Empowering Gender Diversity Through Maternity Leave Policy

By Ravleen Anand & Amaira Anand

In my two decades of global corporate experience, I have observed how maternity leave policies shape women’s careers and influence gender dynamics in the workplace. Around the world, maternity leave and pregnancy pay policies vary significantly, impacting employment ratios, the gender pay gap, and overall workplace diversity. Here’s a closer look at how these policies play out globally and their effect on women’s career progression, specifically in managerial roles.

Maternity Leave Policies Around the World:

INDIA

• Maternity leave: 26 weeks (paid by the employer).
• Cost: Fully borne by employers.
• Global Gender Gap Index (2023): Ranked 127th.
• Women in Managerial Roles (%): ~20%
• Impact: Extended leave has a positive effect on women’s employment retention post-maternity. However, as employers bear the cost, it can impact hiring decisions, particularly for women of childbearing age, potentially affecting their progression into managerial roles.

UNITED STATES

• Maternity leave: Up to 12 weeks (unpaid, with job protection under FMLA). No national mandate for paid leave.
• Cost: Depends on state laws and company policies; some companies offer paid leave, but there is no federal funding.
• Global Gender Gap Index (2023): Ranked 43rd.
• Women in Managerial Roles (%): ~35%
• Impact: The lack of federal paid leave results in women facing career setbacks and difficulties in climbing the corporate ladder, with fewer women in managerial positions.

SOUTH KOREA

• Maternity Leave Policy: 90 days (fully paid)
• Cost : Fully Borne by Employer
• Global Gender Gap Index (2023): 105th
• Women in Managerial Roles (%): ~19%
• Impact: Employer-borne costs discourage hiring and promotion of women, especially those of childbearing age, contributing to lower workforce participation and a significant drop in senior-level representation.

UNITED KINGDOM

• Maternity leave: 52 weeks (39 weeks paid; 6 weeks at 90% salary; the remaining 33 weeks at a lower fixed rate).
• Cost: Partially funded by the government and employers.
• Global Gender Gap Index (2023): Ranked 15th.
• Women in Managerial Roles (%): ~40%
• Impact: Government support helps maintain women’s workforce participation, which contributes to a higher representation of women in management roles.

NORDIC COUNTRIES (e.g., Sweden, Norway)

• Maternity and parental leave: Up to 480 days, with a large portion paid (Sweden offers 80% of the salary).
• Cost: Funded through social insurance (government).
• Global Gender Gap Index (2023): Sweden ranked 5th, Norway ranked 6th.
• Women in Managerial Roles (%): ~40-42%
• Impact: High government support enables women to re-enter the workforce smoothly, resulting in a significantly higher proportion of women in managerial and leadership roles.

GERMANY

• Maternity leave: 14 weeks (fully paid by health insurance) + parental leave up to 3 years.
• Cost: Combination of government and insurance.
• Global Gender Gap Index (2023): Ranked 6th.
• Women in Managerial Roles (%): ~35-40%
• Impact: Women’s participation in the workforce is supported, leading to a better representation of women in management positions.

Who Should Bear the Cost?

Countries where the government supports part of the leave cost (e.g., Nordic nations) have a more positive impact on gender diversity, pay equity, and employment ratios. In contrast, regions where employers bear the full cost (e.g., India, South Korea the U.S.) often see fewer women in senior and managerial roles, as financial concerns may influence hiring and promotion decisions.

Impact on Women in Managerial Positions: Does Maternity Pay Affect Career Growth?

Study Insights: According to a World Economic Forum study, countries where maternity leave costs are borne by employers tend to have a lower proportion of women in managerial positions, especially during their childbearing years. This disparity can extend well beyond childbearing years, as career advancement for women becomes limited compared to men.

OECD Data: An OECD study indicates that in countries where employers are responsible for maternity pay, only around 30-35% of management roles are held by women. In contrast, countries with government-funded leave see a higher percentage of women in these roles, with some Nordic countries reporting women occupying over 40% of managerial positions.

Corporate Perception: A Lean In and McKinsey report highlighted that women in countries with employer-funded maternity leave are 20% less likely to be promoted to managerial roles within five years of childbirth compared to those in countries with government-supported maternity pay. This is due to perceived cost implications and the stigmatization of maternity leave within the corporate environment.

