The Impact of

Maternity
Benefits
on Business and Employment

Maternity Act | Women’s Job Share | Industry Reaction | Impact on Employment

 Table of Contents

1 Preface

2 Executive Summary

4 Overview

10 The Maternity Act

16 Business Considerations

24 Conclusions

25 Research Methodology

26 Methodology for the Computation of the “Impact on Employment”

27 Disclaimer

28 Bibliography and Definitions

The Impact of Maternity Benefits on Employment & Productivity

 Preface

The Maternity Benefit (Amendment) Act 2017 positions India as the third most progressive country – after Canada and Norway
– in terms of enabling women to stay on in the workforce and further their careers, following child birth. By any means a
significant reform the amendment calls for a concerted effort on part of India Inc. to actively engage in the retention of
female talent. The investment employers will make towards this end will go a long way in improving women’s workforce
participation and, thereby, boost national income.

Indian women’s workforce participation rate slumped by nearly 10% – from 36.9% to 26.96% – between 2005 and 2013. Ever
since, this vital statistic has stayed flat and is even showing signs of dipping further. Deep-rooted gender bias is the cause
behind this continued stagnation. As per the research carried out by McKinsey in 2015, this costs India anywhere between 16%
and 60% of its GDP. It is an imperative, therefore, that conditions are set right for Indian women to enter the workforce and
build enduring careers that bring prosperity to themselves and to India.
As with most reforms of such scale though, the mechanics of change are as critical as the reform itself. In order that desired
outcomes take shape we must ensure that stakeholders buy into the journey at the very first step. The well-intentioned
amendment seems to be beset with concerns right at the outset. India Inc. is divided in its opinion on the fallout of the
amendment.

One of the gravest implication in the short –term will be that most employers – especially those in small and medium
enterprises and industries, where there is margin pressures will reduce the intake of women employees as they cannot take
the burden of the benefits onto themselves. It is therefore important that government works out a benefit scheme, rebate or
mechanics that actually offsets the costs for the employers, who can then continue to hire women, without being concerned
about the cost and affordability aspects. It is imperative for us to improve women’s participation in the workforce and that
would require concerted efforts from the government as well as the industry.

Our mission at TeamLease is to put India to work. The endeavour is unfulfilled as long as half the population of India is at a
disadvantage in the talent market. In our quest for enabling a policy environment that furthers Gender Equality and brings
parity for women at the workplace, we have set out to study the consequences – good and otherwise – of the 2017
amendment of the Maternity Act. While we share in the conviction that underlies the step we want to be able to throw light
on the pitfalls along the way as well. As they say, God is in the big picture; the devil is in the detail.

Rituparna Chakraborty
Co-founder and Executive Vice President, TeamLease Services Limited

The Impact of Maternity Benefits on Employment & Productivity 01


Women’s share in the Indian
workforce is at 27%, as of
2017, and shows limited signs
of improvement.
# Other vital parameters of women
in the workforce display glaring
levels of gender disparity.
# The poor statistics mean that,
unlike most other countries, India
does not benefit from the direct
relationship between National
Income and female Workforce
Participation Rate.
The Impact of Maternity Benefits on Employment & Productivity
Executive Summary
Raising the female Workforce The Maternity Benefit (Amendment) Act 2017, which is likely
Participation Rate can to benefit working women across industry, significantly
potentially result in the share of impacts both employers and employees.
women in jobs going up to
# The amendment is aimed at encouraging women, via maternity benefits,
35%, and increase GDP growth to join the workforce and stay, and for employers to derive significant
by 16% to 60%, by 2025. tangible and intangible benefits via women’s participation in the
workforce.
# An improvement in Gender Parity
# Employers in favour of the amendment share a vision for diversity in the
across all states, on a best-effort
workplace and are aware of the correlation between women’s
basis, could result in a new,
participation and business productivity / profitability.
incremental, addition of 6.8 crore
women to the workforce and boost
# Findings from this study indicate that employers believe post-maternity
the total workforce size to 62.8 crore
attrition to be a staggering 56%. Respondents also felt that the
(in place of the projected 56 crore)
amendment would bring this number to 33%, progressively, over the
by 2025.
medium term [1 – 4 years].
# Of the resultant 21.9 crore working
# The post-maternity retention cost (at 80% - 135% of annual salary for each
women (by 2025) those with higher
beneficiary woman employee) is seen as a judicious investment by some
educational qualifications are likely
employers while some others see it as a prohibitively expensive
to occupy professional roles in
proposition.
about 12% to 60% more cases than
men.
# The 100% employer funded model of the act is seen as unviable by some
sections of industry.
02

