Business model examples

Smp - Statuory Maternity Pressure?

Description:

April 2007 sees an increase in the length of time a company pays Statutory Maternity Pay rise from 6 months to 9 months. With the Government planning a further increase to 12 months by 2010 we ask what will the effect be on SMEs in the UK and on the femal employees themselves.

Content:

SMP - Statutory Maternity Pressure

How many SMEs could afford to pay for an absent employee for a full 12 months, and possibly pay for a temporary replacement too? Well that’s what they may have to do.

As of 1st April 2007 women on maternity leave are entitled to 39 weeks leave on Statutory Maternity pay which is payable by their employer and the government has stated its intention to increase this to 12 months by 2009

Whilst the sentiment behind this is admirable, the affect this could have on SMEs is far from it.

The concern is that small businesses will think twice before employing a woman of child-bearing age because of the financial implications. Not only would they have to cover the annual salary of a female worker, but possibly even pay the same again for a temporary replacement.

There is not doubt, that if a woman should wish to take time off work to be with her offspring she should be helped to do so, but should the financial burden of this responsibility fall solely onto her employer?

What position will it leave her in, if under the sheer weight of that financial burden her employer has to close the business? This may sound melodramatic, but consider the cost of paying someone who is not doing the job you are paying them to do and it becomes all to real. Worse still, are we going to see less and less women of child-bearing age being employed in the first place?



Now imagine, this female worker decided to extend her family even further during her 12 months fully paid maternity leave, the business owner could then find themselves in a position where they are paying for an employee and her replacement for 24 months!

Nicky Nelson of Crystal Clear Virtual Assistants says “I have no doubt at all that the financial burden of paying female workers extended maternity pay has had an effect on SMEs employing women. As a mother myself, I made the decision during my time as an employee to leave work to spend time at home with my young child, and that affected our quality of life financially. However, as a small business owner myself, I can fully understand why companies are choosing to use services such as ours which mean they can avoid this costly scenario, a scenario in fact that some small businesses simply could not afford to bear”.

It is estimated that there are 4.4 million SMEs in the UK, the majority of who employ between 1-4 employees. The effect of a pregnant worker could be phenomenal for these SMEs.

Author: Nicola Nelson

About Author:

Nicky Nelson a mother of 3 and business owner runs a Virtual Assistants Company in North Wales, close to Chester.

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