The cost of not providing childcare
support is evident, for example in the
difficulties experienced by employees in
meeting the competing demands of work
and family, leading to stress, loss of
motivation and performance, and
ultimately poor attendance and
resignation. Whether an employee remains
in the job working at less than full
potential or leaves the organisation
because it is too stressful to balance
childcare responsibilities with career
aspirations, the organisation has a poor
return on its investment. It also sends
out a clear signal about the value it
attaches to individual employees and how
real is the encouragement given to its
employees to reach their full potential.
The cost-benefit analysis normally
includes:
- a staff profile, as well as an
evaluation of local labour markets
- the cost of sickness absence
- the cost of staff turnover, ie
recruitment costs, costs of lost
experience, cost of lost investment
in training and development, and
additional costs of providing cover.
On the basis of this information,
an organisation can set objectives
and establish budgets based on
potential savings. The rationale for
continuing to provide support during
a recession and restructuring is the
same as that for introducing career
break schemes.
Workplace Nurseries.
These provide a permanent,
on-site facility, directly
accountable to the organisation.
Whichever way they are structured,
they are the most expensive option.
Where a managing agent is used, the
organisation will want to be
represented on the nursery
management board. Employers must
also ensure that the childcare
provision meets legal requirements
and that the quality of the
childcare is congruent with its own
quality standards.
Partnerships in Childcare.
Some employers have identified
partners to share the cost of
setting up a nursery, such as local
authorities, schools, colleges and
the local health authority.
Places in Other Nurseries.
Organisations have purchased
places in independent nurseries,
under defined contractual
arrangements. The advantages are
that, apart from the initial cash
injection, costs are limited to the
weekly place subsidy. Disadvantages
include the fact that opening hours
are regulated by different standards
to those operating in the sponsoring
organisation.
Tax Advantages.
The employers' tax advantages may
include tax relief on capital costs,
corporation tax and employers'
National Insurance contributions.
Employees' subsidies are no longer
taxed as benefits in kind. Employers
will, however, want to check out the
tax position carefully as this
benefit appears to be kept under
review.
Childcare Vouchers and
Allowances.
Subsidies paid direct to
employees provide a more flexible
option which enables parents to
choose the most appropriate form of
childcare for them and avoids direct
involvement in childcare provision
for employers. Childcare allowances
are paid direct to the employee
whilst childcare vouchers are
redeemable by the carer. They can be
used for any form of legal childcare
including, childminders, nannies,
nurseries and both pre-school and
out-of-school care. Childcare
allowances can be based on a flat
rate per week or a percentage of the
employee's salary.
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