The benefits for India Inc –
both tangible and intangible
– would accrue over the
medium term [1 – 4 years].
# The short term [up to 1 year]
impact of the amendment is likely
to be positive for the BPO / ITeS,
Ecommerce and IT sectors.
# Aviation, Education, Retail and
Tourism would be negatively
impacted in the short term. The
impact would be mixed for Real
Estate, BFSI and Manufacturing in
the short term.
# The medium term [1 – 4 years]
impact of the amendment would
be positive for Aviation, BPO / ITeS,
BFSI, Ecommerce, IT, Retail and
Tourism, and mixed for Real Estate,
Education and Manufacturing.
The Impact of Maternity Benefits on Employment & Productivity
Executive Summary
The amendment would have a
“high” to “medium” positive
impact in 20 of the 30 states in
India but will likely cause a net
job loss of 11 lac to 18 lac, over
FY 2018-19, for women.
# Female Workforce Participation Rate
and Gender Parity will determine the
nature of impact across all states.
# 10 states will likely have a “medium”
negative impact.
# Sectors that will contribute to job
creation: BPO / ITeS, BFSI,
Ecommerce, Education and IT;
Sectors that are likely to contribute
to job loss: Aviation, Manufacturing,
Real Estate, Retail and Tourism.
# Job loss estimated for FY18-19,
attributable to the Amended
Maternity Act, is at 11-18 lacs for the
10 sectors. If this estimate is
computed for all the sectors in the
industry the job loss number would
be an estimated 1 crore - 1.2 crore
across all sectors.
The net effects of the amendment are likely to be negative,
with a potential job loss of about 1.6% to 2.6% across
sectors, during FY 2018-19, and industry behavior that
ranges from benevolent to manipulative.
# There is likely to be fewer takers for women in the workplace in the short
term [up to 1 year]. The job loss due to the enforcement of the act is likely
to be between 11 lac and 18 lac during FY 2018-19.
# Demand for women in the workforce will improve, over the medium term
[1 – 4 years], if those businesses that are enthusiastic build success stories
for others to emulate.
# Large, professionally managed companies (both private & public sector)
and medium sized public sector companies will actively back the
amendment and are likely to hire more women.
# Medium-sized multinational companies will have the most varied
response – from being advocates of diversity to reducing demand for
female talent.
# Large and medium sized private companies [especially closely held /
family owned] are likely to either maintain status-quo or reduce demand
for female talent.
# Start-ups are likely to reduce demand for female talent.
# SME behaviour [across services and manufacturing] is typically likely to
vary from reduced demand for women to unethical behavior of
reducing the upfront salary for women
03
Overview
# Women in the Workplace

# Female Workforce Participation Rate and GDP

# Female Workforce Participation Rate and Talent Landscape

The Impact of Maternity Benefits on Employment & Productivity 04

 OVERVIEW
Women in the Workplace: The Context

Women’s role in

Share of population: 48.5% [61.6 crore of 127 crore] the workplace

Is marked by poor
statistics across the
board.

The female WFPR

Share of Workforce:
continues on its
downward
trajectory since
2005.
27% [13.8 crore out of 51.1 crore]

In 2017
Historical Trend: Female Workforce Participation Rate, as of 2017

Female Workforce Participation Rate, in %

Share of Formal Employment: 14% [56.6 lacs out of 4 crore] 39
36.9
37
35.4
34.8
35 33.9

33

Share of Informal Employment: 28% [13.2 crore of 33.8 crore] 31

29 28.6
27.26 27.45
26.96 27.11 27.20

95.9% of working women are employed in the informal 27

sector [13.2 crore out of 13.8 crore]

25
1990 1995 2000 2005 2010 2013 2014 2015 2016 2017

Data Source: Labor force participation rate, female, 2017, Worldbank Data Source: Labor force participation rate, female, 2017, Worldbank

The Impact of Maternity Benefits on Employment & Productivity 05

 OVERVIEW
Women in the Workplace: The Demographics
Sectors in Focus: Women’s Share of Jobs, as of 2017 Age and Geographic Profile of Working Women, as of 2017
Aviation
BFSI Rural
34% 22% 17%
BPO / ITES
38% 28%
Sector Percentage of Urban

Women as percentage of
E-commerce
women’s population
Education
39.20%

the workforce
15 - 24 yrs 15 - 24 yrs 25 - 34 yrs 25 - 34 yrs
Age group (in years)
Rural Urban Rural Urban
38.70%

57% 25% 26% 10%

32.60 %

29%

35 - 54 yrs 35 - 54 yrs > 55 yrs > 55 yrs

Women comprise 33% to 40% of the Rural Urban Rural Urban Rural workforce participation is
workforce in four of the ten sectors in substantially higher than urban,
Data Source: IOSR Journal Of Humanities And Social Science, 2017
consideration for the study,26% to 30% and Self-employed and Casual
in four others and less than 20% in the Labour outnumber the salaried
remaining two sectors. Employment and Geographic Profile of Working Women, category by a significant margin.
as of 2017
Number of working women (in crore)
IT
Manufacturing
Sector Real Estate 6 Rural
Women as percentage of

Retail 28.50%
Tourism Urban
5.6
the workforce

4
19.30%

3.6
16.30% 2
1.2 1.3
0.7 0.7 0.4 0.3
27.60% 0
Self Employed Salaried Casual Unemployed
26.26%
Employment Category

Data Source: Individual sector studies by Investindia & IBEF, Statista Statistics and NSDC, 2017 Data Source: Maternity Benefit Bill: Well begun, (not) half-done, DailyO, 2017

The Impact of Maternity Benefits on Employment & Productivity 06

 OVERVIEW
GDP and Women's Participation in the Workforce
Income and Female Workforce Participation Rate: India, as of 2015

Data Source: Harvard Kennedy School, Women and Work in India: Descriptive Evidence and a Review of Potential Policies, Dec 2017
Female Workforce Participation Rate, (India)

Data Source: The Global Gender Gap Report

2017, World Economic Forum

2500
40

Per Capita GDP, USD

2000
30

(Constant rates)
India’s ranking on the
Global Gender Gap Index

1500
87 in 2016 to
20

fell from

108 in 2017

1000
10

0 500
0

1990 1995 2000 2005 2010 2015 Potential GDP Growth

with better Gender
Female WFP GDP Per Capita, Constant US$
diversity [by 2025, with
best-effort based
improved gender parity]
Cross-Country relationship between Income and Female Workforce Participation Rate, as of 2017
16% to 60%
Female: Male Workforce Participation Ratio

