The Insurance Australia Group (IAG) offered on Monday a generous package, called The Welcome Back Payment, to Australian mother who would go back to work after birth. IAG promised to double the wages for the first six weeks after they return to work.
It is part of a 20-week paid maternity leave at the company in which they will receive 14 weeks standard paid leave and the remaining 6 weeks would be paid double. By combining the scheme with the federal governments paid parental leave of 18 weeks that would mean female employees of IAG, which owns also CGU and NRMA Insurance, would receive almost one year's salary while they are off from work and taking care of children.
IAG Chief Executive Mike Wilkins said the incentive seeks to encourage working mums to go back to work. Since multitasking is a corporate culture in IAG, he said mothers would fit well into the organization because they are the ultimate multitaskers.
"We were finding that some women after having a child were dropping out of the system, which is not what we want.... We found that women who were going on maternity leave were saying 'It's difficult for me to come back or if I do come back it's quite difficult to be there,'" The Australian quoted Mr Wilkins.
Female employees of IAG, who comprise more than half of the company's 10,000 workers, hailed the new scheme because it would make life easier for them. Between 500 and 600 IAG employees go on maternity leave every year.
Australian Confederation of Trade Unions President Ged Kearney described the move as a major advance for female workers. She urged other Aussie firms to follow IAG's lead. Federal Minister for Families Jenny Macklin encouraged Australian companies to provide decent paid maternity leave.
"We want paid parental leave to be seen as a normal part of working life, and with businesses like IAG, it's clear that we will achieve our goal," The Herald Sun quoted Ms Macklin.
The generous package is a first in Australian's finance industry. Insurer QBE offers 12 weeks of parental leave, while Westpac and Commonwealth Bank have 13 and 12 weeks. The average in the finance industry is 13 weeks, but the national average is only 9.5 weeks.
"If we can also reduce some of the turnover that we've had, particularly in our middle management ranks, and get the opportunity to promote more people into senior ranks, I think it will pay for itself," Mr Wilkins added.
The package is part of IAG's target for women to make up one third of senior managerial posts by 2015. IAG initially had 25 per cent female senior managers but has upped the percentage to 28 per cent.
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