Business, Innovation and Skills CommitteeWritten evidence submitted by Working Families

1 Introduction

1.1 Working Families is the UK’s leading work-life balance charity. We advise disadvantaged parents and carers about employment rights through our free legal helpline. We research the impact of work on family life and the benefits of flexible working. We also work with employers to create family friendly workplaces and benchmark good practice through our annual “Top Employers for Working Families” awards. Our evidence concentrates on the questions about the impact of the current economic crisis on women, promoting part time work and women’s prospects of advancing to senior levels.

1.2 In Summary:

We are aware of considerable ongoing discrimination against women in the workplace which has worsened in the current economic climate. Changes to state support for childcare costs make it harder for low income women to enter or remain in work.

We recognise that there has been considerable progress in offering flexible working but there are still too many women who cannot enter flexible jobs or obtain a part time role which matches their skills and responsibilities. We recommend that all jobs should be advertised as available on a flexible or part time basis (unless there are sound business reasons why they cannot be) to widen women’s opportunities, and that the right to request flexible working is extended to all employees as soon as possible.

We welcome the attention given to Women on Boards as there is evidence that diversity leads to performance gainsⁱ and the presence of senior role models may help cultural change within businesses. However, without significant changes to how we organise and reward work there will continue to be insufficient numbers of women in the pipeline, ready to take on senior roles.

2 The Impact of the Current Economic Crisis on Female Employment and Wage Levels

Discrimination And Breach Of Contract

2.1 Working Families helpline receives around 3,000 calls and emails a year. During the recession we have seen a rise in the number of calls about discrimination, particularly affecting pregnant women and those on maternity leave. In 2011 eight per cent of our calls concerned maternity discrimination. Callers on maternity leave reported being demoted on their return to work, not being offered their old jobs back, being made redundant or even dismissed because of their pregnancy. The recession appears to be used as an excuse by some employers blatantly to flout employment laws and disregard the protections available in the Equality Act. With women’s unemployment at a 24 year high, many women are not well placed to challenge discrimination at work. Many of those we advise could bring a claim against their employer at tribunal but they are reluctant to take action if it may result in the breakdown of the employment relationship and loss of their job.

A further example of discrimination occurs when women are inappropriately asked about their childcare when looking for work. For example:

A job seeking single parent reported that she felt unfairly treated by potential employers asking how many children she has and what childcare arrangement she has made. While being a single parent is not a protected characteristic, direct or indirect sex discrimination may be behind the employers’ questions. However, it would be difficult to bring a claim and prove that her answers to these questions have prevented her getting a job.

2.2 Women are also significantly affected by employers imposing changes to contracts as a reaction to the recession. Many women callers to our helpline tell us that they are being forced to change their flexible working patterns due to employers reducing headcount and reviewing working practices. Some employers are reverting to traditional working patterns and withdrawing home working or part time options, ignoring the business case that shows greater flexibility can bring productivity gains. We recognise that some changes may be necessary, but parents need time to adapt and amend carefully crafted childcare arrangements. Employers insisting that women with childcare responsibilities work at weekends—when no formal childcare is available—put women in impossible positions of choosing between losing their job and leaving their child home alone.

For example:

A woman caller had worked for a DIY store for several years on week days. She was told that she now has to work some Saturdays—as this is the store’s busiest day. The employer refused to consider recruiting additional weekend staff, and imposed the requirement to change hours to cover Saturdays on all staff. The caller cannot find weekend childcare cover.

Childcare and Employment Rates

2.3 The reduction in the state’s support for childcare has had a serious impact on low income women’s ability to enter and remain in employment. Callers to our helpline refer to the high costs of childcare as a significant barrier to employment, and parents of disabled children are particularly disadvantaged by inadequate provision and higher costs of care for a disabled child. Research by Save the Children and Daycare Trustⁱⁱ found that the reduction of state support from 80% to 70% of childcare costs added an average £500 per year to the childcare bill for half a million families. They found a quarter of parents in severe poverty have given up work and a third have turned down a job mainly because of high childcare costs.

2.4 The high costs of childcare are particularly difficult for women on low to middle incomes. Women callers to our helpline will weigh their own net income against the costs of childcare and decide that it is not “worth” working. We advise women to take a long term view as costs are particularly high when children are young, and to include their partner’s salaries in the calculations. However, finding and paying for childcare remains largely the woman’s responsibility and an inability to access childcare disproportionately affects women.

2.5 Requests for deposits for childcare places and fees in advance, and difficulties in finding any childcare for work in the evenings and weekends also limit women’s employment options. An increase in the use of zero hours and agency contracts disadvantages women who cannot organise childcare at short notice.