10
Lao PDR
Nepal Kazakistan
Australia Data Source The Power of Parity, Advancing
China Women’s Equality in India, November 2015
8
Singapore
Bangladesh Japan
Uzbekistan Philippines
6
Indonesia
Globally, national incomes are
closely related to women’s
4 India workforce participation rates.
However, this phenomenon does
Pakistan not apply to India because of its
poor female workforce
2
participation rate.
7 8 9 10 11
Log GNI Per Capita (2013)

The Impact of Maternity Benefits on Employment & Productivity 07

 OVERVIEW
Women's Participation in the Workforce Changes the Talent Landscape:
Raising Women’s Proportion in the Workforce

Total Workforce 2017 India could potentially add 6.8

crore women to its workforce by Potential Total workforce in 2025
raising the rate of female [most likely scenario]

56 Crore
workforce participation under a
478 best-effort scenario, with
improved Gender Parity ..
416
New incremental addition of women to workforce by 2025
New Incremental addition to workforce 2025 [best-effort scenario with improved Gender Parity]

240
6.8 Crore
210
101

50
Rural

4.7 Crore 2.1 Crore

(Rural) (Urban)
Total Workforce 2017
Urban

Potential Total workforce in 2025

New Incremental addition to workforce 2025 Total Workforce As of 2017 [best-effort scenario]
138
210
110
70 51 Crore 62.8 Crore
37
20

Tertiary / Higher Educated Secondary Educated Primary / Less Educated

( All figures in lacs )
27% 35%
.. And that could, in turn, raise the
proportion of women in India’s

workforce from 27% to 35% 13.8 Crore 37.2 Crore 21.9 Crore 40.9 Crore
(Women) (Men) (Women) (Men)
Data Source The Power of Parity, Advancing Women’s Equality in India, November 2015, TeamLease Analysis

The Impact of Maternity Benefits on Employment & Productivity 08

 OVERVIEW
Women's Participation in the Workforce Changes the Talent Landscape:
What Occupations the New Incremental Additions will go into

Total Workforce 2017

478

416
New Incremental addition to workforce 2025

240
Elementary Craft/ Machine Elementary Senior
210 Occupation Trades Opr Professionals Occupation Officials
101
Tertiary /
Higher Educated 0.54 0.47 -- 0.88 22.6 25.51
Secondary
50 54.1 27.2 6.6 35.3 61.3 15.9
Rural

Educated
Primary /
Less Educated 148.3 40.4 3.9 38.5 4.3 4.6
Estimates for 2025
Total Workforce 2017
Urban

New Incremental addition to workforce 2025

138 Elementary Craft/ Machine Elementary Senior
210 70 Occupation Trades Opr Professionals Occupation Officials
110 Tertiary /
Higher Educated 0.16 0.23 -- 0.52 11.7 7.39
37
20 Secondary
Educated 32.3 20.8 6.2 22.3 25.1 3.3
Primary /
Less Educated 47 12.3 5.4 4.9 0.3 0.1
Tertiary / Higher Educated Secondary Educated Primary / Less Educated
Estimates for 2025
( All figures in lacs )

Women with higher educational

qualifications are seen to
occupy professional roles in
about 12% to 60% more cases
than men.

Data Source The Power of Parity, Advancing Women’s Equality in India, November 2015, TeamLease Analysis

The Impact of Maternity Benefits on Employment & Productivity 09

The Maternity Act
# Provisions

# Implications

# India Inc Initiatives

# Industry Reactions

The Impact of Maternity Benefits on Employment & Productivity 10

 THE MATERNITY ACT
Provisions of the Maternity Benefits Act

Maternity Law Changes, 2017 SUMMARY

Prior to Post- Immediate Impact

Amendment Amendment Employers Employees
Duration of 12 weeks 26 weeks** Notional cost to employer, but medium term Tangible benefits for female employees —
Mandatory Paid [1 – 4 years] benefits in terms of retention and spend more quality time with child and
Maternity Leave a smoother transition for women employees family
when returning to work
Maternity Leave Not Allowed 12 weeks Maternity leave of 12 weeks extended to Encourages adoption and therefore,
for Adoption cases of adoption of a child below 3 months satisfies emotional needs of those keen to
of age adopt.

Work From Home Not Allowed Allowed Employers may need to take decisions on Better work-life balance, and flexible work
formalizing work from home policies hours.

Employers may need to invest in the required Not being present in office circles, could
infrastructure to facilitate work from home mean being left behind when new 'hot job'
options for employees opportunities arise.

Crèche Facilities Not Mandatory Mandatory Employers may need to arrange for crèche Working mothers can stay close to their little
facilities ones even at the workplace.

4 breaks per day may be necessary for child Frequent loss of focus and subsequent time
care lag in catching the rhythm again.

Disclosure to Mandatory Mandatory Employers must ensure that all statutory Employees need to be aware of
Employees benefits details in India are available to entitlements and duties and ensure both of
employees at the time of joining, as well as on these go hand in hand, without conflicts.
a continuous basis

Working women across industry are Health to empowerment– A big picture

entitled to paid maternity leave of 26
weeks (previously 12 weeks). Women WHO recommendation: Improves: Reduces:
in both the organized and Children must be Survival rates of children & Number of women
unorganized are likely to benefit from breastfed for the first 24 their healthy development; dropping out of the
this amendment. weeks mother’s health workforce

Data Source: Radford, Maternity Matters: What India’s Amended Maternity Benefit Act Means for Companies, Nov 2017 & TeamLease Analysis

The Impact of Maternity Benefits on Employment & Productivity 11

 THE MATERNITY ACT
Post-Maternity Attrition– Employer Opinion

Employer Opinion on Post-Maternity Attrition

72% Employers, in general, believe that

Employer Opinion Percentage of respondents
women do not return to the workforce
Return to workforce after a post-maternity; and hence, they think
break and join another that the amendment to the Maternity Act
employer 60% will be very effective in stemming attrition.

