Why supporting employees to balance paid work and caring responsibilities is smart economics

Why supporting employees to balance paid work and caring responsibilities is smart economics

Speech by Elizabeth Broderick

Sex Discrimination Commissioner and Commissioner responsible for Age Discrimination

American Chamber of Commerce Business Briefing

Shangri-La Hotel Sydney

Monday 22 March 2009, 12pm to 2pm

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Thank you to AMCHAM for the invitation to speak with you today. It is a great pleasure to see so many people here.

I am proud to be speaking here today on the land of the Gadigal People of the Eora Nation.

In my role, I have had the honour of meeting many Aboriginal and Torres Strait Islander women and men. It has been an incredibly inspiring journey where I have learnt enormously and made lifelong friends. Importantly, it has helped me to understand that reconciliation is as much about our own personal actions as it is about broader community or government actions.

Just a couple of weeks back I had the privilege of travelling with two inspirational women from Fitzroy Crossing to the United Nations in New York. They told their amazing story of how women in the community came together to address alcohol abuse and violence by lobbying for a ban on the sale of take away full strength alcohol. The results have been groundbreaking with a 43% drop in reports of family violence and a significant rise in school attendance for children. This was a community that had 13 suicides in 13 months.

The story of Fitzroy Crossing is a testament to the strength and resilience of the Indigenous women of this community. At the United Nations, their story resonated with many women from different corners of the world and inspired and energised many more.

Today, I will be speaking about why it is critical that the current economic crisis be seized as an opportunity to build a cohesive workforce and a strong economy for the long term.

There is now broad international agreement that we are in economic times that the world has not seen for a very long time.

Just last week, the IMF predicted that global economic growth may in fact slow below zero this year. This will be a first in our lifetime for many of us.

Over the last few months much has been said about the prospects of significant retrenchments and rising levels of unemployment.

Much has been said about stimulus packages and interest rates.

However, not much has been said about the fact that beyond this current economic turmoil remains the very critical challenge of a skills shortage driven by significant demographic change. As the Commissioner also responsible for Age Discrimination, I am acutely cognisant of Australia’s ageing profile.

Without a doubt there needs to be a strong focus now on recalibrating the economy. But we cannot lose sight of the medium to long term.

There are two unsettling truths for employers and governments in these uncertain economic times.

The first for employers, is the need to cut costs and for many to be quick about it. Thinking back to my corporate days I am fully aware of these pressures. It may seem the easiest way to do this is by cutting casual and part-time staff and others who have different work practices, to unwind family friendly work policies and policies that support workplace flexibility. Undeniably, this will have a disproportionate impact on women and others with caring responsibilities.

The second truth is that there will be a temptation to pull back from initiatives that may cost money in the short term, but will deliver tangible benefits in the medium to longer term. A national paid parental scheme is just one example of this.

While it is too early to indentify distinct patterns and trends in the Australian labour market as a result of the economic uncertainty, there are definitely many things we do know.

We know in the UK and the US that women are being hit harder by the downturn. In the UK, the redundancy rate for women is rising at double the rate of men.1

In the US, women’s unemployment is growing at a rate faster than men’s and women’s wages have fallen at six times the rate of men’s.2

If Australia follows, as many fear, there are grave short term and long term repercussions.

There are more women in the Australian workforce than ever before. Just in the last 20 years, women’s workforce participation has grown from 48% to 58%. This has added an additional 1.6 million women to the labour market.

In fact, the growth in women’s workforce participation has been a key driving factor for economic growth both in Australia and across the globe. For example, The Economist stated in an article that “the increase in female employment in the rich world has been the main driving force of growth in the past couple of decades. Those women have contributed more to global GDP growth than have either new technology or the new giants, China and India.”3

Women’s incomes have increasingly become an essential part of the family budget. Women’s incomes are paying for mortgages, rent, groceries, trips to the dentist, bills, petrol and school costs. I think we would all agree that these are not expendable discretionary items.

Women’s incomes are critical not only for their own economic security, but also for the economic security of families and importantly, critical for the health of the national economy.

At all levels – at the home front, in the community and for the national interest – women’s incomes matter.

Women’s participation in the paid workforce matters.

Despite the increase in the last two decades, women’s workforce participation remains relatively low compared to men who have a workforce participation rate of around 73%. This is a gap of around 15%.

Women’s workforce participation remains low by international standards. We lag behind many OECD countries including the United States, the United Kingdom and New Zealand. The employment rate of mothers with a youngest child under six years of age is 49.6 per cent, compared with the OECD average of 59.2 per cent.4

Access Economics has recognised the potential economic value of women’s workforce participation to the economy. They have estimated that just closing the gap between women and men’s participation in the workforce would result in an increase of $65 billion in Australia’s national output. If we go one step further an increase the rate of women working full-time we would see an increase of $98.4 billion.5

My point is not that all women should be forced in to paid work but that women’s workforce participation matters! And hence we need to continue to support initiatives that allow women and indeed men to balance paid and unpaid work!

