Impact of career breaks
Labour & European Law Review Weekly Issue 497 23 November 2016
According to research published last week, the careers of most professional women take a nosedive after returning to work from a career break.
The study, which was carried out by PwC in conjunction with the 30% Club and Women Returners found that over three in five of the 427,000 female professionals who are currently on a career break are likely to return to the workforce in lower-skilled or lower-paid roles.
The study also found that downgrading women was associated with an immediate reduction in hourly earnings of up to a third depending on whether the woman stayed with the same employer. This was due to a combination of factors, including recruitment bias against employees with a gap in their CV and a lack of flexible and part-time roles available for higher-skilled jobs.
A further 29,000 women who return to the workforce on a part-time basis are underemployed. In other words, they would prefer to work more hours if flexible working opportunities were more widely available.
Taken together, two thirds (or around 278,000 professional women) are likely to end up working below their potential when they return to the workforce.
The study points out that addressing the issue of “occupational downgrade” could have significant personal economic and business gains for professional women working at their full potential, boosting their combined annual earnings by £637 million.
Increasing the hours worked by part-time working women, meanwhile, could contribute an additional 14,000 full-time employees to the UK workforce annually, while boosting earnings to this group by £423 million.
Taken together, the research estimates that returning professionals lose out on £1.1 billion of earnings annually from the career break penalty, equivalent to £4,000 for each woman. The multiplier effect from the increased earnings and spending power of these women (beyond the increase in their incomes) could drive a further increase in output in the UK economy of £1.7bn.
Neil Todd of Thompsons Solicitors said that “this report makes interesting reading and is clear that “there is much more that business can do to get woman back into high quality work after a career break”. This is imperative as the report emphasises to ensure all woman are able to work to their potential.
This will bring considerable economic benefits as well as improving the diversity of workplaces across the country. Key drivers to achieve this are likely to be a different emphasis on how job applicants or returning employees are viewed following a career break and the need for employers to embrace modern flexible working arrangements.”
To read the report in full, go to: http://www.pwc.co.uk/economic-services/women-returners/pwc-research-women-returners-nov-2016.pdf