‘Career break penalty’ costs each woman £4,000 per year

Very interesting article from the CIPD, government policy needs to do more to help working parents remain in the workplace:

Research estimates two-thirds of professional women face ‘occupational downgrades’ on returning to work

Women returning to the workforce after a career break are losing out on £1.1bn a year, according to a new report – the equivalent to £4,000 each.
Around 427,000 UK female professionals are currently estimated to be on a career break. Two-thirds of these women (around 278,000) could be working below their potential as they take lower-skilled or lower-paid roles, or work fewer hours than they prefer, when they return to work, found the report by PwC, the 30% Club and Women Returners.
The report said recruiters’ bias against ‘CV gaps’, and the lack of flexible and part-time roles available in high-skilled jobs, are to blame.

Three in five women (approximately 249,000) are likely to enter lower-skilled roles when they return to work, with the downgrade causing a reduction in hourly earnings by between 12 and 32 per cent. A further 29,000 women who are returning to part-time work would prefer to work longer hours but can’t because of a lack of flexible roles.

The report, Women returners – The £1 biliion career break penalty for professional women, said addressing ‘occupational downgrades’ could boost this demographic’s annual earnings by £637m, while increasing part-time hours could contribute an additional 14,000 full-time employees to the UK workforce annually, and boost earnings by £423m.

Julianne Miles, co-founder and director of Women Returners, said: “A CV gap presents a significant barrier to resuming a successful professional career after a multi-year break.

“Employers often assume a lack of recent experience equates to a loss of the ability to operate at a senior level. A US study found that managers prefer to hire a less qualified candidate over one who has been out of work for more than six months, as they assume skills have deteriorated, and this recruitment bias is far greater with a multi-year gap. Those returners seeking a part-time or flexible role to combine work with family life also struggle to find a suitable professional opportunity.”

Meanwhile, a separate report from the British Chambers of Commerce (BCC) and Middlesex University found that costly childcare is a barrier to full-time employment for many employees. More than a quarter (28 per cent) of firms surveyed said they have seen a reduction of working hours by staff because of the cost of childcare, while nearly 1 in 10 (9 per cent) have seen employees leave their organisation, according to the survey of more than 1,600 UK business leaders.

A third of companies (33 per cent) said they regard the availability of childcare as a key issue in recruiting and retaining staff.

Adam Marshall, director general at the BCC, said: “Firms across the UK are losing talented staff, often because of the availability and high cost of childcare.

“At a time when economic growth is softening, and skills gaps and recruitment difficulties are hindering businesses, the government should consider the childcare system as part of Britain’s core business infrastructure – in the same way that it thinks of energy, transport or broadband,” he said.

Currently, every three and four-year-old in Britain is entitled to up to 15 hours of free early education and childcare per week. From 2017, this entitlement will be doubled to 30 hours a week.

Almost 40 per cent of the companies said the new plans would help, but the BCC said ministers need to do more.

Marshall added: “As businesses have evolved to become more flexible, government policy should also evolve – to help as many working parents as possible stay in the workplace.”

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