Women are more expensive than men to employ…or are they?
It’s an accepted fact of business life – women are more expensive to employ than men. Few like it, most understand the reasons why, but others just insist it’s not true.
Never one to duck away from a challenging issue, Dan Panes (Better Business Extra) looks at how much truth there is in the myth.
I like to think of myself as a New Man. Generally speaking, I’m a sensitive, caring guy, prefer red wine to Stella, read and stopped taking my laundry to my mum’s for ironing several months ago.
I even moisturise.
It’s with this in mind that I politely ask the women in my life – or any that may wish to become part of it in the future – to please not hold what I am about to say against me. I’m only doing my job.
The idea that women cost more to employ than men is probably one of the least talked about, but most widespread opinions in business.
Few people like to go on the record about it – largely through fear of getting a knock on the door from the maternity police.
But this does not stop the thought festering at the back of the minds of business owners and managers as they try and find ways to minimise the cost to their businesses.
Employers and employment bodies have traditionally been shy of undertaking any kind of meaningful study into the costs of women in the workplace.
Despite this, there appears to be a real fear that employing young women can cost a business dearly.
A survey of HR professionals by Croner Consulting suggests that some four fifths of employers instinctively think twice about employing women of ‘childbearing age’ – whatever that might be.
That means the assumption that women are more expensive to employ could be affecting 8 million women throughout the UK.
Even removing the subjective from the discussion, leaving out the whys and the wherefores, answering the simple question ‘are women more expensive to employ than men?’ takes diplomacy to entirely new levels.
I told one (female) business colleague of the frustration of a chemist I had spoken to for this article.
He had hired a woman to stack shelves, only to be told when she reported into work on day one that she was pregnant, and couldn’t lift anything.
He had little choice but to send her home on full pay. My colleague’s instinctive, if not very well thought-out, answer was ‘it’s just common sense, why would you employ a woman to do a heavy lifting job anyway?’
So how does the expense theory stand up to scrutiny?
Women have more time off than men
Perhaps a little surprisingly, they do.
According to government figures, women are a third more likely to be off sick than men.
Rather unhelpfully, there are no official figures for the amount of time taken off, but there can be no doubt that, on this measure at least, women are more expensive to employ than men.
Estimated cost (based on UK median salary of £22,000): £120 per year.
Maternity Pay costs a fortune
Statutory Maternity Pay is 90 per cent of average weekly pay for 6 weeks (£380.77 per week based on UK median salary) and then £123.06 per week for another 33 weeks, paid by the employer – a grand total of £6345.60 per pregnancy.
However, most businesses can claim 92 per cent of that cost back, and smaller businesses can claim back 104.5 per cent.
Estimated cost: £507.65.
And I have to pay holiday pay while they are off
Holiday is accrued while an employee is on maternity leave at a rate of 1.6 days per month.
Don’t’ forget the cost of the company car and mobile phone.
Estimated cost (39 weeks’ maternity leave): £2625.09.
I have to find someone to replace them while they’re away
Well, not necessarily.
Any sensible business owner would try to cope by redistributing work throughout the business.
However, the smaller you are, the more difficult this tends to be, and current rules mean women do not need to commit to when they’re coming back to work, so planning is difficult.
An agency will charge you a finder’s fee of about 20 per cent of a candidate’s salary.
Of course, you could do all the legwork yourself, but it’ll probably cost you about the same by the time you’ve added everything up.
Estimated cost £4,400.
Work that out over a 40-year career (assuming two pregnancies) and that’s an extra cost of around £19800.
Or £495 per year.
Or £41 per month.
Maybe I’ve missed something out – and if I have, I’m sure you’ll let me know – but that doesn’t sound like a lot to me.
You factor in the fact that the average woman gets paid 13 per cent less than the average man, and you could even be forgiven for concluding women are less expensive than men.
© Dan Panes, Better Business Extra (originally published 2005, article updated to 2009 figures)