Shrugging off concerns, companies on Tuesday welcomed the maternity bill with arms wide open. Companies such as Swedish furnishing giant Ikea, a leading two-wheeler manufacturer TVS and Cummins India, a part of the US $19.1 billion Cummins Inc, have generously added frills to the humble extension of maternity leave from 12 weeks to 26 weeks. Moreover, the policies will bring cheer to new fathers as well, thanks to the simmering concern over gender diversity at workplace.
Sample this: Furnishings company Ikea India has announced a new parental leave policy in which all employees, including men, will be entitled to six months of parental paid leave from this month. In addition to the 26 weeks leave, women employees will have an option of truncated work hours for another 16 weeks.
With the objective to achieve its commitment of a 50/50 gender balance, Ikea is also introducing India specific initiatives like in-store creches that allows women employees to build career even while raising a family.
According to the estimates of World Bank Group, advancing women's equality can add $12 trillion to global growth by 2025 and India can increase its GDP by 16% if it achieves gender parity in labour force.
At Cummins, women can avail up to 26 weeks of paid leave, not only on giving birth, but also in lieu of adoption or surrogacy. Similarly, male parents can also avail up to 4 weeks (30 days) of paternity leave. “This development is integral to the organization, keeping in line with its philosophy of gender equality, diversity and inclusion,” claims the company.
TVS on Tuesday announced that the maximum period of maternity leave shall be 30 weeks, inclusive of 26 weeks per statutory. Additionally, the leave entitled also includes one month of leave to cater to any illness arising due to pregnancy. “Also, in further addition to the maternity leave, women employees would also be entitled for a flexi working for a period of eight weeks,” said the press statement.
The Indian parliament raised paid maternity leave from 12 weeks to 26 weeks on Friday, thus benefiting 1.8 million women working in the organized sector. The move elevates India to the third position globally for number of paid weeks for maternity leave after Canada and Norway, at 50 weeks and 44 weeks respectively.
While the extension of maternity leave would increase the cost of hiring women for a company, the slew of benefits announced gave a much needed relief to the emerging debate over hiring prospects for women candidates.
How companies are effected?
For small companies, say a SME or startup who typically have about 20 to 25 employees, a 26-week leave of absence is a significant loss as they operate on small margins.
Recruiters believe that the leave extension will increase the probability of hiring male candidates against the female candidates in many organisations. “Cost of hiring women in the age group of 26 to 35, which is generally a child bearing age, may go up significantly. Also, no firm can afford the absence of an employee for period of six months,” said Kamal Karanth, former managing director at Kelly Services, US based staffing firm. “Hence, the chances of choosing male candidate over the female candidate are brighter.”
Questions such as “Are you married” and “How long have you been married” are commonly asked during interviews. “For any company, paid leave of 26 weeks means a lot. An employee missing for such long duration is just not affordable,” said a HR head of a well-known FMCG firm requesting anonymity.
Some international studies demonstrate that such policies favouring women staffers may produce negative effects in small organizations in developing countries as during the maternity absence, mother realizes the importance of care taking and decide to remain at home beyond their maternity leave.