If we are to fully tap into the talent pools available to us and remain competitive in the global market, employers and governments must look at ways to tap into the full productive capacity of women.

Currently women carry the majority of the unpaid caring work, which inevitably leaves less time for paid work. On my national Listening Tour last year, I heard consistently from women and men that the struggle to balance paid work and family responsibilities is a daily battle.

It became clear to me that we need to depart from the traditional model of work built around the ideal worker who is male, able to exceed full time working hours and void of caring responsibilities.

Did you know that a recent report from the World Economic Forum rated Australia as number 1 in the world in educational attainment for women, but number 41st in the world for women’s labour force participation.6 

It would be interesting to calculate the cost to our economy of that appalling leakage of female talent.  If we were running a company where we invested in education and training at the highest level but retained a small proportion of those we trained we would be out of business very quickly.

However, this is not just about women. It is just as much about men. On my Listening Tour last year, I heard that there are a growing number of men who want to take on caring responsibilities, but feel unable to do so. Firstly, because of structural barriers such as the lack of availability of high quality flexible work. And secondly, because of the social pressure to be the primary breadwinner.

I heard from many men who said that although they had access to flexible work, they felt they would be penalised for accessing it. They commented on things such as the ‘look’ they got from other colleagues when they left at 4pm to pick up the kids.

What is clear is that the ideal worker model has never worked for women and is increasingly not working for men. Creating workplaces and social structures that support women and men to equally share care is at the heart of creating a fair and equal Australia.   It is at the heart of progressing gender equality in this country.

I have heard from a number of contacts in recent weeks that employers are cutting back flexible work arrangements as a response to the current economic situation.  This includes eliminating initiatives such as quality part-time or job share arrangements, working from home and leave purchase schemes.  This roll back is in addition to the increasing number of job losses and the reduction in hours being experienced by many.

If I could focus for a minute on the rollback of work practice innovations – I’m talking about innovations that meet the needs of both employees and employers.  It would appear that such moves are short sighted. The reality is that despite the current crisis, we continue to face a period of skills shortage due to demographic change. That is the medium term challenge.  Once the current turmoil blows over, we need workplaces that are well equipped to deal with this challenge.

While, we have seen an increase in quality flexible work practices offered by employers, what I heard consistently on my Listening Tour is that the mere existence of these policies does not mean that they are being taken up.  The rhetoric is not matching the reality.  It’s the 5 day a week job squeezed into 3 days and this is becoming even more common with the economic downturn.  We need flexible work that delivers for both the employer and the employee and this current crisis provides a pivotal point to do just this.

Workplace culture plays an integral role in whether flexible work policies succeed or fail.

What I have heard clearly, is that leadership from men and women, particularly individuals in senior positions, is critical to making high quality flexible work the norm, not the exception. Let me share with you one story from my blog:

We would love it if my husband could also work flexibly to care for our son. I work three days per week in the office; the other two I’m contactable but at home caring for our 1 year old. My husband is a relatively junior member of the management team at his company and while he is keen to change his days, he says that no other male at his level or above works flexibly. A lack of role models means he is not so confident about approaching [Human Resources] or his own manager to talk about the issue. It’s awkward for both men and women, because the time of your life when you’re having kids is also the time when you’re trying to build your career and profile. ... Having role models - who tell the warts and all story - makes a big difference.

Men hold the key to attitudinal change. For this reason, I have been advocating for changes to the federal Sex Discrimination Act to ensure that men have comprehensive protection from discrimination on the grounds of family responsibilities.

I first came to flexible work about 12 years ago.  Some of you will have heard me tell the story of the day it looked like the new area of legal practice which I had been growing and nurturing for 5 years might come to a resounding stop.  I was a partner at Blake Dawson and had grown a group known as the Legal Technology Group, which practised at the intersection of technology and law. 

5 years after the group had been established, I had a day at work where one of my lawyers popped into my office to tell me she was pregnant.  The same afternoon another senior manager came to see me with the same news.  What they didn't know was that I also was pregnant.  And when three weeks later a fourth lawyer joined the mother-to be queue we knew we had a problem.  That was half the entire team that would be out on maternity leave at one time.  As the person in charge of the team I had to find solutions and find them fast.   

With four of the team pregnant we now had a solid business reason to reinvent the way we worked.  We developed a program where the ultimate responsibility for matters rested with the individual, whether or not they worked full or part-time.  And if a flexible worker needed to come in on a non-designated work day and could not arrange child care at short notice, they could bring in the kids. 

They also agreed to carry a mobile phone when away from their home, and to access their e-mail account at least once a day.  I wanted each of our flexible workers to remain just as committed to the firm as they had been before they had their maternity leave, and this meant that they maintained their previous position and level of seniority.  At the heart of each of these arrangements was reciprocity and trust.