Do not return to workforce

50%
Quit while entering their
most productive years, pre-
maternity
Drop out within 4 months of 48%
returning from maternity leave

Phase back programs* bring 9%

down post-maternity attrition

*Phase Back Program: New mothers can transition back into work at a pre-specified, part-time, schedule during the first
few weeks of rejoining, at full pay.

Post-maternity attrition rate is set to fall! A staggering

56% 40% 33% 56%

of women in India do
not return to work
post-maternity

pre-amendment post-amendment post-amendment

(immediate) (medium term: 1 – 4 years)

Data Source: TeamLease survey, April 2018

The Impact of Maternity Benefits on Employment & Productivity 12

 THE MATERNITY ACT
Provisions of the Maternity Benefits Act

The broad Implications for India Inc.

# Businesses looking at spending 1%

or more of post-maternity Some initiatives undertaken by India Inc. to manage ensuing disruption
employee costs in maternity
connect programs

# Improved retention of # Pitfalls: Hiring discrimination,

women and parents – wage/career progression, post
narrows skill gap leave productivity ramp-up
# A host of incumbent and new # The e-commerce
age companies have long had company also
growth maternity leave policies has an option of
(IT, ITeS, Hi-tech R&D one year career
# Promotes gender diversity in # Maternity Leave companies) break, without
the workforce which has a funding is an pay, for new
direct correlation with societal investment India Inc mothers
equity for women would need to make
to improve Gender
# Potentially detrimental to the Diversity
short term [up to 1 year] # A mid-sized IT # An e-commerce major
financial health of start-ups and company engages additionally provides 24
SMEs with women who are weeks of paid leave after
on maternity leave childbirth followed by 4
through a mobile app months of flexible working
which helps with hours
upskilling before
women rejoin

Data Source: The Hindu, Indiatimes, avtariwin , The Economic Times , 2016 & 2017

The Impact of Maternity Benefits on Employment & Productivity 13

 THE MATERNITY ACT
Industry Reaction to the Bill: Those in Favour

Most large sectors cutting across incumbent and new-age businesses:

BFSI Acknowledge that the

financial and opportunity
FMCG/D costs of replacement are
higher than the cost of
E-Commerce retention

REASONS
Food & Beverages Pressure on companies to
position themselves in
favour of diversity
IT/ITeS

Telecommunication

Power & Large companies have an

Energy inherent financial
advantage over smaller
Those in favour of the bill
companies
value the tangible and
intangible benefits of
maternity benefits, but
also recognize that these
Voices benefits will be realized
# Director-HR, Internet company: It is definitely a welcome move and in line only over the medium
with India’s initiatives towards women-led development. The super women term [1 – 4 years].
of today can feel secure and ensure better health and wellbeing.

# Director and Co-founder, Digital Marketing company: The passage of the Bill
aims to emphasize the need for organisations to support women as they
make the transition to motherhood.

# HR Head, Media & Entertainment company: This bill is another step to help
us get closer to a more progressive society.

# Co-Founder and COO of a day care business: Kudos to the Government for
taking this action keeping in mind the overall objective of children's health
and representation of women in the work force.

Data Source: TeamLease survey, April 2018

The Impact of Maternity Benefits on Employment & Productivity 14

 THE MATERNITY ACT
Industry Reaction to the Bill: Those Not in Favour

Start ups and SME’s and sectors with legacy HR practices

Textiles & The entire cost of Maternity Benefits is to be borne by the employer
Garments with absolutely no state funding, unlike in some other countries
Start-ups and SMEs can ill-afford an expense that does not have a
corresponding output over a period of 26 weeks
Leather & Footwear
The cost of replacement could range between 29% (non-managerial
staff) and 46% (managerial staff) of annual salary which can have
REASONS
bottom-line impact
Establishing adequate post-maternity support infrastructure adds to
Construction & business overheads
Real Estate
The probability that employees availing of the benefit may not re-join
the same company is a major deterrent for many employers
Travel & In certain sectors that have continuous and dynamic work
Tourism routines long leaves may be disruptive to business

And closely-held / family run businesses across sectors Beyond the cost and
retention reasons: Gender
bias, exploitative
workplaces, profiteering
and abusive practices
Voices could be reasons for some
# VP-HR of a Garments Export company: The new-age services sector which employers to not be in
opened a large opportunity for women in skilled and intellectual jobs favour of the act.
appear to be the only ones that can afford this change of providing long
leave and the opportunity to work from home.

# Recruitment Manager of a Chemicals Manufacturing company: Brick-and-

mortar industries can neither afford this length of leave nor provide facilities
to work from home. We must focus on needs and customs prevalent locally.

# Entrepreneur, FinTech company: Start-ups, except the generously funded

ones, need to be frugal. We are likely yet to break even, may be incurring
losses, and cannot afford expenses that do not have a direct payoff.

