Startups, SMEs reluctant to hire women after improved maternity leave

MUMBAI: A little more than a year since a landmark bill that doubled the time off given to new mothers, start-ups and small businesses appear to be reluctant to hire women. A poll conducted by social media platform LocalCircles, which asked businesses how their company’s hiring has been on gender basis in the last one year, showed that 57% either hired only or mostly male employees. The poll received 2,987 votes from startups and small and medium enterprises (SMEs) across India.Responding to the poll 11% said they hired male employees only, while 46% said they hired mostly male and a few female employees. About 43% said they hired both male and females in equal proportion.“In my view the six months maternity leave law has reduced chances of women's employability,” said Krishna Kumar, founder and CEO of education startup Simplilearn. “Smaller and even mid-sized companies are wary about appointing even well deserving women who really need a job simply because such firms do not have the resources or bandwidth to have a member away for six months,” he added. In March last year, the Parliament approved a bill granting women working in the organised sector paid maternity leave of 26 weeks, up from 12 weeks. The law applies to all establishments employing 10 or more people.“For most small companies and startups it is practically impossible to afford. Even mid-sized startups like us would be shying away,” said Kumar. “How will a small sized startup with 10 employees that is not even sure of its own survival afford it,” he said. Over the last year several startups and SMEs have been reportedly reluctant to hire newly married women.However, Falguni Nayar, founder and chief executive officer of online beauty retailing company Nykaa.com said: “As a firm we are supportive of women who go in for maternity.” “My personal preference is to hold the post vacant for six months. In other cases, we have to recruit (because of the nature of the function) and then when the female employee returns from maternity we find a suitable position which could be a new or same position.”However, she added that for middle to senior management roles that are critical one the company ends up compromising on the pace of growth.India now has the third highest maternity leave, after Canada that grants 50 weeks and Norway that grants 44 weeks as paid maternity leave.Last year, when the amendment to the maternity bill was made, LocalCircles ran a poll and asked if startups and SMEs with either less than 20 employees or less than 10 crores in annual turnover should get an exemption from the new Maternity Benefits act. Nearly 61% respondents agreed with it, 31% voted against it, while 8% were unsure.“I don’t have hard data on this, but going by anecdotal evidence, I find that while start-ups and small businesses do find the six months maternity leave to be a burden, medium-sized enterprises have accepted it and don’t allow the gender tag to come in the way of a good hire,” said Saundarya Rajesh, founder-president of AVTAR Career Creators and FLEXI Careers India, one of the leading diversity and inclusion consulting firms.“In the case of small businesses and start-ups, I find that companies are not rejecting talented women, but merely taking them off rolls. That way, they are not required to pay ESI/EPF or maternity leave. So, while there could be a decrease in women’s employment in start-ups and small businesses, women are dealt a double whammy by their not obtaining statutory benefits,” she added.However, gender experts said the improved maternity leave should be viewed from a long-term benefit perspective to create a diverse workforce.“Companies have to see this as a way of retention of women talent. Else trained and experienced women will leave the workforce,” said Naina Lal Kidwai, chairman of the India Advisory Board of Advent International Private Equity. “For smaller companies and startups it could be inconvenient and a cost but one has to see in the long-term perspective when it will be more expensive hiring new talent (than retaining),” she said, adding that “If you are a hand to mouth startup it could be a challenge but the more mature firms will understand the benefit.”One negative is if the women who take the six months leave and then don't join back, said gender experts.Kidwai said research has shown women tend to be longer tenured than their male counterparts and if companies are able to support their female talent during this crucial life-stage they will be able to retain high potential talent. “In the long run if one compares this cost with the cost of turnover with guys who leave for various reasons the statistics may not be very different,” she added.

from The Economic Times jobs/startups-smes-reluctant-to-hire-women-after-improved-maternity-leave/articleshow/64372836.cms