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.