MANAGING CASH FLOW AND MANPOWER
Over the years, legislated leave provisions have been enhanced to better support working mothers.
One reason is the government’s drive to lift Singapore’s birth rate, which, like in many advanced economies, is languishing well below the population replacement rate.
During the National Day Rally in August, Prime Minister Lawrence Wong announced that parents would get an additional 10 weeks of government-paid leave to be shared between both parents, replacing the existing arrangement where mothers can share up to four weeks of their 16-week maternity leave with their spouses.
With these enhancements, by April 2026, parents will have access to a total of 30 weeks of paid parental leave between them, comprising 16 weeks of paid maternity leave, four weeks of paid paternity leave, and 10 weeks of shared paid parental leave.
If a couple decides to allocate the entire 10 weeks of shared parental leave to the mother, she could potentially take up to 26 weeks of leave in total, mostly paid for by the government.
Employers are typically required to pay employees during their leave before getting reimbursed by the government. This can create cash flow challenges, especially for small and medium enterprises (SMEs) with mostly female workers, like beauty and wellness firms, therapy practices and caregiving services.
Employers CNA TODAY spoke to said having insight into when staff might take extended leave allows businesses to budget more effectively and avoid sudden financial strain.
Ms Jewel Yi, 33, a senior occupational therapist and director of Little Marvels Therapy, has celebrated six pregnancies, including her own, in a team of 17 since starting the business in 2022.
She said the number of staff taking maternity leave in a women-led business like hers is naturally often disproportionately higher than in a more gender-balanced workforce.
“As an example, if all my employees are women and 50 per cent of them go on maternity leave, the impact on my cash flow and services will be much greater compared to a company with a gender-balanced workforce, where this proportion might only be 25 per cent of its employees going on leave,” she said.
“Yet we are all equally affected and burdened by inflation, taxes and landlord demands.”
Ms Yi added that the reimbursement from the government could take a while, and she has to absorb these costs for the time being.
“This could leave us with insufficient cash flow to hire contractors in the meantime, such as paying extra to contract staff on top of what we pay our employees, to help us manage during this period.”
“I will need to manage these challenges well because operating costs don’t adjust nor differentiate between women-majority and other businesses,” she said.
Dr Annabelle Chow, founder of Annabelle Psychology, highlighted the difficulty of hiring front-line staff in the mental health industry at short notice, as the learning curve is steep for training staff to work with people with psychological disorders.
“There is a lack of an available pool of mental health workers and front-line staff in Singapore, further exacerbated by strict rules on the hiring of foreign workers,” she said.
A GP who wanted to be known only as Dr Nam shared that many clinics employ predominantly female staff and are typically small businesses with limited employees, which often leaves them short-handed.
For example, her clinic has a small team of one full-timer and four part-timers. Although she has not had anyone go on maternity leave yet, that might change in the coming years.
“Other than budgeting, I try to hire staff of varying ages, from young school leavers to those who have already had children and retirees, so this minimises the chances of employees being on maternity leave at the same time.”
Ms Laraine Heng, director of human resources at Babilou Family, said with an average of 10 to 20 staff members going on maternity leave each year, the firm is ramping up strategies to ensure operations run smoothly with the introduction of longer shared parental leave starting next year.
Babilou Family operates more than 60 preschool and childcare centres, kindergartens and student care centres here.
These strategies include shifting staff between different centres to ensure all tasks are covered, keeping a pool of relief staff ready, and helping employees grow into roles with more responsibilities.
Another consideration is what happens after hiring someone to cover maternity leave, as the new hire may or may not remain until the staff member returns.
“Circumstances can change unexpectedly. So, while we try to plan as much as possible for both the mother and new staff, we have to be flexible, too, to minimise disruptive changes,” said Ms Heng.
WHAT BUSINESSES CAN DO
While knowing about family planning can help businesses plan for potential workforce changes, such discussions must be approached sensitively to ensure employees feel supported rather than pressured.
Hiring experts and bosses told CNA TODAY that balancing business needs with a family-friendly culture is a delicate but crucial task.
Mr Don Poh, group chief executive officer of Lorna Whiston Schools, said when starting a business, one must plan for at least two years of operational expenses, as it typically takes two to three years to break even and become profitable.
As 98 per cent of his workforce is female, maternity leave is common.
That means he has to assess the situation by, for example, looking at the workforce’s age distribution, particularly those in their 20s and 30s.
“From there, I start projecting the probability of maternity leave: How many are married, how many are thinking about starting a family, and so on. The key is getting to know your staff and their life stages so you’re not caught off guard.
“If you anticipate tight cash flow due to the likelihood of staff going on maternity leave, you’ll need to either cut costs or find more ways to boost revenue.”
