Startups and small firms hire fewer or no women to save on maternity costs

While the world marked International Women’s Day on March 8 with events, functions, and posts on social media acknowledging and celebrating the equal role of women in all spheres, a recent survey has found that 49% of Indian startups or small firms have hired fewer or no women employees in the last 12 months to save on maternity costs.

Yes, you read it right! 

Even now, employers continue to treat pregnancy and maternity as a “burden” to be borne by employees. 

The poll conducted by a social media platform LocalCircles asked businesses how has the new maternity law impacted their hiring decisions in the last 12 months.

Ever since an amendment made to the Maternity Benefits Act in March 2017 doubled the maternity leave given to new mothers from 12 weeks to 26 weeks, early-stage startups and small companies have been found reluctant to hire women. 

They prefer hiring men to a great extent to avoid the “burden” of maternity.

While the law benefits women as they are provided with more time to take care of their infant babies, small businesses are feeling the heat and the pressure of this amendment due to the added financial burden on them.

The poll received over 8,500 votes from startups, SMEs, and entrepreneurs across the nation. And It revealed a disappointing picture. 

While 33% did not hire women at all in the last 12 months, 16% said they hired fewer women than in the previous year. 

Also, 33% said they hired the same number of women as in the previous year and a mere 18% agreed to have hired more women this year. 

The survey quoted the small firms or SMEs as saying that the cost incurred on maternity leave is an additional burden on them. Therefore, companies with an annual turnover of less than Rs 10 crore must be exempted from the six-month paid maternity leave policy, and instead offer women three months paid leave. 

Nearly 37% of respondents said it should be 3-month paid leave and 44% said to keep the 6-month paid leave law unchanged. 6% said it should be a month’s paid leave, another 6% voted to have no maternity leave allowance in the company. 

If we look at early-stage startups with a team size of around 10 employees, it often becomes a balancing act for the management to plan their team diversity but we also cannot deny the fact that it is equally unfair on women employees as well who remain devoid of leadership opportunities in companies and face unfair parenting policies. 

With the debate on parental leave policies heating up, it is high time that all firms promote gender equality in their workplace and introduce parental leave policies and a suitable workplace environment for new parents.

Last year, Zomato had begun giving its employees 26 weeks of parental leave, joining the league of some established names offering the same benefit.