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Small business needs to think big about paid maternity leave (2008)

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Small business needs to think big about paid maternity leave

Author: Elizabeth Broderick

Publication: Sydney Morning Herald, Page 11 (Wednesday, 18 June 2008)


Most small businesses operate in a tight financial environment where solvency can be a day-to-day proposition, so it’s no surprise national workplace reforms cause concern.

I know the feeling. I grew up with parents who ran a small business. Like many children I worked in the family business, starting out with the filing and photocopying and over the years came to be involved in the management of the business. It’s hard work and the dark clouds of higher compliance and regulatory costs are always on the horizon.

It’s also one reason why as a strong advocate for paid maternity leave I’ve always said: any national scheme should not impose a financial or administrative burden on employers, particularly small businesses, who are big employers of women.

But what many small business owners don’t realise, is that a national government-funded scheme will level the playing field with their much larger competitors and that flexible work arrangements present a competitive opportunity.

Currently all employers, both small and large, are under an obligation to provide for 12 months unpaid maternity leave for employees with 12 months service.

Typically, only larger businesses can afford to pay their workers for any of that time. For many small businesses, the costs are prohibitive, particularly when coupled with the costs of recruiting a person to cover for the period of unpaid leave. 

But paid maternity leave greatly increases the likelihood of a mother returning to work. We’ve seen it time-and-time again in the research from companies like General Motors and Westpac that offer paid maternity leave and reap the financial rewards of increased staff retention. Small businesses lose out because they can’t afford to fund it out of their own pocket.

As the head of the Council of Small Business of Australia, Tony Steven, said in his submission to the Productivity Commission Inquiry into Paid Maternity, Paternity and Parental Leave, a government funded paid maternity leave scheme would actually be the great leveller for small business.

In a tight labour market where small companies must compete with larger organisations for staff, a national paid maternity scheme will give a much needed fillip to their efforts to recruit and retain talented and skilled people.

My early experience with small business also taught me that within that small business environment, employers and employees can come together to provide a level of informal flexibility that is much harder to find in larger enterprises. 

Most of the children of my parent’s staff grew up in our small business and had their first employment experiences there. People were respected as workers and carers and flexibility was part of the modus operandi.  

Small and medium-sized businesses that have already implemented paid maternity leave schemes along with other family-friendly provisions report broader benefits, including: lower staff turnover, increased productivity and higher levels of business performance, particularly in sales and profitability, compared with businesses that don’t offer these provisions.

Coupled with the flexibility that many small businesses – particularly family-run businesses –provide for their staff through one-on-one negotiations, a national paid leave scheme can only be good news.

Anyone who would have you believe otherwise is scaremongering.

Different size organisations have different challenges, but to attract and retain the best staff requires employers of all shapes and sizes to value their staff as whole people – as workers, as parents, as carers.

For many family-run operations with loyal staff who have become part of the extended family as well as valued employees, and for the 32 per cent of small businesses now run by women – many of them with their own family responsibilities – this is exactly what they are doing.

With more and more employer representatives including COSBOA, the Australian Industry Group and the Business Council of Australia now singing from the same song sheet in support of a 14 week federally-funded paid maternity leave scheme, delivering anything less is unthinkable.

Small business is the hidden winner here but don’t say it too loudly or the critics will try and wrench it away before you’ve even had a chance to see the benefits.