Yahoo Finance Why employers benefit from offering enhanced maternity pay
Having a child is a financially difficult path for many women, more so than for men. Not only are pregnant women overlooked for promotions, they often find it difficult to find a job which pays well and is flexible enough for their childcare needs. And maternity pay is often too low — meaning women have to return to work earlier than planned, regardless of what childcare they have in place, or face struggling to afford basic essentials.
Overall, the outlook can be bleak for women when it comes to maternity pay. But some companies are helping to tackle the problem by offering more generous maternity leave packages.
Recently, Lidl became the first UK supermarket to double the total amount of paid maternity and adoption leave it offers employees, with staff now to be given six months on full pay, up from 14 weeks previously. It has also introduced paid leave for both fertility treatment and pregnancy loss.
Stephanie Rogers, chief human resources officer at Lidl GB, said the company had engaged with staff to find out how they could better support those balancing work and family.
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“Whilst there is always more to be done, these latest enhancements to our Family Leave policies show our dedication to fostering a supportive and inclusive workplace and reinforce our ambition to be a first-choice employer,” she said.
Benefits of generous maternity packages
Two-thirds of businesses now provide enhanced maternity pay above the statutory minimum in the UK, according to a 2021 survey. And experts say there are many long-term advantages from offering "family friendly" benefits.
Noona Nafousi, a careers and leadership expert and CEO at Neo Noor, says that by embracing generous maternity of adoption pay structures leads to a workplace “brimming with top-tier talent”.
“This is where loyalty thrives, driving productivity skyward and anchoring turnover rates firmly in the ground,” Nafousi explains. “This is not just a strategy for attracting and retaining talent, It's an investment in the emotional and mental wellbeing of employees, paving the way for sustained performance and innovation.”
For the employees themselves, it means the joy of welcoming a new child isn't tainted by financial stress. “It creates a situation where parents can focus on their new roles, secure in the knowledge that their financial needs are taken care of,” says Nafousi.
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“It's about dignity. It's a message from the employer, loud and clear: We value you. We respect you.”
Multiple studies have found that feeling valued at work is the key to people working harder. When employees feel like their company genuinely cares, it boosts job satisfaction, motivation and engagement.
“Moreover, the employee comes back to work feeling so looked after by the employer that they end up working harder than ever. It is truly a win-win for both sides,” says Nafousi.
Laura Kingston, director of Leap Career Coaching, highlights that Sweden, Finland and Bulgaria have some of the best maternity benefits. “By creating employee loyalty, it reduces turnover and supports work-life integration,” she says.
“Good maternity packages enhance psychological safety and workplace culture, which is key in creating high performing teams. It is also a great way to improve its reputation and attract talent.”
Impact of poor maternity pay
Sadly, not all companies are offering enough to support their employees. A survey by Maternity Action found that 71% of women worried "a lot" about their finances as a result of maternity leave — and were anxious about affording their mortgages, rent, food and bills.
Ultimately, many businesses lose sight of the long-term gains of maternity leave packages because they’re focused on the short-term costs.
“Others may have a corporate culture that's stuck in the past, failing to prioritise employee welfare, especially when it comes to balancing work and family life,” says Nafousi.
She adds that the problem may, in part, be driven by a lack of understanding of how these policies can transform workplace dynamics, drive success, and enhance productivity and retention.
The effects can be devastating. People going through pregnancy, adoption or new parenthood may already feel vulnerable — and the additional financial stress can have a serious impact on their mental health. A survey of 1,394 mothers found that a quarter had gone without food to feed their children, and 60% had relied on a credit card or borrowed money to make ends meet. A further 58% returned to work before they were fully recovered from the birth due to financial pressures.
Read more: How to navigate career progression as a working parent
“Low maternity packages also contribute to the gender pay gap as women miss out on career advancement and salary increases,” says Nafousi. “It also sends a harmful message that caregiving responsibilities are secondary to professional commitments.”
In the end, generous maternity or adoption pay isn’t just a perk. It's a necessity and a catalyst for change in the workplace. “It’s a stepping stone towards gender equality,” adds Nafousi.
What is Statutory Maternity Pay?
In the UK, Statutory Maternity Pay (SMP) is paid for up to 39 weeks. Mothers will get 90% of average weekly earnings (before tax) for the first 6 weeks, then £151.97 or 90% of average weekly earnings (whichever is lower) for the next 33 weeks.
Not everyone is eligible for SMP, though. Women who are self-employed or on zero-hours contracts have to apply for Maternity Allowance, which is paid at the rate of £172.48 per week — or 90% of your average earnings, if that is less.
Watch: Why do we still have a gender pay gap?
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