination does have substantial costs - not only for the affected women but also, in cases leading to dismissal, for employers themselves.
There are no winners here, but we hope that our study will make employers sit up and think. Far from being a savvy (if illegal) business practice, when employers force working mothers from their jobs, they are harming themselves.
By Monique Ebell
I agree. its poor thinking that suggests time in work defines ability and contribution, maternity included.
I've met and worked for and with utter incompetents who have had a supposed siolid career progression, and some fucking amazing people on jobshares with three kids. in fact as a person who has recruited teams, my eyes light up at jobshares and people who've had short contracts. it usually means they share information, are disciplined about knowing where they are in a task, and how to brief others, and are able to go into a situation with eyes open decide work social and other rules and relationships quickly amd tend to be slightly more task-focissed which i enjoy.
i know academics who have used childcare as a casual sabattical..no work but bedtime reading is keeping up to date with broad literature, and HR people who joined xpert HR and kept uplazily with HR practice and case law. I bet all of them came back with new vigour to find the silent drones inexplicably low performing.
i just dont get the tortoise ladder expectation of career growth and am not surprised at all that maternity-sacking companies lose something by being that way.
Good to see that explained.
Completely depends on individual workplaces.
My workspace is massively financially disadvantaged by mat leave by employees but we have to suck it up because that's the law.