We realized early on that we needed support staff who also shared the vision.  That’s when we hired Michelle as a new junior secretary.  Michelle had been a secretary for only 3 weeks but she’d been a nanny for 3 years.  With that experience, we knew we needed her on our team!

Like most of my staff, I had thought long and hard before I decided to have a baby, and deliberately put off the decision until I was 36 years old.

But having taken the plunge I wanted to be both an involved mother and a committed lawyer.  A flexible work arrangement offered me the best opportunity to progress both.  At that time there were no part-time partners and no requests from partners to work part-time. 

I knew that if this arrangement couldn’t be accommodated within the firm I would need to find a job in a different work environment.  I also realized that this request would have to be presented in a manner that showed it would work for both the business and me.  Without that reciprocity it wouldn’t be possible.  So in 1996, I became the firm’s first part time partner. 

We were determined to make flexibility work. As a business owner and people manager, workplace flexibility allowed me to build a supportive and productive environment like nothing else. It built a loyalty among staff that money could not buy.  It enabled me to obtain a return on my investment in education and training.

We didn't set out to change the world, just to make flexibility work in our small team.  But that had some amazing flow on impacts and Blake Dawson is now at a stage where in excess of 20 per cent of the workforce works in a flexible work arrangement.

My example, which is one of many, shows that supporting employees to balance paid work and caring delivers a better bottom line.

It is also worth noting, that as the population ages, flexible work arrangements will also become increasingly important for employees across the life – to support employees caring for elderly relatives and also to support employees who may want to phase in retirement. Supporting older workers to stay in the workforce will be a critical component of meeting the economic challenges posed by the ageing population.

So instead of retreating from work practice innovation, now is the time to move forward.  Reciprocity is the key.  The time to start is now.

Many of you will be aware of the current debates surrounding a national Paid Parental Leave scheme. It is a certainly a hot topic!

There have been a number of concerns raised recently as to whether we can afford such a scheme amidst the current financial crisis. Questions have also been raised about whether the scheme should be taxpayer funded.

My answer to these questions is this: Australia simply can’t afford to continue without such a scheme and such a scheme would be a vital asset to our economy.

We know that Paid Parental Leave will support women’s paid workforce participation. Many employers have reported that Paid Parental Leave increases the number of women returning to work and, in a great many cases, allows employers to hold on to highly skilled, highly trained and highly valued female staff. Employers with paid maternity leave schemes, such as Monash University, GM Holden and other ‘Employer of Choice for Women’ companies, have return to work rates close to 90 per cent.7

Increased workforce attachment for mothers is vital for the economic security of families. In times of economic uncertainty, having parents who share both paid and unpaid work will provide greater financial protection for vulnerable families.

It will also put money in the pockets of families who clearly need it, and who will spend it, while allowing mothers and fathers to care for their child - many of those who don’t have Paid Parental Leave are those who are on low incomes and struggle financially. This is money that would be rapidly spent on the necessities of life, like providing their children with accommodation, food, healthcare and education.

In an uncertain financial environment, Paid Parental Leave is important if we are to maintain productivity and improve our international competitiveness.

Paid Parental Leave is essential for women so that they can take time off from paid work to recover physically and emotionally from childbirth. It is also essential for the health and wellbeing of infants and bonding between new parents and their babies.  On my Listening Tour, I heard horrific stories about women needing to go back to work two days after giving birth out of financial necessity. The health and wellbeing of families is directly related to their economic security.

And finally, the Productivity Commission’s proposal is reasonable and affordable. The cost to the taxpayer is modest by comparison with Australia's current overall spending on family payments. The scheme would increase family-related government payments by only two per cent.

We also know that many employers and small employers in particular can not afford to pay so we must have a government-funded scheme which will protect women of childbearing age from being discriminated against by employers.

As a country, we continue invest a lot of money in educating girls and women and to get a return on this investment we need to ensure that women’s workforce participation does not end when they become mothers simply because our work structures are unable to support them.

As I said earlier, it is revealing that Australia is first in the world in educational attainment for women, but 41st in the world for women’s labour force participation.8

As our Prime Minister said, it is time to ‘bite the bullet’ on paid leave for parents. Taking a long term view, this reform is essential to building a sustainable workforce and strong economy for Australia.

Much has been said about using economic stimulus packages and investment in infrastructure projects to stave off the worst of the global recession. But the solution is not simply more roads, more railways and more buildings. We also need to invest in strong social infrastructure if we are to rebuild a strong and resilient economy.

It is clear that structures to support employers and employees to balance paid work with caring responsibilities should remain a central component of any solution to the current economic crisis.

These are not radical economic and social solutions.  They are what is necessary if we are to build a country:

• where women and men do share power,
• where women are paid on an equal basis with men
• where women and men share care and child raising; and
• where girls and boys do think that any thing is possible

In conclusion, may I encourage you to continue to be bold, to show leadership by innovating around work practice and to use the current economic context to build a more cohesive workforce – one in which both men and women feel able to build their futures in a manner which supports both their economic and social wellbeing.

Thank you.

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