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Sunday December 2, 2012

Women not at work

Family first: In Malaysia, women participation in the workforce peaks around the ages of 25 to 29, but declines all the way
from there. The main reason for this, says the World Bank, is that Malaysian women have difficulty in reconciling labour
market activities with family obligations. Family first: In Malaysia, women participation in the workforce peaks around the ages of 25 to 29, but declines all the way from there. The main reason for this, says the World Bank, is that Malaysian women have difficulty in reconciling labour market activities with family obligations.

It's smart economics to bring mothers back into the labour force.

IF you think you're too small to have an impact, try going to bed with a mosquito,” the late Anita Roddick, founder of The Body Shop empire once said.

Going by her reasoning, every woman no matter how big or small their position in the workforce has the potential to create an impact in her field or industry.

But what is worrying experts is the fact that there aren't enough women in the Malaysian workforce today.

According to the “Malaysia Economic Monitor: Unlocking Women's Potential” report, at least 500,000 and as many as 2.3 million Malaysian women are “absent” from the labour market.

“The impact of these absent women in Malaysia's talent pool could be as large as the brain drain' of Malaysians who migrate to overseas job markets,” states the report released on Thursday by the World Bank.

Malaysian women, it notes, have the lowest participation rate in the labour market compared with our Asean neighbours or other OECD (Organisation for Economic Co-operation and Development) countries (refer to chart).

It adds that Malaysia's level of labour force participation among women “is the lowest in East Asia and below the level that would be expected given its level of development”.

The report highlights the reverse gender gap in university enrolment more Malaysian women (45.4%) have a tertiary education than men (35.2%).

Additionally, Malaysia is the only country in East Asia with an age-participation profile that declines steadily after early adulthood.

Companies
should
allow
flexibility
in terms of
working hours, and
for them (mothers)
not to be bound by
clocking in at 8am,
and clocking out at
5pm. - Johan Mahmood Merican Companies should allow flexibility in terms of working hours, and for them (mothers) not to be bound by clocking in at 8am, and clocking out at 5pm. - Johan Mahmood Merican

“In most developed countries, the pattern of female labour force participation over the lifecycle tends to show an initial peak in early years, when women enter the labour force, then a decline as they marry and have children, but a second peak as they re-enter the labour force after childbirth,” the report elaborates.

In Japan and Korea, for example, there is a peak when women enter the labour force around the ages of 25 to 29, followed by a drop, and then a second peak when they re-enter the labour force in their 40s.

In Malaysia, however, women participation in the workforce peaks around the ages of 25 to 29, but declines all the way from there.

Which begs the question, why are so many Malaysian women not working?

The main reason, says the World Bank, is that Malaysian women have difficulty in reconciling labour market activities with family obligations.

“Two-thirds of the women in the labour force survey declared that they did not work because they were engaged in housework'. It reflects the fact that women find that they need to stay in the home, primarily due to the need to take care of the children,” says the report, adding that many women find it difficult to balance work and family.

This trend raises a very real concern, particularly if Malaysia is to reach its goal of becoming a high-income nation.

“Malaysia will need to tap into all human resources in the country women and men. Gender equality matters for Malaysia's development primarily because the absent women' represent a skills and brain drain' from the Malaysian workforce.

“With skills shortages being the main bottleneck in Malaysia's path towards a high income economy, women are an under-utilised resource that needs to be harnessed,” the report says.

So what can be done?

At last week's international seminar titled “Towards A More Inclusive Labour Market: Promoting Women's Increased Participation”, Arni Hole, director-general for the Ministry of Children, Equality and Social Inclusion Ministry in Norway, talked about the policies and mechanism which have enhanced and retained women's participation in her country's labour force.

In Norway, 80% of women between the ages of 16 and 66 have gainful employment. Of that, about 70% to 80% work full time.

Norway also has a National Insurance Scheme which is a joint venture between the state, employers, employees and the self-employed, with all parties paying taxes into a sustainable Insurance Fund. (Individual tax in Norway can hover over 40%.)

