How can employers best support employees with childcare costs?

Over two thirds of working mums think the best thing employers can do to support them over childcare costs is to offer more flexible working.

The survey by Workingmums.co.uk  found that 67% said offering more flexible working, such as term time working or annualised hours, was the best way employers could support them with childcare costs. Christina Leafe, now Head of Environment at engineering firm Atkins, devised her own solution when her children were younger. She effectively did a term-time only contract, but presented it to her manager as a 93% contract involving two weeks off at Christmas, two weeks at Easter, school inset days and four weeks over the summer. She says it allowed her to stay in her senior job and to continue to rise up the career ladder.

Other parents polled felt other solutions were needed with regard to childcare costs. Twenty-six per cent said employers should offer workplace creches. Two per cent favoured a subsidy scheme to make up for the phasing out of childcare vouchers for new joiners from next April and six per cent favoured other options, several of whom thought it was up to government and childcare providers to tackle high childcare fees.

New government policies

Support with childcare costs has risen up the agenda in recent months given the decision to phase out childcare vouchers for new joiners. The voucher scheme allows parents to get childcare support based on claiming back some of the tax and NI contributions on their gross salary. The change on voucher schemes comes after the Government introduced tax-free childcare and 30 free hours a week childcare to parents of three and four year olds in England. It argues that tax-free childcare means more parents can get access to childcare support than just those whose employers offer childcare vouchers.

However, there has been a lot of controversy over the 30 hours and tax-free childcare schemes.

To be eligible for the 30 hours childcare support for three and four year olds, both parents have to work. Each has to earn the equivalent of  over 16 hours a week at minimum wage – whether on an employed or self-employed basis – but under £100,000 a year. The extension doubles the previous offering of 15 hours a week free childcare for all parents of three and four year olds. Parents can claim the 30 hours in term time or they can stretch the offering to cover the holidays which means around 22 hours are free.

Tax-free childcare is a system whereby parents pay upfront into an online childcare account and claim back up to 20% of the cost from the Government. It will be available for eligible parents of children under 12 [17 if the child is disabled] by March 2018, having been rolled out nationally since April. Originally the roll-out was due to be completed by this December.

Childcare providers say the 30 hours is not properly funded by the government and that that means many providers cannot afford to offer it. Thousands of parents who are eligible have not been able to find places.

There are also complaints from parents about the tax-free childcare system being overly complicated, which could be an area where employers could provide support.

Employers argue that workplace creches may not be the ideal solution to childcare issues. Workingmums.co.uk’s recent roundtable on childcare found employers who investigated on-site creches said it was very expensive, that if there were long waiting lists there was pressure for women to announce their pregnancy early, that it was difficult to commute in with a baby if offices were based in big cities, that it made it more difficult to share pick-ups given it would usually be tied to one parent’s workplace and that it didn’t work with agile working as workers were often not solely based in one area.

Creative approaches

In the meantime some employers are looking at schemes such as offering loans for childcare deposits to help employees get past the first hurdle to getting childcare.

Others have been considering creative ways to look at specific childcare issues, like the summer holidays. Deloitte recently implemented an agile working programme which includes an initiative for employees to request one month off unpaid at any time in the year. The month has to be taken in a block. Employees are not asked to put forward a reason for taking the month off, but the majority who requested it in the early days did so to spend more time with their families, particularly in the summer months which tends to be less busy for business. The time out must be at a time that fits with business needs, that is, not at a peak periods. The negotiation process for taking time out involves a staff member first speaking to their manager informally and talking through what the best time would be for both. Managers have been encouraged to have a positive mindset towards requests and to find ways that can make them work. Deloitte says that with proper planning, continuity of business has not been adversely affected and say employees balance the cost of summer childcare with losing earnings for a month and having more time with their children.

At an Equalities and Human Rights Commission discussion on Tuesday, Sarah Gordon, business editor of The Financial Times, said childcare needed to be viewed more broadly. It was not just for individual parents and should be regarded as a social and business benefit. She stated: “The role of employers with regard to childcare will have to change over time. We as a society have to regard childcare as something employers, institutions and government have to address.”

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