Female Participation

PKF suggestions on improving female worker participation

Addressing trade unionists, the prime minister said inter alia that our economic growth is exemplary and he will not be the first one to press the pause button. He also addressed concerns by Opposition leader that the country could not handle the heavy influx of foreign workers. Such concerns together with the warning by minister of finance that the economy is starting to decelerate makes our dependence of having an adequate supply of trained workers more pressing.

Another concern which one hopes will be addressed in the coming budget is the housing market and the perceived high rents which are partially attributed to the constant inflow of foreign workers. But foreign workers contribute to taxes and pay social contributions which go to strengthen the State pension fund even though most of them will not claim pension benefits.

The latter has been a bone of contention with the Commission which concluded a study on the adequacy of the two-thirds pension. This was recently carried out by the European Social Protection Committee. In the context of adequate pension support workers are encouraged to provide together with the State for retirement benefits and there is constant reference in pre-budget consultation  meetings on the need to buttress pensions and improve the COLA mechanism to cater for cost of living increases. This is even more important at a time of relatively fast rate of economic growth and perceived rise in inflation. This issue has a direct bearing on the propensity of female workers to re-enter the job market after terminating employment due to pressing family commitments.  In view of such circumstances PKF has upgraded its previous study concerning the low participation rate of females. This independent study was solely carried out by PKF and not on behalf of any employer union or association. The exercise was financed entirely by PKF as part of its corporate social responsibility policy. In Malta , there is a dichotomy, that in reality statistics show a higher proportion of females than males graduate each year.

Despite significant progress across the years, female participation in the labour market remains problematic. Female participation has remained considerably lower than male participation, to the detriment of the country’s economic growth. The importance of women’s participation in the labour market is supported by a number of motives. The World Economic Forum notes that higher women participation in an economy stimulates wider economic and social benefits. Female participation can help in attaining a better quality of life, financial independence, fulfilment, experience, skills and personal development. The higher the proportion of females that opt out of the labour force, the higher the loss to the economy, in terms of its human resource capital. These considerations have led PKF Malta to investigate women’s motivation to work after having raised the children as well as the measures and conditions that would encourage them to stay or return in the work force, such as flexible working and reduced hours timetables, parental leave, access to board positions, high quality childcare services and fiscal incentives to name a few. This study then goes on to assess the ideal policies and measures that would offer the right amount of flexibility to allow mothers achieve a balance between work and family life, and encourage their return to the labour force.

A mix of qualitative and quantitative data collection methods have been used to compile this study and answer our research questions. In fact, secondary data was utilised in order to analyse the current situation in relation to Malta’s female participation rate. Additionally, a survey was administered through a number of face-to-face interviews in a number of localities, including; Valletta, Birkirkara, Mosta and Sliema and complemented with an online survey administered through social media pages specifically targeting mothers of a working age. Female participation in Malta is still considerably lower than males although good progress was registered. As at 2017, Eurostat figures show that the activity rate for females in Malta stood at 58.8%, whilst that for males stood at 82.6%. Looking at a span of the past ten years, from 2007 to 2017, it can be noted that the female participation rate in Malta increased from 38.9% in 2007, to 47.4% in 2012 and up to 58.8% in 2017. This implies that the female participation rate has increased considerably within the past ten years, by approximately 19.9 percentage points. However, this success should not be misinterpreted. When compared with the rest of EU member states, Malta lies in the bottom 3 in respect of female activity rates, surpassing only Italy and Romania. Therefore, one hopes the budget surplus for next year will be partly used to implement more female worker friendly schemes.

A rather worrying aspect is the gender employment gap in Malta which still stands at a high 25% when compared to the EU (28) average at solely 11.4%.  Official statistics indicate that the gender pay gap in Malta has increased from 3.8% in 2007, up to 11.5% in 2014. The causes of a gender pay gap could be various, very often complex and even overlapping in nature. Whilst the number of students enrolled in post-secondary and tertiary education between 2015 and 2016 was higher for females (at 12,645 students) than males, (at 11,466 students), it could be that females end up in work opportunities that have a narrower scope for financial reward because of their family commitments. The National Statistics Office shows that the average weekly hours worked by females at 35.1 hours/week is lower than that of males at 41.2 hours/week.

The traditional causes for dropping off the workforce are children’s upbringing, the low availability of flexible hours and teleworking and equally important -job satisfaction. Respondents in the education and training services sector opt to resign for at least 2 years on a sabbatical upon the birth of their children and afterwards manage to seek a part-time job. Naturally this leads to women falling behind in their career progression. The study included interviews with a number of stakeholders who are actively involved in matters relating to female participation.

It is sad to note that female participation is perceived to be “status enhancing” to serve purely as an additional form of disposable income rather than to gratify their professional capabilities. Women need to be treated and be seen as a vital part of the economic engine not just a clog in the wheel. Finally, it goes without saying that during a time when vacancies take a long time to be filled due to scarcity of human resources, incentivising a higher female participation results in a higher utilisation of our intellectual capital .It eases our tenuous dependence on importing more foreign workers.

George M. Mangion

gmm@pkfmalta.com

George Mangion is a senior partner of an audit and consultancy firm, and has over twenty-five experience in accounting, taxation, financial and consultancy services. His efforts have seen that PKF has been instrumental in establishing many companies in Malta and placed PKF in the forefront as professional financial service providers on the Island.

George can be contacted at gmm@pkfmalta.com or on +356 21493041