How will the parental leave changes affect businesses?

Rhetoric about ‘family values’ often forms a political party’s baseline for many election manifestos. The left will promise greater state benefits for families, and the right will promise less tax. Although both of these result in families able to spend more money to support their children, the problem remains that people need to work in order to make an income to support their family, and work means time away from a developing child.

In generations past, this was not a problem as it was the husband’s traditional role to work while the wife would mind the house and family. But with the two pronged change of equality in the working world and decreasing salary value (as wages fail to keep up with inflation), it is now far more common to see both parents working full time simply to keep a roof over their heads.

European legislation regarding parental working rights has been met with a predictable mixed reception. Mothers are happy that they can receive a level of payment from their employers to raise their children, and even fathers can benefit from a few weeks paid leave. Businesses have reservations about paying people to do nothing that benefits them and are always concerned with abuse of the system. But we have reached a state of play that, although does not fully satisfy either party, is accepted by employers and parents alike. It is now common practice to hire an interim whilst the mother takes her leave, and accept the father’s weeks off (should he be able to afford to take them at reduced pay) as extra holiday time, knowing that he at least will be back in several weeks.

But on January 17th, Deputy Prime Minister Nick Clegg announced that he will be following plans set out by Labour’s Harriet Harmon to share the parental leave between parents more equally, which he hopes to turn into law by 2015. Mothers can still take at least 20 weeks off, but the remaining weeks, under these proposals, could be shared between parents in ‘chunks’. Although likely to be rejected by our current, mostly Tory, government, the mere suggestion of such a policy can have long term and wide reaching effects, and the implications have clearly not been considered. At Baby Interims, we recognise the stress these changes could cause both to employers and parents, and whatever the outcome of these proposals we will have the best solution for all parties.

In an ideal world, these proposals would be welcomed. But we do not live in an ideal world, and the practical implications of these changes are unpleasant to nearly all parties involved. The most obvious problem lies with the fact that only one parent is able to naturally feed the child, and this if nothing else will mean that whatever the changes mothers will still be taking the majority of the time off.

To all but the biggest businesses, this change will bring many kinds of problems. Hiring an interim for 9 months will no longer be feasible if parents can drop in and out on a 2 week rota. Changing the payroll so often will create even more administration work for businesses already buried in it. It is legally incredibly difficult to demand paperwork from the spouse of an employee, both regarding truth of pregnancy and should this be confirmed, proof of their ‘work rota’, which would most likely lead to abuse. Baby Interims is already looking at ways to minimise the enormous administrative burden on both businesses and parents should this become law.

This will all have a knock-on effect to employment. Young women often find themselves overlooked for jobs as employers fret about their obligations in case of child birth, and should men suddenly face the same we might see an increase of the already substantial unemployment amongst young people, and of discrimination lawsuits against companies. Practical problems are also abundant; a woman can only have one baby at a time (or twins etc.) but a man could have children by several women at once; does he get paid time for each? Is it only the biological father who can take time off?

What will this lead to in business terms? A dramatic increase in short term interim hiring would be first. This is hardly ideal, as training is often required in professional roles and an employer will be in a very difficult situation; debating whether or not ‘wait it out’ or take the financial and administrative hit of following this path. For the interims, working like this does not provide the limited security and stability their work normally provides, but will see an increase in the amount of work available to them, meaning that a good reputation and value will become even more important; Baby Interims’ bank of professionals seek to be largely cost neutral to employers and as we are not employees there is no employment law to worry about!

So is the change right? Not at the moment, but it could be. In Sweden and Norway, frequently cited as two of the ‘happiest’ countries in the world, there is extremely generous shared parental leave of over a year on nearly full pay, with the cost divided between employer and the state. On the other end of the scale, in the USA, in which the citizens pursue a very different ideal of ‘happiness’, parental leave is subject to very strict requirements heavily favouring the employer. But the mindset of our country is different to these. We share the socialist aspects of Scandinavia with the more ruthless American capitalism, for better or worse, and as such our current policy lies in the middle. Unless accompanied by an enormous range of social and business changes, if this should become law the results to the country as a whole will be damaging as we still struggle to rebuild our capitalist system from a financial crisis and the future is still incredibly uncertain.

But on balance, all previous employment law changes from minimum wage to the original maternity leave have had the same reception, and eventually they are accepted, businesses adapt and the world moves on, with employees slightly happier.