How Can Our Startup Ensure Employee Retention After Maternity Leave Benefits?

As an HR professional working in an Indian IT startup with a remote workforce and an employee count between 30 and 50, we have encountered a situation involving one of our female employees who is pregnant. While establishing a maternity leave policy to support our employees, we have learned that this particular employee intends to take advantage of the maternity leave benefits provided by our company but plans to leave and join an MNC soon after her leave period concludes.

Considering our startup's current status, being less than three years old and not currently having ESIC (Employee State Insurance Corporation) and PF (Provident Fund) in place, we are seeking a solution to address this situation. We are exploring the possibility of implementing a clause that requires employees to continue working for a certain duration after their maternity leave ends if they have availed maternity leave benefits from our organization.

This proposed clause aims to ensure that employees who benefit from our company's maternity leave policy fulfill their commitment to the organization after returning from leave. By encouraging a reasonable post-maternity leave retention period, we aim to strike a balance between supporting our employees during this important life event and fostering employee loyalty and stability within our startup.

Is there any clause available or any suggestions on what we can do in this situation?

Hi, it is a very common scenario across all private sector companies. Female employees either request an extension of maternity leave beyond 182 days or quit to take care of a newborn baby.

Maternity benefits and retention strategies

Maternity benefits given by employers are as per the Act and are purely statutory. Compelling maternity benefit beneficiaries to work for a stipulated time after resuming work from maternity leave is an act of compulsion. Instead, you may consider planning other retention strategies like a retention bonus or similar schemes that might attract employees.

So, just think about it. From my experience, I have seen many female employees leave the organization to nurture their newborn babies, and this cannot be restricted.

Compliance with PF and ESI requirements

By the way, you should cover all your employees under PF & ESI as per the respective Act requirements.

Thanks for your valuable insight, Lakshmi Narayanan. I really appreciate your response.

Just to share our insights, we are already a remote-based company, providing employees with the facility to work from anywhere with utmost flexibility of time. Here, the scenario is simple: it is understandable that if childcare is required, a mother will obviously leave the job. However, unfortunately, if the person leaves to join a multinational corporation (MNC), it is not the ideal situation for the employer who is trying to provide benefits despite financial limitations as a start-up.

We are just exploring possibilities such as having the person stay with us after maternity leave.

Hi, Understood. Attrition: The biggest challenge across all industries

In spite of a congenial work environment combined with benefits and opportunities for growth, employees tend to leave for a few thousand reasons. Have you analyzed the attrition percentage and the reasons for leaving? If an exit interview is not in place, you may implement it immediately. Being a small organization, frequent one-to-one sessions are also suggested. One thing I don't understand is why post-maternity cases are highlighted. Is it because the majority of the employees are females?

Whatsoever it may be, please analyze all areas right from compensation, whether it is on par with industry norms, to the benefits given by competitors, etc.

Hi, please note that you have mentioned the headcount between 30 and 50.

ESI Registration Requirements

ESI Registration is mandatory if you have 10 or more employees in your organization, which is not obtained.

EPF Registration Requirements

EPF Registration is mandatory if you have 20 or more employees in your organization, which is not obtained.

Both of these are treated as major non-compliances.

Maternity Policy Considerations

For maternity, the policy Act plays a vital role and supersedes policy if the policy does not provide more benefits than the Act, and you need to follow it. There might be a few cases leading to attrition post-maternity, which is common across industries. To address this, you should have a clear hiring and retention process.

Dear Anonymous,

Experts have already answered your query. My thought is regarding your apprehension that post-maternity, the concerned female employee is going to join an MNC. It may be a hypothetical situation or confirmed news. However, offering maternity benefits is mandated by law and doesn't depend on whether a woman employee will rejoin or not. You have to provide it.

It's good that you are thinking about your company. I think, on an informal level or as an HR, you can develop a good rapport with that employee so that she positively decides to come back. Isn't it?

On the other side, prepare yourself for alternatives if you receive her resignation in due course.