Data Source: TeamLease survey, April 2018

The Impact of Maternity Benefits on Employment & Productivity 15

Business Considerations
# Cost of Post-Maternity Employee Retention

# Sectoral Analysis

# Impact on states

# Impact on Employment

The Impact of Maternity Benefits on Employment & Productivity 16

 BUSINESS CONSIDERATIONS
The Cost of Post-Maternity Employee Retention: Illustrative Scenario

Management 6 months paid leave (+ 2 Paid Liability (Leave Rehiring Budget Cost of Post-maternity
Level Salary (p.a.) months accumulated leave) and Benefits) (12%) Employee Retention
A B = A x 8/12 C = B + 75,000 D = A x 12% E=C+D

Large, Multinational organization [INR 25,000 crore + in annual revenue]

Junior 12,00,000 8,00,000 8,75,000 1,44,000 10,19,000

Middle 40,00,000 26,66,667 27,41,667 4,80,000 32,21,667

Senior 80,00,000 53,33,333 54,08,333 9,60,000 63,68,333

Medium sized, Indian organization [INR 1,000 crore – INR 5,000 in annual revenue]

Junior 5,00,000 3,33,333 4,08,333 60,000 4,68,333

Middle 22,00,000 14,66,667 15,41,667 2,64,000 18,05,667

Senior 45,00,000 30,00,000 30,75,000 5,40,000 36,15,000

All figures are INR

Experience 6 months paid leave (+ 2 Paid Liability (Leave Rehiring Budget Cost of Post-maternity
Level Salary (p.a.) months accumulated leave) and Benefits) (12%) Employee Retention
A B = A x 8/12 C = B + 75,000 D = A x 12% E=C+D

Blue Collar workforce [applicable to all women employed in factories, mines and shops or commercial establishments with 10 or more employees]

0 - 3 years 1,32,000 88,000 1,63,000 15,840 1,78,840

3 - 8 years 2,16,000 1,44,000 2,19,000 25,920 2,44,920

8+ years 3,60,000 2,40,000 3,15,000 43,200 3,58,200

Cost of Post-maternity Employee Retention = Paid Liability (Leave and Benefits) + Rehiring Budget (12%)

Post-maternity retention could cost 80%- 90% of the annual salary in case of white collar employees, and up to 135% of annual salary
in case of blue collar employees.

Data Source: Companies rush to meet creche deadline, Times of India, June 2017, TeamLease Analysis, 2018

The Impact of Maternity Benefits on Employment & Productivity 17

 BUSINESS CONSIDERATIONS
Sectoral Analysis: Benefits and Impact of the Maternity Bill
Representative Benefits
Impact on bottom line
Short term Medium-Term
Sector Tangible Benefits Intangible Benefits [up to 1 year] [1 – 4 years]

Talent Retention > uninterrupted operations in a
Aviation dynamic sector; Better Engagement > consistent
service quality
Talent Acquisition > better workforce scaling;
BPO / ITeS Longer Employee Tenures > lower talent
acquisition cost
Diverse Soft Skills > better operational efficiency /
Real Estate
effectiveness plus emotional quotient
Better women’s representation > more diverse
Ecommerce consumer understanding; Talent Attraction >
addressing tech skills deficit (countering bias)
Education Talent Retention > better quality of course delivery
Talent Longevity > leadership pipeline; Post-
maternity Support > less-stressed workplace Negative Positive
Workplace Diversity > better execution; Post-
maternity Support > better staffing for shifts Positive Positive
Talent Attraction > addressing talent deficit in
Mixed Mixed
an otherwise gender-biased sector
Workplace Diversity > ideation and
innovation; Talent Longevity > building Positive Positive
leadership pipeline with diverse abilities
Better women’s representation > Empathy
Negative Mixed
and care for impressionable children / youth

Talent Attraction > meeting talent requirements Talent Retention > conserving expertise plus
BFSI Mixed Positive
across multiple functions with diverse skills nurturing leadership with emotional quotient
Talent Attraction > addressing tech skills deficit Workplace Diversity > ideation and
Information (countering bias); Workplace Diversity > better innovation, nurturing leadership against glass Positive Positive
Technology problem solving across diverse verticals ceiling favouring males

Manufactur- Talent Acquisition > addressing talent deficit by Skill Diversity > Heterogeneity of (soft) skills in a
Mixed Mixed
ing countering gender bias diversity-poor sector

Talent Acquisition > better workforce scaling; Talent Longevity > developing / conserving
Retail Negative Positive
Better Engagement > more productive workforce consumer insights with different perspectives

Post-maternity Support > smoother,

Tourism Talent Longevity > better delivery effectiveness Negative Positive
uninterrupted operations in a dynamic sector
All figures are INR

The benefits are likely to be realized in the short term [up to 1 year] by new-age businesses; sectors that employ women in large numbers and have
continuous, dynamic, operations are likely to be adversely affected in the short term; the medium term [1 – 4 years] impact is likely to be positive for all
sectors except those with a legacy of male-domination in the workplace.

