Refers to the career and economic costs that women face due to having children. Some key aspects:
- Women's earnings tend to decrease substantially after the birth of their first child, even after controlling for other factors. This is known as the "motherhood wage penalty".
- Mothers tend to earn less than women without children - around 30% less than non-mothers based on some estimates.
- The wage gap between mothers and non-mothers expands as women have more children.
Attrition rates for women in the workforce are 7 times higher than among men. The pandemic widened the gap even more as more than 2 million women globally left their jobs to become the full time caregivers at home.
More and more policies are being raised within the UK to close the gap including The Flexible Work Bill which passed in 2023. Childcare remain a highly debated topic in British politics and more funding is being given- £1.82B- toward high quality childcare.
Trends in the Market:
- 2+ million women aged 25-54 with partners and children under six left the workforce because of the pandemic.
- 61% of women find it challenging to re-enter the workforce after children.
- After childbirth, women are leaving due to lack of flexibility, followed by a lack of high quality affordable childcare.
Impact on the UK Economy:
- According to ONS, record numbers of women are dropping out of the workforce. In August 2022, 27.6% of women were not working because of family commitments, compared to only 7.4% of men.
- EU commission estimates that ‘the economic loss due to the gender employment gap amounts to €370 billion per year. Improving gender equality could lead to an increase in GDP of up to €3.15 trillion by 2050.
- Cost of maternity leave - The statutory pay requirement is 6 weeks at 90% pay and 33 weeks at £156.66 per week. For 6 months (26 weeks) at 90% pay this would be around £10,000 for the average UK salary of £33,000.
- Cost of childcare support - If the company provides childcare vouchers this averages around £55 per month per employee.
- Cost of retraining - Harder to estimate, but budgeting £2,000-5,000 for retraining per returning mother would not be unrealistic.
- Cost of maternity re-hire - Average cost to re-hire an employee is £30,000.
- Lost productivity - Re-hiring and re-training mothers likely incurs around 6 months lower productivity.
So in total, for each mother that takes maternity leave and returns, the total estimated cost for a UK company would likely fall in the range of £15,000 - £50,000, averaging around £30,000 across maternity pay, childcare support, retraining and lost productivity.