Are practices stepping up to the plate and paying out or is it still a choice of your money or your child?
THE GENDER DIVERSITY DEBATE rages on, full of rhetoric on board quotas and International Women’s Day. With statutory maternity changes on the horizon, how many accountancy firms are putting together strong support packages, and which ones are doing the statutory minimum?
Just six of the top 20 firms offer anything above statutory maternity pay.
Seven firms said they provide statutory maternity pay (SMP), while the other seven (Moore Stephens, Mazars, CCW, Begbies, Kingston Smith, MHA MacIntyre Hudson and Johnston Carmichael) either declined to comment or failed to respond.
Indeed, only the six largest firms – PwC, Deloitte, KPMG, EY, BDO and Grant Thornton – have made inroads a maternity pay structure beyond SMP.
Of the big six firms, BDO offers the most impressive maternity pay, followed by Deloitte, EY, KPMG, PwC and Grant Thornton. This is based on an employee’s total wage bill while on maternity, calculated from an estimated annual salary of £45,000 before taking maternity. This figure does not take into consideration the help provided by the firms in assisting women back to the workplace, an area of focus for many practices.
With talent retention and succession planning acute issues for practices, getting to grips with issues such as maternity rights are vital for success.
Accountancy Age asked eight managing partners, at the end of 2013, to make their forecast for the issues they are likely to face in 2014.
Attracting and retaining talent was the “single thing” which the managing partners at Deloitte and BDO anticipated would have the most impact for them, the firms stated when taking part in the Accountancy Age Top 50 +50 2013 Survey of firms.
Bishop Fleming’s managing partner Matthew Lee said in his survey response that “identification and nurturing of future talent remains a challenge”.
“We have had a partner vacancy that we are keen to fill and it has taken almost a year to identify a suitable candidate. While we attract a large number of graduate entrants in many cases they do not have the skills, or indeed the worth ethic, that we seek,” he added.
Clearly as a profession, more could be done to provide maternity benefits as an attractive incentive to some of the 32,000 female accountants employed full-time in the UK.
According to Randstad Financial & Professional, of the 73,000 chartered accountants employed full-time in the UK, 44% are female, while more women than men are entering the profession.
Last year 1,209 women registered as candidates compared to 1,177 men from 1 January 2013 to 31 December 2013. This compares to just 47% of women making up the 5,734 in 2012 at financial recruiters Randstad.
The latest statistics from the Universities and Colleges Admission Service for 2013/14 said that more women than men are applying for financial qualifications with 333,700 of its entrants female. PwC managing partner, Ian Powell, writing for Accountancy Age, said that he believes about 40% of graduates were female and that there is an “abundance of talented women coming through”.
Meanwhile Tara Ricks, MD of Randstad, said: “Over the last ten years, there has been a lot of work done to help organisations understand the links between having a diverse organisation, an inclusive work environment and strong business performance.”
IT would be untrue and unfair to say that maternity benefits are the only way to attract the right female talent, but it is a good place to start. There are several benefits, work-life balance, and nurturing issues, to name a few, that firms must look at to ensure they retain the best talent and help women rise up the corporate ladder.
For instance, one of Deloitte’s senior female tax partners takes two months out of the office in the summer to work from home and spend time with her children.
“It’s all about her clients. She worked with them to make them understand that it didn’t leave a gap. Clients are flexible as well. You can do things in a flexible way,” David Sproul, Deloitte senior partner, told Accountancy Age last October. “There is a point in their career that if they don’t believe they can be successful in a flexible way they will make the choice to go somewhere else.”
Calculating the ROI
BDO recently undertook a study to see just how much money it was haemorrhaging from failing to take better notice of its maternity benefits.
The 12-month review of its maternity package found that the biggest problem was that women returning to work didn’t stick around for long. The average female employee returned for just 24 months or less after maternity. The firm had a retention rate of less than 70%, which meant after all the money the firm had invested in a person, through qualification, or training; the fruits of that expenditure were likely to be reaped by a competitor, or lost altogether.
The firm focused on its return to work options as much as its maternity benefits, offering local maternity co-ordinators, coaching, mentors and a financial package that it believed was competitive in the marketplace. It found that if it had an 85% retention rate of returning mothers, all expenditure on maternity wages and other benefits would achieve a return on investment.
