In a landmark announcement during the 2024 National Day Rally, Prime Minister Lawrence Wong revealed enhancements to Singapore’s maternity leave framework. From April 2025, eligible working mothers will benefit from up to four months of government-paid maternity leave, with financial coverage extended for the full duration.

While this move reinforces Singapore’s dedication to family-friendly policies and maternal well-being, it also brings tangible operational and financial implications for businesses—particularly small and medium enterprises (SMEs). This article explores the impact of extended maternity leave on business operations and practical strategies companies can adopt to adapt effectively.

Operational Challenges Posed by Extended Maternity Leave

1. Workforce Availability and Staffing Complexities


A full 16-week maternity absence can significantly affect team dynamics, especially in SMEs with lean manpower. In sectors like healthcare, tech, finance, or professional services—where individual roles often require specialised skills—finding temporary replacements can be a daunting task.

For example, if a key employee overseeing client relationships or regulatory compliance goes on leave, workflows may be delayed or disrupted. Many SMEs may not have overlapping skill sets internally to easily cover these responsibilities.

To prepare, businesses need to anticipate potential staffing gaps and strengthen succession planning, particularly for employees in critical roles.


2. Escalating Administrative and Financial Burdens

Although the government reimburses maternity leave wages capped at $10,000 for the last 8 weeks (under Government-Paid Maternity Leave), businesses may still face indirect costs. For employees earning above the cap, employers must decide whether to top up salaries, which can increase financial strain. Additionally, HR departments are tasked with tracking leave entitlements, processing government claims, and arranging temporary coverage—responsibilities that can be especially burdensome for SMEs without dedicated HR resources.

To alleviate administrative strain, some businesses opt to outsource payroll processing and related HR functions. External providers can streamline compliance with leave policies, ensure accuracy in salary calculations and top-ups, and secure appropriate government reimbursement claims, allowing companies to focus on core operations.

Additionally, training temporary hires or internal replacements incurs costs. Onboarding temporary staff for specialised roles can take up to three to four months or longer, depending on the capabilities of the replacement, and productivity will also lag until they reach full efficiency. Post-leave handovers further compound expenses, as knowledge transfer between temporary and returning employees may extend beyond initial timelines.

3. Logistical Hurdles in Leave Notification

A four-week notice period for maternity leave, while intended to grant employers time to adjust, has drawn criticism for being insufficient. Industries requiring extensive onboarding, such as finance or IT, argue that four weeks barely allows for identifying gaps, much less securing qualified replacements.

Proactive communication between employers and employees is vital. Early discussions about leave plans enable businesses to explore flexible arrangements, such as staggered returns or remote handovers. Employers retain discretion to defer leave in cases of insufficient notice, but such measures risk employee dissatisfaction. Balancing operational continuity with empathy remains a tightrope walk for leadership.

Strategic Approaches for Mitigating Disruptions

1. Establish Proactive Workforce Planning



Anticipating staffing gaps is critical. Companies should conduct risk assessments to identify roles vulnerable to extended absences and develop succession plans. Documenting standard operating procedures (SOPs) and creating centralised knowledge repositories ensure continuity when key staff are absent. Cross-training employees across functions fosters versatility, enabling teams to pivot during disruptions. For example, a marketing firm might train content creators in basic analytics, ensuring coverage during a colleague’s leave.

2. Leverage Technology and Outsourcing



Investing in digital tools can offset productivity losses. Project management platforms like Asana or Trello enhance transparency, while HR software automates leave tracking and compliance. Cloud-based systems facilitate remote handovers, allowing departing employees to update files in real time. As mentioned earlier, temporarily outsourcing certain processes to specialised firms reduces the strain of a reduced workforce, ensuring productivity is not severely affected.

3. Utilise Government and Tripartite Resources

The government offers grants to support HR modernisation, such as the Productivity Solutions Grant (PSG), which subsidises technology adoption. Collaborating with tripartite partners like SNEF provides access to workshops on leave management and workforce flexibility. SMEs should also explore job-sharing initiatives or part-time roles to maintain coverage without overextending budgets.

4. Cultivate a Flexible and Supportive Culture



Encouraging open dialogue about leave plans fosters trust and allows for smoother transitions. Flexible work arrangements, such as telecommuting during a phased return, ease reintegration. Recognising employees who cover additional responsibilities—through bonuses or recognition programs—bolsters morale. Prioritising employee well-being not only mitigates turnover but also enhances employer branding in a competitive talent market.

Conclusion

Singapore’s enhanced maternity leave policies underscore a progressive shift toward balancing familial and professional responsibilities. However, the transition demands strategic adaptation from businesses.
Through the methods discussed above, companies can turn regulatory challenges into opportunities for operational resilience. As the complete implementation of these policies approaches, proactive planning will be pivotal in sustaining productivity while supporting employees’ evolving needs. Ultimately, organisations that navigate these changes thoughtfully will emerge stronger, with loyal, motivated teams poised for long-term success.

Need help managing workforce disruptions and compliance during extended leave periods? Acrafile supports SMEs with payroll outsourcing and HR solutions tailored to evolving regulations—so your team stays focused, agile, and compliant.