The National Insurance Scheme covers health insurance for all, sick leave, unemployment benefits, disability benefits, old age care, minimum pension for all (fixed) and even paid parental leave.

Mothers get 47 to 57 weeks of paid parental leave after the birth of a child, while fathers get 12 weeks off.

“The paid parental leave is one of the most important tools to improve women's and men's reconciliation between work life and care for the family,” Hole told participants of the seminar jointly organised by the Women, Family and Community Development Ministry and the United Nations Development Programme (UNDP).

“It is a tool to increase gender equality between the spouses. To have a child is not a woman's issue alone, it is a parental issue,” she said.

But she added that paid parental leave is only a right for those who work, so as to encourage citizens to be active in the workforce.

It is all about a willed political economy “to facilitate most grown persons to have gainful work, realising their potential, earning their income, having autonomy and paying tax back to the common good, and receiving rights and benefits in return”, she said.

She also acknowledged that Norway's GNP (gross national product) would have been 15% lower if women did not work to the extent they have.

“We invest heavily in the family as a core in our social web. No woman (or man) should be left with the impossible choice of either family or career,” Hole said.

On the Malaysian front, TalentCorp chief executive officer Johan Mahmood Merican said a long-term sustainable move would be to have flexible working arrangements for working mothers.

“Companies should allow flexibility in terms of working hours, and for them not to be bound by clocking in at 8am, and clocking out at 5pm. Allowing them perhaps the flexibility of sending their children to school before starting work.

“We're in an age where technology is pervasive. Obviously, there will be times when there are meetings (which calls for them to be physically present at work) but there is a lot of time when it's just writing, or e-mailing, and we embrace technology and allow working professionals to have the flexibility of where they do their work,” he said at the same seminar.

He cited a study by McKinsey & Company titled “Women Matter”, which found that companies where women were the most strongly represented at board or top management level were also the companies which performed best.

In the first study, McKinsey selected 101 companies which published the composition of their governing bodies (mainly large corporations in Europe, America and Asia) across a spectrum of industries.

It found that companies with three or more women in senior management functions scored more highly, on average, for each organisational criterion compared with companies with no women at the top.

It then set out to research whether companies with women top managers also performed better financially.

McKinsey selected 89 European listed companies (with stock market capitalisation of over 150mil) with the highest level of gender diversity in top management posts.

The companies were analysed based on the number of women on the executive committee, their function (a CEO or CFO having greater weight in corporate decisions than a communications manager), and, to a lesser extent, the presence of more than two women on board, or statistics on gender diversity in the annual report.

McKinsey then analysed the financial performance of these companies relative to the average for their sector.

“There can be no doubt, on average, that these companies outperform their sector in terms of return on equity (11.4% vs an average of 10.3%), operating result (EBIT 11.1% vs 5.8%), and stock price growth (64% vs 47% over the period of 2005 and 2007),” the study reported.

When it comes to Malaysian employers, Johan said many complain that the lack of availability of talent is the key constraint in preventing the company from growing.

“So to reframe the issue, we are saying there is a sizeable pool of talent right at your doorstep waiting to be tapped into and optimised if you can embrace this agenda.

“So yes, maybe it requires a little more effort, but there's value in it. The business case is there for it, to put in this extra effort,” he said.

To encourage more employers and the private sector to provide childcare centres, Prime Minister Datuk Seri Najib Tun Razak announced in the 2013 Budget that employers would be given a double tax deduction on expenditure incurred for the provision and maintenance of childcare centres, as well as double tax deductions on childcare allowances provided for employees.

Johan added that TalentCorp has a platform where it can share the best practices of family-friendly working policies through its network with the big multinational companies (MNCs) which are already practising such policies.

“If someone wants to do it, they don't have to do it on their own. They can just contact us, and we can share the network with them people who have standard policies, and they can talk you through it. We want to make it as easy as possible for companies to embrace this agenda if they choose to,” he says.

“It might take a little more effort but, as the World Bank puts it, the promotion of gender equality is both the right thing to do, and it's smart economics.”

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