Diversity & Inclusion

Overcoming the Motherhood Penalty with Innovative Benefit Design

It’s well established that working mothers experience the ‘motherhood penalty’ including workplace disadvantages around pay, advancement, and benefits.

While one company cannot change this for all working mothers, it’s the responsibility of leaders to make their organizations a place where women want to work and will feel supported, elevated and appreciated. Companies must build company cultures, policies and benefits that strategically support mothers and their evolving needs at all stages of parenthood. These changes can have significant business impact including talent acquisition, retention, increased productivity, and contributions.

The ‘Motherhood Penalty’ in corporate America

If you’re curious about whether the Motherhood Penalty exists, you can ask any mother and hear a resounding yes. Women hold two thirds of this country’s student loan debt and are met with the gender pay gap – still making only 82 cents for every man’s dollar. These barriers are exacerbated for women of color.

For mothers with children, finding childcare that doesn’t eat away at the majority of their paycheck is a major challenge. And unfortunately, most employers are not doing their job to help. In fact, job search engine Adzuna reported a 71% decrease in the number of US employers offering childcare support between January 2023 and January 2024. At the same time, 70% of mothers work full or part-time.

According to BabyCenter, 45% of working moms are considering leaving their jobs because of the cost of childcare. This creates a significant economic loss to employers who lose female talent as well as a loss in productivity, engagement and ability to advance. Not only are the costs for replacing workers significant, but the result could also include a more homogenous workforce, which has proven to be less creative, innovative, and inclusive.

Still, there are promising improvements in other parental support. For instance, the market has shown a steep and increasing movement toward employers offering fertility coverage. Adzuna found a 98% increase in employers offering coverage. There was also a 490% increase in companies with time off for pregnancy loss. However, that still represents the minority of companies and women are changing jobs and taking on additional jobs in order to secure fertility and family building benefits.

How Companies Can Support Parenthood and the Business Reasons Why

We must create cultures that promote flexibility and value contribution, not just hours in the office. Businesses need to continue to break down barriers that hold mothers back from operating at their full potential. For leaders, understanding where to start can be part of the challenge, but there are some areas that HR leaders can look into first to best benefit their teams:

  • Develop family building programs that provide comprehensive support for all paths to parenthood including fertility, adoption and surrogacy and access to clinical resources to support these journeys. In a WIN study, 81% of people said that they feel it is important for an employer to provide fertility benefits and support. Women also said that they find relationships with professionals, such as a nurse advocate, important during their fertility journey. There are many companies available who act as partners to businesses to provide these benefits. WIN, for example, works with companies like Nvidia and ADP, has been in business for more than 25 years and has supported more than 500,000 families on their journeys to parenthood.
  • Implement family wellbeing programs to include all aspects of wellness such as maternal health support, access to doulas, parenting resources, healthy aging for perimenopause, menopause and andropause. With one in three children at risk of experiencing developmental, behavioral, and mental health issues – families need support now more than ever. Family support has demonstrated a 5.5x return on investment for businesses.
  • Design leave and return-to-work policies that embrace part-time and phased in approaches as well as access to an outside coach to make the transition successful.
  • Provide caregiving support and innovative solutions to retain talent and increase productivity such as child and elder care guidance, subsidies, onsite care, paid emergency child care days and employee discounts for child or elder care. This is especially important given that 70% of working parents say they are more likely to choose an employer that provides childcare benefits over one that does not.
  • Give mothers (and parents) control over their schedules. In many cases, talented female workers and leaders are being driven away by the old mindset of their needing to be present in an office and work certain hours. A McKinsey study found that almost half of female leaders cited flexibility as a top reason for job changes. And a whopping 94 percent believed that asking their employer for flexibility would negatively impact their change for a promotion. 94 percent.

The wellbeing of mothers and families is a business issue that has a direct impact on the financial wellbeing of the employer. Supporting family building and comprehensive family well-being is a business imperative that pays dividends for employees and companies. If working women cannot be supported through their family-building journeys, the elimination of the motherhood penalty will never be possible.

Shelly MacConnell is Chief Strategy Officer at WIN.

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