Written evidence from Dr Bianca Stumbitz (Middlesex University), Dr Helen Norman (University of Leeds), Professor Emma Banister (University of Manchester), Dr Laura Jarvis-King (University of Manchester), Dr Amy Burnett (Middlesex University) and Dr Clarice Santos (Middlesex University) [SPL0054]

The challenges of using Shared Parental Leave for UK small and medium-sized enterprises

Submission to the Women and Equalities’ Commission call for evidence on Equality at work: paternity and shared parental leave 

Dr Bianca Stumbitza, Dr Helen Normanb, Professor Emma Banisterc, Dr Laura Jarvis-Kingc, Dr Amy Burnetta and Dr Clarice Santosa.

aMiddlesex University Business School

bLeeds University Business School

cUniversity of Manchester

This report is based on preliminary findings from an Economic and Social Research Council (ESRC) funded project exploring the Transition to Parenthood in UK small and medium-sized enterprises (SMEs) (defined as having between 1 and 249 members of staff). The report draws on data from over 160 in-depth interviews with SME employers and SME employees[1]. Two surveys of 2000 SME employers and 2000 employees, which explore opportunities and challenges around parental leave, are also being conducted with data returned to us for analysis in March 2025. This research is ongoing - we are happy to update the committee with our publications and further work.

1. Summary

Our research shows that:

• Challenges around affordability, awareness and complexity are exacerbated for employers and employees of SMEs, which constrains employees from requesting and taking up SPL.
• SPL needs to be redesigned so that it can be realistically applied and taken up by parents across a range of organisation sizes.
• It is important to make SPL more affordable for parents and to simplify policy documents and processes for SME employers and employees.

Our recommendations focus on (i) reducing the complexity of SPL, which include (ii) providing clearer information to support SME organisations; (iii) providing government financed HR support for SMEs and (iv) increasing the earnings replacement rate.

2. Context

Most research about Shared Parental Leave (SPL) focuses on larger employers, despite SMEs accounting for 99.9% of the business population (99.2% are small) and over three-fifths of UK employment (Stumbitz et al. 2018). There are pronounced, and specific, issues within the SME landscape around knowledge, complexity and affordability, which are exacerbated given many SMEs operate without dedicated HR professionals.

3. Why has take-up of statutory shared parental leave been low and what could be done to increase take up? 

(i) Complexity

Smaller SMEs often lack a dedicated HR department or person. They often struggle with SPL administration, with some having never processed an SPL request before. The SPL policy itself is seen as overly complex (as evidenced by the 59-page technical guide – see BEIS 2020), requiring employees to navigate bureaucratic processes with little employer guidance, as demonstrated by these quotes from an SME employee and employer:

“It was really complicated, they had never dealt with it before, never done it before, obviously I had never done it before, so we were kind of working out how did that work… it was really complicated and then the forms you have to fill out are really complicated.” (SME employee)

“I think that shared parental leave, from an admin point of view, […] you need a degree to be able to fill in the form. […] I think some of them [parents] would be put off by [this]. [...] they wouldn’t understand the form, they’d need help to go through it […]  it’s just too complicated. And I think there’s a lot of people who would see it as a challenge as opposed to something that’s very helpful.” (SME employer)

(ii) Affordability

Evidence shows that most parents who are eligible cannot afford to take SPL because it is paid at a low flat rate that is equal to a quarter of men’s and 29% of women’s median full-time (gross) weekly earnings[2]. The DBT/BEIS (2023) reported that access to enhanced pay was a ‘direct facilitator’ for taking up SPL but our research with SME employers found that many smaller organisations do not have the resources to provide enhanced pay, which means SME employees often cannot afford to take it up. 

Our research shows there are significant resource constraints for most SMEs (both in terms of time and money), and this not only impacts knowledge (and formulation of policies), but also informs SME workplaces’ abilities to provide Shared Parental Leave Pay (ShPP) enhancement and manage staff absences. One SME employer highlighted how they had attempted to support a member of their staff to take up SPL but this was abandoned because it became too costly:

“I proposed [...] 12 weeks for mums, or primary caregivers, it’s two weeks for dads or secondary caregivers. […] I also wanted it to increase with length of service. So, if you’d been here for four years, it would go up to 16 weeks, and then if you’d been here for five years, it would go up to 20 weeks. And, yeah, essentially was just told, no, because it will cost too much.” (SME employer)

(iii) Limited knowledge and awareness of SPL

Our research identified limits to knowledge and awareness of SPL within SMEs, which means it is often not promoted within workplaces and only looked at in response to a related staff request. One SME employee told us that their workplace “just had no idea” about SPL.

(iv) Traditional gender norms and attitudes hinder fathers from taking leave

Evidence shows that traditional expectations about gender roles persist in many organisations, which deter fathers from requesting and taking up parental leave (e.g. see DBT/BEIS 2023). This can be exacerbated in smaller, more tight-knit workplaces that are often characterised by close family-like relationships. For example, one male SME employee told us:

“The company is quite traditional, like HR is a woman and the accounts team is a woman and everyone else is a man on the technical team, and all that kind of thing. I think it was probably a little bit of a surprise that I was taking this extra month off. The director did make sort of an offhand jokey comment to me about it but, again, that was kind of the extent to which it went.” (SME employee)

4. Policy recommendations

To widen the take-up of SPL within SMEs, complexity of SPL should be reduced and a wider support package introduced (e.g. financial support to enable/encourage ShPP enhancement) alongside other SME-targeted support measures.

Our project is developing a toolkit for SMEs so they can support their staff who are transitioning to parenthood and this includes information about SPL for both employers and employees. 

However, it remains clear that many are not aware of SPL, struggle with the complexity of it and/or cannot afford to take it up. We therefore recommend to:

• Reduce complexity of the policy by making it father-targeted and non-transferable;
• Provide targeted, bite-sized information on SPL for SMEs (this will be partly addressed through a toolkit to support SME employers and employees that we are co-producing with Working Families and the Fatherhood Institute);
• Provide government financed HR support for SMEs around SPL and broader parental leave issues;
• Improve affordability by increasing the earnings replacement rate (e.g., to at least 80% or more of average earnings).

References

Department for Business, Energy and Industrial Strategy (BEIS) (2020) Shared Parental Leave and Pay Employers’ technical guide: https://assets.publishing.service.gov.uk/media/5ea6af43d3bf7f7b54f7588e/shared-parental-leave-and-pay-employers-technical-guide.pdf

Department for Business and Trade (DBT)/ Department for Business, Energy and Industrial Strategy (BEIS) (2023) Shared Parental Leave Evaluation report, BEIS/DBT Research Paper Series Number 2023/010: https://assets.publishing.service.gov.uk/media/649d54be45b6a2000c3d4539/shared-parental-leave-evaluation-report-2023.pdf

Stumbitz, B., Lewis, S., & Rouse, J. (2018). Maternity management in SMEs: A transdisciplinary review and research agenda. International Journal of Management Reviews, 20(2), 500-522

Office for National Statistics (ONS) (2023) Employee earnings in the UK: 2023 https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/annualsurveyofhoursandearnings/2023

For further information about the project, see:

Transition to Parenthood in UK SMEs: https://www.mdx.ac.uk/research/research-centres-and-groups/centre-for-enterprise-environment-and-development-research-ceedr/good-work-wellbeing-and-employment/transition-to-parenthood-in-uk-smes/

For other details about the project and its team: https://business.leeds.ac.uk/directories0/dir-record/research-projects/2045/transition-to-parenthood-in-uk-smes

February 2025