Women’s Employment Patterns

2.6 The changing nature of the jobs market has also disadvantaged many women. Forty three% of women work part time (compared with 13% for men). Many women will limit their job searches to part time work, in order to balance their work and caring responsibilities. The recession has seen an increase in part time employment, particularly among men, but many of those now moving into part time work are doing so because they cannot find full time employment.ⁱⁱⁱ This squeezes the available jobs market for women with caring responsibilities. Many women in part time work are in low paid and insecure employment and are particularly vulnerable to job losses and redundancy. Women also comprise two thirds of public sector workers and cuts in public sector employment are likely to have a disproportionate impact on women’s employment.

2.5 Research by the Institute of Fiscal Studies and the Resolution Foundation has identified the increased reliance on women’s work to family living standards: it is women’s work that has helped counterbalance flat wages and falls in income from male employment in recent years. They identify a slowdown in the female participation rate and suggest that “compared to the better and best performing countries, somewhere around 1 million women could be considered missing from the UK workplace. Survey data suggests continuing and substantial unmet demand for work among women”.^iv TUC research has shown that women are a majority of underemployed workers and that the number of underemployed women workers has risen by 40% since 2008.

3 Promoting Part Time Work

3.1 Increasing the availability and quality of part time work is essential to improving women’s employment participation. Working Families proposes three changes to promote more part time work at all levels in the workplace: open up flexible working to all; advertise all jobs flexibly; and equip Jobcentre Plus to work with employers on job design and recruitment. We remain concerned that too much part time work is low paid, and recommend a fresh look at how to provide quality part time employment for women as well as others who cannot work full time (including disabled workers, men with caring responsibilities, and older workers).

3.2 While many studies have pointed to an increase in flexible working offers by employers our research “Time Health and the Family 2012”^v found that less than half of parents work flexibly and that there is a reality gap between availability and take up of flexible working. Evidence suggests that women who can get flexibility in their current roles fare better in terms of pay and prospects than if they have to leave their jobs and seek part time work elsewhere—almost half of women professionals who take up part time employment move into low skill jobs.^vi

3.3 Working Families supports the Government’s proposed extension of flexible working to all employees as one way to speed up cultural change in the workplace and to move flexible working from being seen as “part time” work for mothers of young children, towards being “the way we work”. Our research suggests parents benefit when flexible working is widely available in an organisation, rather than seen as a concession to particular groups.^vii

Flexible Job Entry

3.4 There is a particular problem facing women entering work as few jobs are offered on a flexible or part time basis and the right to request flexible working is only available to those who have been in employment for 26 weeks. Women with caring responsibilities will often limit their job searches to part time or flexible jobs. Research by Women Like Us^viii found that the part time recruitment market is skewed in favour of vacancies with salaries below £20,000 (full time equivalent earnings) with only three% of part time jobs in London advertised at above £20,000 fte. Many women in low paid part time work cannot earn enough to move their family out of poverty on one part time job alone.

3.5 We recommend that all jobs are advertised as available on a part time or flexible basis, unless there is a strong business reason why they cannot be. We recommend that the public sector leads the way in promoting this change. If all jobs were advertised flexibly, women with caring responsibilities would feel able to apply for many more roles, and employers would gain from a wider recruitment pool. Working Families Chief Executive, Sarah Jackson, is chairing a working group for DWP on promoting flexible working to private sector employers. The group is developing a strapline for advertisements encouraging employers to offer jobs flexibly, and allowing potential recruits to discuss their flexible working needs from the outset.

3.6 We recognise that many employers may need help if they are to redesign and advertise jobs on a flexible basis. However, there is limited help available. Jobcentre Plus could play a key role in encouraging employers to think differently about how jobs are advertised and designed. The new “Universal Jobsmatch” to be introduced by DWP in autumn 2012 should be used to prompt all employers to consider whether advertised jobs could be made available on a flexible basis.

4 Women on Boards and in Senior Roles

4.1 Working Families welcomed Lord Davies’ Report “Women on Board” and was pleased to note some progress in the six month report both in more women board appointments, and in the number of companies setting targets to improve gender diversity. However, too few women are appointed to executive board roles and this highlights the need to encourage talent in the “pipeline”. Working Families believes that to achieve the diversity that is lacking at the top of business, the pool of available talent needs to be increased. We are aware that some Working Families’ employer members are addressing retention issues of women in executive posts below board level by exploring part time and flexible roles.