Gender Gap in Leadership: In regions like the United States, South Korea and India, the cost burden on employers affects hiring and promotion practices. This dynamic has been referred to as a ‘motherhood penalty’ in studies, where women may face career interruptions or slower progression due to maternity-related factors and a perception as a liability to employers, especially during their childbearing years. This mindset creates a persistent gap in leadership roles: while around 50% of entry-level positions are filled by women, the proportion drops to less than 20% in executive roles.

Sweden and Norway’s Example: In Sweden, where parental leave is heavily subsidized by the government, 42% of managerial positions are held by women, as reported by Statistics Sweden. In contrast, countries where employers bear the cost of maternity pay see a stagnation in female representation at higher levels, even decades after the initial childbirth period.

Gender Gaps Beyond Maternity Leave:

Employment Ratios: Nations with government-supported maternity policies show higher employment rates for women, translating into a stronger pipeline for managerial and executive positions.

Career Progression: When the government shares maternity leave costs, the career trajectories of women are less interrupted, enabling more women to reach senior leadership positions and decreasing the gender pay gap over time.

Maternity Policies and Global Gender Gap Rankings

The top 10 countries in the Global Gender Gap Index (e.g., Iceland, Norway) share common elements in their maternity policies: substantial government support and shared parental leave. This structure supports women’s uninterrupted career growth and fosters a more equitable work environment. In contrast, countries ranked lower in the index (e.g., India & South Korea) often place the financial burden solely on employers. This discourages the hiring and promotion of women, particularly into managerial positions, contributing to persistent gender gaps.

Additional Facts Supporting Employer-Borne Maternity Costs’ Impact on Women’s Careers

1. Hiring Discrimination: According to the International Labour Organization (ILO), employers in countries where they bear the full cost of maternity leave are more likely to avoid hiring women of childbearing age due to concerns about productivity loss and costs, directly influencing the number of women promoted into leadership roles.
2. Perceived Setbacks: A McKinsey & Company report found that women in countries with employer-funded maternity leave perceive greater career setbacks post-maternity leave, with 1.5 times higher chances of being overlooked for promotions, resulting in a lower number of women in managerial roles.
3. Return-to-Work Rates: The World Bank noted that women in countries with employer-borne maternity costs face a wage penalty of 7-10% upon returning to work, impacting long-term career progression. Conversely, government-supported leave reduces wage penalties and helps retain women in the workforce.
4. Gender Pay Differences: In countries like South Korea, India, and the United States, where employers bear the primary or full cost of maternity leave, the gender pay gap tends to be wider. The financial burden on employers often results in biased hiring and promotion practices, making it harder for women to progress to higher-paying, managerial roles. Women are more likely to face career interruptions, slower salary growth, and “motherhood penalties” in these regions, resulting in significant pay disparities over time. Conversely, in countries with government-funded maternity leave (e.g., Sweden, Norway), women are better supported in returning to the workforce, leading to more equitable pay and career progression, especially in senior positions.

Women Reservations are not enough.

These insights emphasize the importance of government-funded maternity leave in reducing gender disparities in managerial positions. When companies shoulder the full financial burden, women’s career paths face greater obstacles, limiting their representation in leadership roles.

Incorporating these comparisons and data points paints a comprehensive picture of how maternity policies influence gender diversity, especially in managerial roles. By delving into the nuanced impacts of maternity pay structures, we can better understand the factors driving workplace gender gaps and advocate for policies that support equal career opportunities for women.

References:

1. Global Gender Gap Index (2023) - World Economic Forum https://www.weforum.org/reports/global-gender-gap-report-2023

2. International Labour Organization (ILO) Reports https://www.ilo.org/

3. OECD Study on Maternity Policies and Gender Diversity https://www.oecd.org/

4. Lean In & McKinsey, Women in the Workplace Report https://womenintheworkplace.com/

5. World Bank Report on Wage Penalty Post-Maternity Leave https://www.worldbank.org/

6. Statistics Sweden - Women in Leadership Roles https://www.scb.se/en/