Benefits to support working parents

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  • Childcare vouchers and on-site nurseries are flexible, tax-efficient ways to cover staff childcare costs.
  • Emergency childcare is a back-up service that can be offered as a core benefit, a voluntary benefit or as part of a flexible benefits package.
  • Flexible working encompasses part-time working or flexible hours, homeworking, job sharing, unpaid leave and career breaks.
  • There are a number of business benefits for employers in supporting working parents, such as reduced absenteeism and increased engagement, loyalty and productivity.

Benefits that support working parents can pay employers back through increased productivity, engagement and reduced absenteeism, says Jennifer Paterson

Children and their parent’s benefits and tax credits have been under the government spotlight of late. Whether it is lone parents being moved from income support to job seekers allowance last month, once their youngest child turns seven or higher-paid parents losing their child benefit from 2013, the upshot is that employers will be under pressure to help employees who are parents.

Many employers already do help parents by offering benefits such as childcare vouchers, on-site creches, off-site nursery provision, emergency childcare, and flexible working arrangements. Carole Edmond, managing director of childcare provider Bright Horizons, says: “Having employer-sponsored childcare provision assists staff by alleviating the stress of looking for, and accessing, high-quality care. Employers typically report benefits of increased retention, and improved staff productivity and engagement.”

Childcare vouchers are a tax-efficient way to help staff cover the cost of governmentapproved childcare. By purchasing vouchers, through a salary sacrifice arrangement, staff can make tax and national insurance (NI) savings on up to £55 a week, or £243 a month. Employers also save on NI contributions. Marcus Barrow, managing director at Apple Childcare Vouchers, says: “If vouchers are offered through salary sacrifice, the employer is not paying NI on the value.”

Employers can also help their staff to source childcare. One option is to provide an on-site nursery, but the capital cost makes this more suited to larger organisations. On-site facilities offer complete tax and NI exemptions on the cost of childcare, but employers must comply with the same regulations as any other nursery, such as Ofsted requirements and inspections.

Alternatively, they can partner another employer, local authority or voluntary body to share the administrative and financial burden of making a nursery available. The same tax and NI exemptions as an on-site facility apply to a jointly-provided nursery, as long as the employer is seriously involved in managing and financing the facility, which is located on premises made available by one or more of the participants.

Or, employers can directly contract places at a nursery, although the tax and NI exemptions are limited to the first £55 a week or £243 a month. “We offer childcare predominantly for preschool-age children but also run holiday clubs before and after school, depending on locations and requirements,” says Bright Horizons’ Edmond. “It is about working with employers as flexibly as possible to make sure they get what they need out of it.”

Childcare help can boost productivity

Helping staff to source childcare they are happy with can boost productivity and engagement by reducing their worries during the day. It may also help employers increase the number of staff that return after maternity leave if they are confident that the employer will support them.

If employees’ usual childcare arrangements go awry at the last minute, for example if their nanny or childminder falls ill, this can be a source of great stress. In many cases, it may lead to the parent being absent from work if they cannot find other care at short notice. Employers can help here by offering emergency childcare. This can range from providing access to telephone numbers for nurseries through an employee assistance programme, right through to reserving places at a local nursery for staff to use as required. Back-up services can also include short-term nursery provision and in-home care by nannies. “It is for families that need that flexibility and have no extended family network around them,” says Edmond.

Flexible working arrangements can also benefit employers and employees. These enable staff to better juggle their work and caring commitments, while giving employers a more flexible workforce. Options include flexible hours, homeworking, job sharing, unpaid leave and career breaks. Ryan Shorthouse, researcher at the Social Market Foundation, says: “There is an increase in the supply of flexible working arrangements that more people can access and that can accommodate different businesses.” Iain McMath, managing director of Sodexo, adds: “Employers should allow staff to work at a time when they are best suited.”†

Employers leading the way in work-life balance practices include Centrica, PricewaterhouseCoopers and Royal Bank of Scotland, according to the charity Working Families’ ‘Top employers for working families’ awards.

Liz Morris, director of consultancy and training at Working Families, says: “There is a vast difference between a paper policy and an embedded value-adding practice. What drives business benefits and makes the difference to working families is a culture of mutual flexibility and trust that affords some autonomy in how, when and where work is done. The result is increased commitment, productivity, financial performance, retention and reduced absence.”

Apple Childcare Vouchers’ Barrow adds: “Whenever an employer offers some kind of childcare package, it will always be highly valued by staff because children are their most valued belongings. Whatever the employer can do to assist is worth a fortune to those employees. Because this is an appreciated benefit, the employee will gain greater motivation, more productivity, and that is how employers get a return.”

But getting a return on investment depends on how an employer uses its resources, says Ben Black, managing director at My Family Care. “An employer gives staff a bit of flexibility and they are the most productive, engaged and brilliant employees,” he says. “They are productive and engaged because they prioritise amazingly and they have not got time to faff around. The employer is also making the most of their talent. They can answer emails at night and be on the phone outside the school gates, so it is crazy not to create flexible work patterns so people can find jobs and hours to suit them. Return on investment is very easy.”

Case study: Parenting network adds up for KPMG

KPMG offers its 10,200 staff a variety of childcare and flexible working options, including childcare vouchers and emergency childcare.

In 2009, the professional services firm formed the KPMG Parenting Network to offer information through a dedicated website, networking events, training seminars and an opportunity for parents to offer each other advice. Gaynor Francis, diversity specialist at KPMG, says: “The Parenting Network offers seminars that cover things like building self-esteem with your children and managing work-life balance. For emergency childcare, we offer 15 days for all staff, with five days of that requested without the performance management leader’s approval. All employees are entitled to that free of charge.”

KPMG also has a range of flexible working options, including career breaks, job share, homeworking, unpaid leave and annualised days. The most popular choices are part-time working and unpaid leave, which is available at short notice. Also popular is glide time, a non-contractual option that staff can take on an ad-hoc basis to vary their core working hours, starting between 8am and 10am and finishing between 4pm and 6pm. Sarah Bond, European head of diversity and employee engagement at KPMG, says: “Employees need different kinds of flexibility at different points in their lives to achieve their ambitions, and we offer flexible working options to help them achieve this.”

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