Data Source: TemaLease survey, April 2018

The Impact of Maternity Benefits on Employment & Productivity 18

 BUSINESS CONSIDERATIONS
Impact of the Maternity Bill on States [Figures as of 2015]

Workforce Gender Workforce Gender

Participation Parity Impact of Participation Parity Impact of
State Rate (Femdex**) Maternity Benefits State Rate (Femdex**) Maternity Benefits
Andhra Pradesh 46.60% 0.59 High-Positive Odisha 18.60% 0.51 Medium-Negative
Arunachal Pradesh 37% 0.5 Medium-Positive Punjab 11.10% 0.59 Medium-Negative
Assam 20.40% 0.47 Medium-Negative Rajasthan 21.50% 0.52 Medium-Positive
Bihar 14.20% 0.42 Medium-Negative Sikkim 32.80% 0.64 High-Positive
Chhattisgarh 54.30% 0.55 High-Positive Tamil Nadu 39.20% 0.6 High-Positive
Delhi 12.20% 0.56 Medium-Negative Telangana 44% 0.59 High-Positive
Goa 24.60% 0.64 Medium-Positive Tripura 31.40% 0.51 Medium-Positive
Gujarat 19.20% 0.56 Medium-Positive Uttar Pradesh 11.20% 0.49 Medium-Negative
Haryana 14.50% 0.53 Medium-Negative Uttarakhand 19.50% 0.57 Medium-Positive
Himachal Pradesh 17% 0.63 Medium-Positive West Bengal 18.80% 0.54 Medium-Positive
Jammu and Kashmir 10.50% 0.55 Medium-Negative
Jharkhand 20.40% 0.46 Medium-Negative
Karnataka 32.70% 0.59 Medium-Positive
Kerala 30.80% 0.67 High-Positive
Madhya Pradesh 17.40% 0.49 Medium-Negative
Maharashtra 33% 0.59 Medium-Positive
Manipur 30.40% 0.55 Medium-Positive
Meghalaya 46.70% 0.69 High-Positive States that rank high on either Workforce Participation Rate or Gender
Parity are more likely to have a positive impact (of varying degree); the key
Mizoram 54% 0.7 High-Positive assumption made in this analysis is that the amendments to the maternity
act will spur societal change.
Nagaland 53.60% 0.52 High-Positive
**Female Empowerment Index (Femdex - a McKinsey Global Institute index) points
to where states stand on gender parity | 1.00 = Perfect gender parity.

Data Source The Power of Parity, Advancing Women’s Equality in India, November 2015, Labor force participation rate, female, 2017, Worldbank, TeamLease Analysis

The Impact of Maternity Benefits on Employment & Productivity 19

 BUSINESS CONSIDERATIONS
Impact of the Maternity Bill on States [Figures as of 2015]

Methodology for computing “Impact” and categorizing states:

# States were categorized as
follows based on the value of
“Impact”

“High-Positive”: States for which the value

of “Impact” was found to be greater than
or equal to 20%

“Medium-Positive”: States for which the

value of “Impact” was found to be lesser
than 20% and greater than or equal to
10%

“Medium-Negative”: States for which the

value of ”Impact” was found to be less
than 10%

# The probable “Impact of Maternity

Benefits” was computed as a
weighted average of Workforce
Participation Rate and Gender
Parity, for each state.

# The resultant values of “Impact”

ranged from a minimum of 5.62% (for
Uttar Pradesh) and a maximum of
39.6% (for Mizoram).

Data Source The Power of Parity, Advancing Women’s Equality in India, November 2015, Labor force participation rate, female, 2017, Worldbank, TeamLease Analysis

The Impact of Maternity Benefits on Employment & Productivity 20

 Business Considerations
Impact of the Act on Employment:
Job creation and Loss by Sector
SECTORAL RESPONSE [OVER THE COURSE OF FY 2018-19]
Aviation BPO/ ITeS Real Estate Ecommerce Education BFSI IT MFG Retail Tourism

IMPACT

% women in the sector 34% 38.7% 16.3% 32.6% 29% 39.2% 28.5% 19.3% 27.6% 26.26%
Awareness of relationship
between women’s
participation and
productivity/profitability

Valuing intangible Moderate Significant Marginal Moderate Significant

Consideration benefits far higher than Job Job Job Job Job
that the costs involved Creation Creation Creation Creation Creation
encourage 1%-2.5% 3%-5% 0%-1% 1%-2.5% 3%-5%
hiring of Seen as a sensitive and
women effective talent
acquisition & retention
strategy

Providing a supportive
ecosystem for women
employees

100% employer -funded

model

Productivity Loss
Consideration
that deter Replacement Cost Moderate Moderate Significant Significant Moderate
hiring of Job Loss Job Loss Job Loss Job Loss Job Loss
women Post-maternity issues of: 1%-2.5% 1%-2.5% 3%-5% 3%-5% 1%-2.5%
Retention
Productivity ramp-up
Support infrastructure
costs
Total number of women in the sectors Net Job
476 3,081 9,682 114 14,494 1,254 1,151 23,266 12,450 2,542 Creation / Loss
as of 2017
Lower limit: Job creation / loss
by end FY 2018-19
-4.76 30.8 -96.82 3.42 0 12.54 34.54 -697.98 -373.51 -25.42 -1,117.18

Upper limit: Job creation / loss

by end FY 2018-19
-11.9 77.013 -242.05 5.70 144.94 31.36 57.57 -1163.31 -622.52 -63.55 -1786.74

All figures are in '000s Job creation will be possible in sectors that can afford to take a long term [beyond 4 years] view;
job losses are likely in sectors where business processes run like clockwork or those with a legacy

of gender bias. The most-likely scenario is a net job loss of 11 lac to 18 lac.
Data Source: Individual sector studies by Investindia & IBEF, Statista Statistics and NSDC, 2017, TeamLease Analysis, 2018

The Impact of Maternity Benefits on Employment & Productivity 21

 BUSINESS CONSIDERATIONS
Impact of the Act on Employment:
In Historical Perspective (Estimates for 2018-19 compared with data from 2016-17 and 2017-18)
Job loss Across
all sectors 50 lac

Job creation
Across all sectors 60 lac

FY 2018-19
Job loss In the 10
sectors covered
by the study
11- 18
lac (estimated)

FY 2017-18

FY 2016-17

Job loss estimated for FY18-19 is at 11-18 lacs for the 10 sectors (Aviation, BPO/ITES,
As per the analysis of different data sources, it is estimated that
Real-Estate, Education, Ecommerce, BFSI, IT, Manufacturing, Retail, Tourism) - this job
loss estimate is attributable solely to the Amended Maternity Act.

