UK: It's cheaper to be generous on staff maternity leave.

UK: It's cheaper to be generous on staff maternity leave. - With companies increasingly turning to benefits to boost employee loyalty, improved maternity pay seems an obvious candidate for inclusion in staff contracts. Companies are already required to g

by
Last Updated: 31 Aug 2010

With companies increasingly turning to benefits to boost employee loyalty, improved maternity pay seems an obvious candidate for inclusion in staff contracts. Companies are already required to give most pregnant staff 14 weeks leave, with statutory maternity pay of 90% of earnings for the first six weeks and a flat amount (currently £57.70 per week) for the next 12 weeks. Given that at least 92% of these costs can be reclaimed from the Treasury, topping it up seems a relatively cheap staff perk.

Yet, says the TUC, most companies keep their maternity provisions to the legal minimum and, while a minority extend leave provision, only 5% top this up with extra cash. So which firms constitute this 5% and why do they do it?

British Telecom, one of the UK's biggest employers, is one such company.

It offers three alternative maternity packages, the most popular being 14 weeks on full pay, followed by four weeks on statutory pay. But women make up only a quarter of its 127,000 workforce. British Petroleum offers up to 40 weeks leave, up to six months on full pay. In this case, 30% of its workforce are women.

These deals are more generous than many in the banking and retail sectors, however, which traditionally employ more women. Lloyds TSB offers 52 weeks leave for both parents but no extra cash. Sainsbury offers statutory pay for the full 14 weeks to its women managers (around 5,000 of its 122,000 employees).

All this looks mean-spirited compared with Cambridge City Council. After one year's service, female employees are allowed a total of 63 weeks off, with either six weeks on full pay followed by 34 at half, or 26 weeks at full pay with the rest unpaid.

Such generosity is extremely rare, and maternity benefits look set to remain low-priority for many organisations. The example of Gail Rebuck, chief executive at publisher Random House, has done little to improve the situation. She took just one week off to have her baby: 'At the time, this was seen as a wonderful thing but, in retrospect, she was setting an impossibly high standard,' sighs a member of Women in Publishing. Yet companies would be unwise if they fail to recognise a movement towards more generous provision, particularly in light of the EC's Parental Leave Directive, due to hit the UK's statute books next year which is likely to extend provision. Get ahead. Listen to the costs argument. A few years ago, Sainsbury worked out the costs of training a replacement for a deputy manager on £21,000 a year. At over £29,000, the retailer would save at least £8,000, provided the woman returned to work.

Find this article useful?

Get more great articles like this in your inbox every lunchtime