“It is an investment in talent retention,” explains Mark Sherfield, BDO’s chief operating officer. “It is another form of talent retention, like a secondment. Maternity benefits have to be competitive. If firms are going to pay less in that area, I wouldn’t be surprised to see high levels of attrition.”
While the UK works on meeting its target of 25% of FTSE 100 boards occupied by women by 2015, and all firms want to increase their diversity, this is all a step in the right direction, but now it’s time to increase the pace.
These figures are based on an employee earning £45,000. For more detail see below
Full pay £865.38 per week for eight weeks (Circa 3,750.00 per month)
at 25% of base pay plus statutory maternity pay (SMP)
£216.35 plus £136.78 for 18 weeks (Circa £1,530 per month)
Statutory maternity pay (SMP) £136.78 for the remaining 13 weeks (Circa £592.72 per month)
Total estimated wage bill £15,057.52
Full pay £865.38 per week for 16 weeks (Circa £3,750.00 per month)
50% £432.69 for ten weeks (Circa £1,874.99 per month)
SMP £136.78 for 13 weeks (Circa £592.72 per month)
Total estimated wage bill £19,981.12
Full pay £865.38 per week for 18 weeks (Circa £3,750.00 per month)
SMP £136.78 for 21 weeks (Circa £592.72 per month)
Total estimated wage bill £18,449.22
Full pay £865.38 per week for 14 weeks (Circa £3,750.00 per month)
50% £432.69 for 12 weeks (Circa £1,874.99 per month)
SMP £136.78 for 13 weeks (Circa y £592.72 per month)
Total estimated wage bill £19,085.74
90% of average weekly earnings £778.84 per week for six weeks (Circa £3,374.98 per month)
50% or SMP whichever is lower £432.69 for 13 weeks (Circa £1,874.99 per month)
SMP £136.78 for 20 weeks (Circa £592.72 per month)
Total estimated wage bill £13,033.61
Full pay £865.38 per week for 16 weeks (Circa £3750.00 per month)
65% £562.50 for ten weeks (Circa £2,437.50 per month)
SMP £136.78 for 13 weeks (Circa £592.72 per month)
Total estimated wage bill £21,249.22
Statutory maternity pay (SMP) at £136.78 for 39 weeks, total estimated wage bill £9,186.78
Smith & Williamson: SMP plus one month’s salary as a return bonus
Baker Tilly: SMP
Moore Stephens: didn’t respond but must provide SMP
Mazars: didn’t respond but must provide SMP
CCW: didn’t respond but must provide SMP
Begbies: didn’t respond but must provide SMP
Kingston Smith: didn’t respond but must provide SMP
MHA MacIntyre Hudson: didn’t respond but must provide SMP
Johnston Carmichael: didn’t respond but must provide SMP
Wilkins Kennedy: SMP
Chantrey Vellacott: SMP, in the process of reviewing all HR policies
Francis Clark: SMP
The numbers explained:
All figures are based on an employee earning £45,000. Calculations are based on figures before tax. Monthly totals are weeks multiplied by 52 weeks in a year and divided by 12 months in a year to find an estimated monthly figure before tax.
STATUTORY MATERNITY PAY (SMP)
Statutory maternity pay runs for 39 weeks and includes:
• 90% of average weekly earnings (before tax) for the first six weeks.
• £136.78 or 90% of average weekly earnings (whichever is lower) for the next 33 weeks taking the total to 39 weeks. A monthly average would be £547.12
Statutory Paternity pay runs for two weeks and includes:
• £136.78 or 90% of average weekly earnings (whichever is lower) for two weeks.
The question asked of the firms was: What would the maternity/paternity benefit be for an employee earning £45,000 who has been with the firm for five years or more?
A person in this situation would usually earn:
Weekly (before tax) £865.38;
Monthly (before tax) £3,750.00;
90% of average weekly earnings (before tax) for a person on this wage would be £778.84.
This year it is likely that maternity and paternity leave will be shared among parents. The statutory 52 weeks allowed for mothers can be used by the father.
Combined they can have 52 weeks, but when they use that allowance, concurrently or consecutively is being left to the parents to decide, however, the mother must take two weeks maternity just after the birth.
All employees will have the right to request “flexible working” if they have worked for their employer for 26 weeks or more – not just mothers.