Lack of Maternity Leave One Reason Women Opting Out

June 19, 2015 1:59 pm

By Barbara Frankel

Photo by Shutterstock

Photo by Shutterstock

Women are leaving the workforce at the highest rate in almost three decades, creating a huge talent gap.

What’s going on? Why, when so many organizations have made recruitment of women a priority, are these numbers so low?

The reasons, according to several experts, are clear:

  • Lack of good maternity-leave and family-friendly policies at most U.S. companies
  • Continued wage gaps between men and women
  • Continued perception of a “glass ceiling” limiting women’s advancement

The Numbers

Current U.S. labor-force participation for women ages 16 and older is 56.6%, a 27-year low, according to the Bureau of Labor Statistics. The national labor-force participation rate for men and women is 62.9%, the lowest level in 37 years.

The labor-force participation rate is defined as those who either are employed or have looked for a job within the past four weeks.

You would think, with the number of women graduating from college now exceeding men, that women would be flooding the workplace. But the reverse is true, especially for certain demographics of women, especially educated women of childbearing age.

Un-Family-Friendly

The United States is ranked 27th out of 37 developed countries on mandated parental leave. The U.S. rate was among the top 10 in 1990, but has fallen dramatically as other countries have improved their policies. Although the Family and Medical Leave Act was approved in 1993, giving workers, including new mothers, up to 12 weeks of unpaid leave, it applies to just 58% of American workers.

For example, the law doesn’t cover anyone who started their job less than a year before the birth of a child, and it excludes private-sector companies with less than 50 employees.

A Cornell University study found that almost a third of the labor-force participation decline by women in the United States can be attributed to the lack of family-friendly policies, including child-care. Had the United States had the same policies as many of the European countries, the study authors said, women’s labor-force participation would been seven percentage points higher by 2010.

Global developed nations, especially in Europe, are far different. In Great Britain, for example, women receive a year of maternity leave, most paid, and protections for part-time workers who have babies.

There is a downside to the more progressive policies, however. The Cornell authors noted when discussing the European family-friendly laws: “However, these policies also appear to encourage part-time work and employment in lower-level positions. US women are more likely than women in other countries to have full-time jobs and to work as managers and professionals.”

The study notes that more countries are also enabling people to switch to part-time work and most developed nations provide public child-care services, which the U.S. does not.

There are exceptions in the United States. Some companies on The DiversityInc Top 50 Companies for Diversity list, including PricewaterhouseCoopers, No. 3; Accenture, No. 15; and KPMG, No. 18, have instituted more maternity- and paternity-friendly policies on their own, including extended paid leave and very flexible workplaces.

Pay Inequity

The wage gap is also a significant factor in the United States. According to the Pew Research Center, the White House reports full-time working women earn 77% of their male counterparts. There is good news on this number, however. For Millennial women, the gap narrows to 93%.

Pew’s research again finds women in the United States taking more time off for childcare, which impacts their earning power. 39% of mothers said they had taken a significant amount of time off and 42% said they had reduced their hours. About 25% said they had quit the workforce altogether to care for their families.

Where Are Women at the Top?

And finally, the glass ceiling remains. While DiversityInc Top 50 companies have made progress, women continue to lag behind in the top jobs nationally, especially in the line jobs that lead to being CEO.

Senior Women Executives

2005 2015
U.S. (EEOC) 16% 29.2%
DI Top 50 20.3% 31.1%
DI Top for Women NA 47.8%

Best practices such as formal mentoring and sponsorship, executive leadership training for women, increased female participation in high-potential lists and stretch assignments are making a difference for Top 50 companies.

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