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Ideas for reducing the “maternity leave penalty”
Throughout my almost 35 years in business, I’ve wondered, ‘Where are they?’
I keep looking for more women at the senior leadership table, but year after year, I’m still usually one of the only ones there. And I’ve read that the pandemic made it worse. I was shocked (and dismayed) to read that the number of women in Canada’s pipeline to senior leadership dropped by almost 12% in 2023, according to The Prosperity Project.
What’s going on?
It’s certainly not for lack of talent. Women are graduating from university at higher rates than men (roughly 60/40 according to Statistics Canada). Nor is it a matter of ambition. According to the latest Women in the Workplace report by LeanIn.org and McKinsey, women are more ambitious than before the pandemic—and equally as ambitious as men.
So, why are so few of these talented, driven people advancing? Why, as Women in Workplace found, are only 87 women promoted from entry-level to manager for every 100 men promoted?
It’s a question I think about a lot, especially since I’ve seen it firsthand in my network of professional women, many of whom report feeling stunted.
There are (unfortunately) many complex factors, but key among them, I think, is the so-called “maternity leave penalty.”
Studies have shown that starting with the birth of a first child, working mothers earn up to 20% less and are promoted less often than working fathers, and they never catch up. While on leave they miss out on career advancement and learning opportunities, and the longer the leave, the bigger the hit to their career. Researchers found that women who take 12 months off (or longer) are seen as lacking in ambition, drive and dedication. They’re also less likely to receive a promotion or a pay raise upon their return − and in fact, are more likely to be let go or downsized.
In my view, all of this points to mat leave as a key contributor to the “broken rung” for some women. After all, that critical step from entry-level to management often coincides with a woman’s prime childbearing years, sparking some difficult choices for those planning a family: she either leans backs voluntarily (thinking there’s no way to combine leadership and motherhood) … or hopes her employer still sees her as a valuable contributor and major contender before, during and after mat leave.
After our recent webinar, Making Maternity Leave Matter, I’m optimistic that for working women who want to have children, the latter option will be possible for many of them in the future.
At the event, my co-panelists and I shared some tips, resources and things we’re trialling to create a more family-friendly culture, change our mindsets about working moms, and boost our mat leave offering at every stage. We also shared some personal stories and missteps we’ve made along the way—we’re still learning.
Throughout our conversation, the key thing that struck me is that, even when employers have the best policies and processes in place, it’s ultimately about people.
Leaders and hiring managers, men and women, those with and without children—everyone needs to see women of child-bearing age, pregnant women and working moms alike as valuable contributors and contenders for leadership positions. These talented women are capable of advancing while raising a family, and they need our support.
Here are some highlights from our discussion—contact us if you have questions or comments: firstname.lastname@example.org.
This isn’t about putting women ahead of men. I believe in equal opportunity for all, but the fact is, things aren’t equal for working moms and working dads.
While it’s challenging for all working parents to balance work with family, both the data and my personal experience show that men don’t see the same career penalty as women when they take parental leave.
In fact, for some working dads, fatherhood can result in an increase in earnings, and those who take leave can be seen as better leaders and more hireable. Since they tend to take shorter leaves than women, almost like a vacation, men aren’t usually replaced when they go on leave, so they’re seen as more valuable.
During our event, the responses to our two polls about baby showers were telling. Of the employers in attendance:
I think a family-friendly workplace that promotes equality should signal that it’s okay for men and women to take equal amounts of parental leave (stay tuned for more info on ways to encourage more men to take leave) and celebrate fathers and mothers equally with a shower or team celebration when the baby is born.
Everyone is different. In my experience, some moms in my organization want to step back completely while on leave to spend dedicated time with their baby (wonderful), while others miss contributing at work and long to stay connected (also wonderful).
We’re fortunate in Canada to have paid EI maternity and parental leave, but as shown above, the longer the leave (and the more time away from paid work), the bigger the hit to a woman’s career. To ensure that we, as a society, see women as equally irreplaceable as their male colleagues and keep them progressing in their careers while on maternity leave, what if we could offer them the option to contribute up to 15 hours per week while on leave—with no claw back of their EI benefits?
This past summer, I sent a letter to the Honourable Randy Boissonnault, the Minister of Employment, Workforce Development and Official Languages, proposing a new Hybrid EI Maternity Leave Model. While I’m still waiting to hear back, I’ve seen very encouraging signs of support from the employers in my network so far. If you’re interested in seeing a copy of my proposal, please contact us (email@example.com). And if you’re interested in participating as an employer, I encourage you to write to the Honourable Minister Boissonnault as well.
Today, for every $1 of part-time income that a woman on maternity leave earns, 50 cents of her EI benefits are clawed back on up to 90% of her previous weekly earnings. And for anything above that, EI benefits are deducted dollar-for-dollar.
Since there’s no financial incentive for women to keep working while on leave, most employers don’t even suggest it. Instead, many cut ties altogether with the woman on leave (in one of our LinkedIn polls, 46% of respondents lost network access completely and another 12% had only partial access), which only reinforces that working moms aren’t as valuable.
I employ 225 staff members, 75% of whom are women, and have seen firsthand how frustrating it is for the employer and the new mom who wants to keep working part-time while on leave but can’t. Today, she faces three dismal choices: work for free; get paid only to see her income clawed back; or opt out of work completely. Not one choice is viable.
Canada’s EI offering was created at a time when remote work was largely impossible due to technology and connectivity constraints. But times have changed, and I think it’s time that our EI maternity leave offering followed suit.
In my organization’s remote-by-choice work model, our team members are dispersed across Canada, and many choose to work remotely 100% of the time. If a new mom wanted to work from home part-time while caring for her newborn child, she could certainly do so. However, as an employer, I can’t offer this option today.
I think that provided the employer and employee were both on board, this new model could be a game-changer for many working moms out there. Employers could offer their valuable women employees the opportunity to continue working (and get paid for it), and stay engaged, learning and growing in their careers while on leave.
I also think it would provide a much-needed boost to our workforce and economy, eliminating barriers to the labour market for women and boosting gender parity.
And I’m sure, as employers look for ways to build a family-friendly culture, many would appreciate the option of offering a progressive policy that fosters inclusivity and ensures that everyone is able to use their talents wherever and whenever they are most productive.
I’d love to hear from you. Do you think this model could help nix the “maternity leave penalty”? What other ideas do you have for fixing the “broken rung,” so we see more talented women advance to senior leadership? Please share your thoughts and suggestions.