"We need to be above the minimum because we want to make sure we attract and retain the best quality talent we can" ... IAG chief executive, Mike Wilkins. Photo: Andrew Quilty
ONE of Australia's biggest companies will pay the equivalent of 20 weeks' parental leave including a bonus payment for the first six weeks on returning to work, as part of efforts to keep more of its women staff in senior roles.
The move by Insurance Australia Group, which has one of the most generous private sector maternity leave programs, is expected to put pressure on other big banks and insurers to review their schemes.
IAG, which sells insurance under the brands of RACV, NRMA and CGU, has also promised pay reviews for women on parental leave to ensure they don't fall behind.
The IAG move comes amid signs of division within Coalition ranks about leader Tony Abbott's proposal for a 26-week fully paid parental leave scheme.
Forecast to cost $3.3 billion a year, Mr Abbott has said his program would be funded mostly by a 1.5 percentage point increase in company tax for the largest firms.
But IAG's chief executive, Mike Wilkins, said business was finding its own solution.
"We need to be above the minimum because we want to make sure we attract and retain the best quality talent we can," Mr Wilkins told the Herald.
"Yes it's generous, but we're a business and it is about making sure we get quality people coming back to us."
IAG's scheme, which will be outlined to staff this morning, provides 14 weeks' fully paid leave. It will also pay women employees double their full salary for the first six weeks on returning to work.
The bonus is often used in Europe as an incentive for women to return to the workforce but is rare in Australia. Mr Wilkins said the program was designed to overcome the significant financial demands such as childcare or carer costs that often accompanied women returning to work after having a baby.
The IAG scheme is on top of the government's parental leave policy of up to 18 weeks support paid at the minimum wage.
Union groups yesterday welcomed the move by IAG, saying it sent a strong positive message about the importance of retaining women in the workforce by providing incentives.
"This is the sort of initiative we would like to see more employers embrace in the same spirit, not just in the finance sector but throughout the economy," an ACTU spokesman said.
In Australia, banks and insurance companies on average pay staff 13 weeks maternity leave.
Given the cost of recruiting and training employees, Mr Wilkins said he expected the IAG program would be "cost neutral" for the company.
About half of the insurer's 9000-plus Australian workers are women, although this is skewed to part-timers.
Others have been grappling with how to bring experienced staff back into the workforce. ANZ bank recently introduced a $4000 childcare allowance for women returning to work from maternity leave.
A recent study by the Australian Institute of Management concluded inflexible work hours as well as a lack of childcare support were among major contributors to women being under-represented in senior positions.
IAG has also outlined a commitment to having a third of its senior management ranks filled by women by 2015, compared with 28 per cent at present.
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