The implications -
11 lac
to
# The job loss, estimated for FY18-19 and attributable to the Amended Maternity Act, is
at 11-18 lacs for the 10 sectors. If this estimate is computed for all the sectors in the
industry the job loss number would be an estimated 1 crore - 1.2 crore across all
18 lac
sectors. job losses could occur in FY18-19, across the 10 sectors
(Aviation, BPO/ITES, Real-Estate, Education, Ecommerce, BFSI,
# The 50 Lacs job loss for FY 017-18 is an exception - mostly attributable to IT, Manufacturing, Retail, Tourism) considered for the study. This
demonetization. The absolute levels of job creation / loss for FY 2018-19 (irrespective can be attributed to the Maternity benefits amendment of
of different interventions such as the Maternity Act Amendment) cannot be forecast 2017.
as of today.

Data Source: Center for Monitoring Indian Economy, Labour Participation Hit by Demonetization, July, 2017 . The Wire, August 2017: Why Indian Workplaces are losing Indian Women, World Bank Statistics on Indian
Labourforce, Knowledge Center, June 2017, TeamLease Analysis, 2018

The Impact of Maternity Benefits on Employment & Productivity 22

 Business Considerations
Impact of the Act on Employment:
Do Provisions Encourage or Deter Hiring of Women?

Likely scenarios of industry behaviour

Formal Sector Informal Sector

Benevolent Calculative Manipulative

Increase in the intake of female
talent to champion diversity
Large, professionally
managed companies
(private & public sector)
Reduced demand for female
talent
Corresponding increased demand
for lower cost male talent
Decrease in upfront salary of
female talent aimed at
compensating for future
expenditure – in addition to the
reduced demand for female talent

Medium sized
public sector
companies Start-ups

Gracious
No change in hiring practice sized
[male & female talent]

Small sized public sector

companies

owned]
Encourage Deter hiring of women
hiring of women

With diverse opinions and response expected from different sectors to the impact of the
amendment of the maternity act, the behavior from different sections of industry is expected to
range from legitimate and visionary to unethical and crafty.

Data Source: TeamLease Analysis, 2018

The Impact of Maternity Benefits on Employment & Productivity 23

 Conclusions
India is at a make-or-break juncture of workforce transformation that
could either mean an 8% surge of female talent by 2025 or 1.6% - 2.6%
loss of share of jobs for women, over FY 2018-19.
# Effectively implementing steps to establish gender parity and workforce
participation could result in the surge [8%] and continued / increased
discrimination could result in the loss [1.6% to 2.6%].
Industry is divided in its opinion on the utility and efficacy of the
amendment
# Those taking a long term [beyond 4 years], egalitarian, view and
possess the financial strength to tide over the short term [up to 1 year]
effects of the amendment are in favour of the amendment.
# Those not in favour of the amendment cite prohibitive costs, irreparable
disruption to business operations and post-maternity attrition costs as
reasons.
Employers weigh the short and long term impact [beyond 4 years], while
appreciating the substantial tangible and intangible benefits of the
amendment
# Most sectors derive positive benefits in the long run. New-age
businesses (BPO/ITeS, Ecommerce and IT) are likely to reap benefits in
the short term [up to 1 year]. Businesses that have clockwork-like
operations that cannot be disrupted are likely to have mixed or
negative impact in the short term.
# Sectors that have a legacy of male-domination are likely to see a
mixed impact over the medium term [1 – 4 years]. Business
considerations include post-maternity costs that range from 80% - 90%
in case of white collar employees and up to 135% in case of blue collar
employees.
The impact on states ranges from “High-Positive” to “Medium-Negative”
based on the female Workforce Participation rate and Gender Parity in
each state.
The Impact of Maternity Benefits on Employment & Productivity
The net effects of the amendment are likely to be negative, with a
potential job loss of about 1.6% to 2.6% over FY 2018-19, across sectors
and industry behavior that ranges from benevolent to manipulative.
# There is likely to be fewer takers for women in the workplace in the
short-term [up to 1 year]. The job loss due to the enforcement of the act
is likely to between 11 lac to 18 lac during FY 2018-19 for the 10 sectors
considered as part of the study.
# The job loss, estimated for FY18-19 and attributable to the Amended
Maternity Act, is at 11-18 lacs for the 10 sectors. If this estimate is
computed for all the sectors in the industry the job loss number would
be an estimated 1 crore - 1.2 crore across all sectors.
# Demand for women in the workforce will improve, over the medium
term [1 – 4 years], if those businesses that are enthusiastic build success
stories for others to emulate.
# Large, professionally managed companies (both private & public
sector) and medium sized public sector companies will actively back
the amendment and are likely to hire more women.
# Medium-sized multinational companies will have the most varied
response – from being advocates of diversity to reducing demand for
female talent.
# Large and medium sized private companies [especially closely held /
family owned] are likely to either maintain status-quo or reduce
demand for female talent.
# Start-ups are likely to reduce demand for female talent.
# SME behaviour [across services and manufacturing] is typically likely to
vary from reduced demand for women to unethical behavior of
reducing the upfront salary for women
24
 Research Methodology

