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EAMA - Engineering & Machinery Alliance Press Release

Wednesday 19 October 2005

 

Family friendly plans likely to double cost to SME manufacturers
EAMA report shows ideal for the family is already tough for the SME

 

A month-long survey of manufacturing companies concludes that each maternity leave case could in future cost the manufacturing SME double the current £5 - 14,000 involved in getting replacement cover.

Currently firms use all sorts of tactics to lessen the impact of the absence on the business, such as taking on temporary workers, sharing work amongst existing staff, training and changing work procedures.

Paternity leave is far easier to handle at the moment because it is much shorter, currently just two weeks. But when the government’s plans become reality, companies may well have to redouble their efforts.

These findings are part of an analysis undertaken at the request of seven manufacturing trade associations on the five policy proposals it is promoting to improve work/life balance and support families with children or others to care for.

The government’s five proposals are: to extend paid maternity leave to nine months and then twelve, give mothers the right to share their leave entitlements with the child’s father; extend the right to flexible working and get mothers who are on leave to inform their employer earlier about their return to work date.

The EAMA report entitled “Turning a good idea for the family into a practical idea for manufacturing employers” looks at each proposal in turn, from a general manufacturing perspective and then by size of company having established a benchmark for current practice.

Based on companies’ actual experience, EAMA’s report concludes that the proposed longer term extensions could cost small companies £10 – 28,000 a year per case, depending on the skills set required. In addition it will create problems with existing employment law in two ways.

EAMA’s chairman Graham Hayes points out that SME engineering and manufacturing companies are not popular career path choices for young women leaving university. “In fact the typical employment profile for most SME companies in the sector isoverwhelmingly male, and beyond childbearing age. I can see that many companies will feel that this additional complexities force them to carry on recruiting in a similar vein. It’s an unfortunate fact of life.”

The second unintended consequence under current employment law is that the 12-month extension will enable temporary workers to claim permanent employment status.

Overall, the report shows that six in ten companies affected by maternity leave have to take on a temporary worker for the period. Amongst small employers (with less than 50 people) this rises to three in four firms.

Amongst all companies taking part in the survey, the extension of maternity leave to 12 months is seen as having the biggest impact on business. However when the data are de-aggregated by company size, EAMA concludes that large manufacturers are much more concerned about the extension of flexible working rights to parents and carers.

There is little understanding just yet as to how transferring some of the mother’s leave entitlement to the father would work in practice and ‘companies therefore find it difficult to assess what sort of an impact that proposal will have on their business’, says the report.

Not all the impacts are business negative. The government proposes that new mothers should give earlier notice of the date when they will return to work. Over 80% of firms see this as making a difference, albeit overwhelming a small one.

Copies of the report can be downloaded from EAMA’s website www.eama.info

(ends)

Notes to Editors:

  1. The seven EAMA member associations are:
    British Automation and Robot Association (BARA); British Turned Part Manufacturers Association (BTMA); British Paper Machinery Suppliers Association (BPMSA); Gauge and Toolmakers Association (GTMA); Manufacturing Technologies Association (MTA); Printing, Publishing and Converting Suppliers Association (PICON); Processing and Packaging Machinery Association (PPMA)