MUMBAI: India’s leading companies seem to have shrugged off any immediate fears of a drop in female recruitment in the wake of the Maternity Benefits (Amendment) Act passed in March last year that increased paid maternity leave from 12 to 26 weeks. Some experts suggested the effects could be adverse further down the economic scale. The amendment also required establishments with more than 50 employees to have a creche for working mothers. After growing at 11% for the previous two years, the total number of permanent women employees in 32 Nifty companies grew at 5% in FY18.However, that contrasts with total employee numbers rising 3.7% during the year, following on from 3.5% and 7.9%, respectively, in the preceding two years. Workforce reductions in IT and banking, both large recruiters of women, have impacted female employee growth numbers. But the overall diversity ratio of these Nifty companies has steadily improved in the past four years from 22.7% in FY15 to 25.5% in FY18.The focus on improving diversity appears to be outweighed by concerns about the higher costs of recruiting women at large Indian businesses. Only four — Tech Mahindra, Bharti Airtel, Zee Entertainment and Adani Ports — of the 32 Nifty companies reported a drop in their diversity ratio over the past four years. “It is too early to assess whether maternity leave has had an impact on women’s hiring,” said Lohit Bhatia, CEO of the staffing division of Quess Corp. “For large companies, sustaining gender diversity would be key.” Bhatia said banks and IT companies have not added many women to the permanent rolls “but my fear would be the lower strata of economy — the cost-conscious SMEs (small and medium enterprises) and small private companies — may avoid hiring women and their informal employment might get impacted”.65630844

Impact on Smaller DeptsTeamLease had said in a recent report that the net effects of the maternity law amendment are likely to be negative with potential job losses of 1.6-2.6% across sectors in FY19, and industry behaviour that ranges from benevolent to manipulative.While large, professionally managed companies in the private and public sector and medium-sized, state-owned firms will actively back the amendment and hire more women, large and mediumsized private companies are likely to maintain the status quo or reduce their intake, the report had said. Startups and SMEs are likely to also reduce hiring, the report said. The post-maternity retention cost (at 80-135% of annual salary for each beneficiary) could be seen as prohibitively expensive by some firms, it said.For large companies, implementing the changes doesn’t translate into a big cost. “Even before the amendment, companies used to grant maternity leave without pay for a period more than three months,” said the human resources head of a banking and financial services company. “The new law has just made the arrangement more structured.”According to industry professionals, the adverse impact of the new law can be felt in smaller departments such as finance, accounts legal and secretarial that have three-four employees who may not be easily substituted or in the case of companies that are in a stable phase rather undergoing rapid change through expansion. “It may be a case of what economists call ‘revealed preferences’ — a slowdown in hiring women due to the costs involved,” said TeamLease founder Manish Sabharwal.“Bigger companies have higher productivity, hence are more likely to be amenable to comply with the Act but the same is not the case with the informal sector.”