Sample Design for the Dip-stick survey:

IT Overview of Research Methodology:

# Workforce and sector job statistics: Secondary
Retail research / literature review

Real Estate # Post-Maternity Attrition, Industry reaction and

Job Creation / Loss likelihoods
BFSI
# Dip-stick surveys with 300 employers
Manufacturing representing the 10 sectors included
in the study
BPO/ ITeS
Education # Impact of the Maternity Act (Net job creation /
loss and industry behavior)
Tourism # TeamLease analysis of sector and
Ecommerce employment data
Aviation
15 21
26
Sample Size (Total Respondents): 27

300 Employers 31

Dip-stick survey methodology [carried out during

32 the month of April, 2018]:
32 # 10 question survey, with objective type, multiple
choice, responses

# Survey administered on sample size of 300

36 employers (refer sample design below)
36
# Results tabulated and inferences drawn on the
basis of the above responses

44

Number of Respondents (Employers)

The Impact of Maternity Benefits on Employment & Productivity 25

 Methodology for the Computation of the “Impact on Employment”

Computation methodology for “Job creation and loss by sector”: Categorization of industry behaviour into likely scenarios for “Do
# The total number of women in each sector, as of 2017, was arrived at provisions encourage or deter hiring of women?”:
based on the total employment and the percentage of women in # Likely scenarios of industry behavior were mapped based on the
employment for each sector, as of 2017. analysis of dip-stick survey responses.

# The effects of maternity leaves on business performance, criticality of # Survey administration on 300 employers involved soliciting probable
continuous operations, cost of maternity benefits, and the incremental scenarios of behavior, by their own and by other businesses, as reaction
job creation rate (per year) were assessed for each sector. to the MB Act Amendment.

# Based on the above factors, the 10 sectors were categorized into those # Responses were analyzed and different categories of businesses were
that would create jobs and those that would cause job losses placed within the probable scenarios of behavior they were likely to be
a) in marginal proportion (0% - 1%), in.
b) in moderate proportion (1%- 2.5%) and
c) in significant proportion (3% - 5%) – as a result of the Maternity
Benefits Act Amendment.

# The job creation / job loss values for each sector was then computed
by multiplying the total number of women in each sector by the
respective proportion of job creation / job loss as per the category
each sector belonged to.

The Impact of Maternity Benefits on Employment & Productivity 26

 Disclaimer

All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by TeamLease Services
Limited. Analytical methodologies are solely and exclusively owned by TeamLease Services Limited. These constitute intellectual
property and may not be reproduced, wholly or in part, in any material form, modified, or in any manner communicated, to any
third party except with the written approval of TeamLease Services Limited.

This report is for information purposes only. While due care has been taken during the data collection, analysis and compilation of
this report to ensure that the information is accurate to the best of TeamLease’s knowledge and belief, the content is not to be
construed in any manner whatsoever as a substitute for professional advice. The study is primarily based on secondary research
and dip-stick surveys and is to be read in context. TeamLease do not assume any liability or responsibility for the outcome of
decisions taken as a result of any reliance placed on this presentation.

TeamLease shall not be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user
due to any reliance placed or guidance taken from any portion of this report.

The Impact of Maternity Benefits on Employment & Productivity 27

 Bibliography and Definitions

# Labor force participation rate, female, 2017, Worldbank Timelines:

# Short Term: up to 1 year
# IOSR Journal Of Humanities And Social Science, 2017, IOSR Journals
# Medium Term: 1 – 4 years
# Maternity Benefit Bill: Well begun, (not) half-done, 2017, DailyO
# Long Term: beyond 4 years
# Harvard Kennedy School, Women and Work in India: Descriptive Evidence and a Review of Potential
Policies, December 2017

# Maternity Matters: What India’s Amended Maternity Benefit Act Means for Companies, Nov 2017, Radford

# Highlights of Maternity Benefits (Amendment) Bill 2016, The Hindu, 2017

# Ikea India Announces 26-Week Parental Leave For Men, Women, Surrogate & Single Parents, Indiatimes,
2017
Organized Sector:
# WHAT WILL MAKE YOU A TOP 10 BEST COMPANY FOR WOMEN IN INDIA?, avtariwin , Jan 2017
# Comprises of businesses that are
# An app to help all mothers going on maternity leave at Mindtree , The Economic Times, December 2016 systematically run and compliant with
government regulations pertaining to
# Industry Reaction on the Maternity Benefit (Amendment) Bill, 2016 | India, 2017 , World HR Diary Bureau land, labour, machinery, investments
and taxation.
# Plenty wrong with the new maternity Bill, 2017, The Hindu Businessline

# Cos rush to meet creche deadline, June 2017, The Times of India
Radford , Maternity Matters: What India’s Amended Maternity Benefit Act Means for Companies, Nov
2017

# The Global Gender Gap Report 2017, World Economic Forum

# The Power of Parity, Advancing Women’s Equality in India, November 2015

Unorganized Sector:
# Individual sector studies by Investindia & IBEF, Statista Statistics and NSDC, 2017 # Comprises of businesses that are run
without due registration / recognition by
# Center for Monitoring Indian Economy, Labour Participation Hit by Demonetization, July, 2017. The Wire, the government and are generally non-
August 2017: Why Indian Workplaces are losing Indian Women compliant with regulations pertaining to
one or more of the following – land,
# World Bank Statistics on Indian Labourforce labour, machinery, investments and
taxation.
# Knowledge Center, June 2017

The Impact of Maternity Benefits on Employment & Productivity 28

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