4.2 We support Lord Davies’ recommendation that quoted companies should disclose the proportion of women on the board, in senior executive positions and female employees in the whole organisation. We would also like to see wider job advertising of senior roles to ensure that organisations are fishing from the widest possible talent pool. Transparency may help drive change both from female employees within, and from investors, clients and customers making transactions with quoted companies. Good employers who recognise the importance of diversity understand that clients increasingly want to deal with “people like us”. As women take on more positions of responsibility, so companies need to adapt their personnel to ensure that they reflect their clients’ needs and remain competitive. Good employers also heed the evidence of performance gains that are achieved by companies with more diverse boards.

4.3 However, a closer examination of the talent gap within companies is also needed: structural problems facing women in work must also be addressed. Working Families believes that childcare issues (as identified above) and a lack of flexible working opportunities remain significant barriers to women reaching senior roles. Changes in how work is organised and measured would also help.

Flexible Working

4.4 Evidence suggests women are entering professional roles in similar numbers to men, but many companies lose women before they reach senior levels. For example, while 60% of those admitted to the Law Society are women, only 23% of partners in private law firms are women. An inability to change hours after childbirth can have a negative impact on a woman’s career. If organisations are unwilling to accommodate requests to work flexibly, women may choose to leave their jobs and find alternative employment. However, when they do so, they may have to trade job status and responsibility for family-friendly working patterns. One third of female corporate managers move down the career ladder after having a child.^ix

4.5 Women with childcare responsibilities may find it harder to work long and inflexible hours than men. However, not all women in professional roles wish to work part time to reconcile their work and family commitments. Changes such as working from home, compressed hours and job shares can allow women to remain in their roles without loss of status or money. Too few organisations see flexible working as more than part time working and women requesting flexible opportunities are often offered alternative part time jobs which do not match their skills and experience.

4.6 Even among the top employers there is a need to embed flexible working cultures so that flexible working is not equated with reduced hours and a lack of commitment. Our benchmarking of employers^x found a recognition that flexibility helps to deliver high performance and increase resilience. However, we found employers are better at offering flexibility to mothers than fathers and that half the employers surveyed still look at the reasons for making a request alongside the business case. This creates a risk that subjective or potentially discriminatory practice will determine the outcome of a request. Flexibility should be reframed as working “smarter” and about providing all employees greater autonomy over how, when and where they work. All requests should be considered using the business case as the criterion. We also identified an unmet need for manager training both for those dealing with requests and for those managing flexible workers.

Organisation of Work and Measurement of Outputs

4.7 Working Families research has demonstrated that flexible working can be successful in many senior roles, both in the public and private sector, but one size does not fit all.^xi Our work with law firms^xii shows that changes to working patterns can help retain women in senior roles. For example, offering home working and job sharing opportunities may be more suitable than part time work in transactional roles.

4.8 Employers wishing to embed flexible working cultures need to consider measuring performance differently—by outputs rather than hours worked. Our most recent survey^xiii found family life is negatively impacted by working hours and that a long hours culture in the UK causes stress and resentment. A culture of “presenteeism” disadvantages women with childcare responsibilities.

4.9 Our benchmarking work with top employers has also identified a need to re-examine performance measurement as fewer flexible workers receive the top performance grades than other workers. Research has shown that employers give performance grades for a host of reasons, only one of which is actual performance and that, as a consequence, people with flexible patterns, women in senior grades, people with disabilities and people from minority ethnic groups all do worse in the performance management process.^xiv Tackling how women’s work is measured and valued could go some way to enabling progress to the top.

1 October 2012

References

ⁱ Government Equalities Office website “Research shows that companies with more diverse boards, achieve higher sales and higher returns” http://homeoffice.gov.uk/equalities/women/women-work/gender-equality-reporting/ accessed 26 September 2012

ⁱⁱ Survey by Save the Children and Daycare Trust released 7 September 2011

ⁱⁱⁱ TUC Economic Report “Women and Work” September 2012

^iv Resolution Foundation “The Missing Million: the potential for female employment to raise living standards in low to middle income Britain” December 2011

^v Working Families “Time, Health and the Family 2012” September 2012

^vi Economic Journal Vol 118, Issue 526 “The price of reconciliation: part time work, families and women’s satisfaction”

^vii Working Families and Cranfield University School of Management. Flexible Working and Performance 2008

^viii Women Like Us, Joseph Rowntree Foundation: Building a sustainable quality part-time recruitment market March 2012

^ix Economic Journal as above

^x Working Families “Top Employers for Working Families Benchmark and Awards 2012”.

^xi Working Families: Hours to Suit I and II. 2007

^xii Working Families: Legal Lives Research Report: retaining talent through a balanced culture. 2008

^xiii Time Health and the Family 2012 as above

^xiv Institute of Employment Studies “Equality in Performance Review” 2001