How support strategies for parents can bring cost savings
Concerns about the cost of living and measures to address this are global, with governments including those in the UK, Europe, and the US putting packages in place to provide a buffer against these costs while trying to avoid fuelling inflation.
Bright Horizons’ head of thought leadership Jennifer Liston-Smith, Victoria Cottee, head of client relations and Nicola Broomhead, head of client services, look at the role partner employers are playing in enabling working families to make their income go further, while also achieving a commercial and cultural fit.
Hybrid working can play a role in helping to reduce employee costs by cutting down the commute to the workplace.
For families with young children, employers can also pass on the message that tax relief on childcare is being under-claimed and could be worth up to £2,000 a year.
Also, in addition to government support with energy bills, from 6 July the threshold at which national insurance contributions (NICs) becomes payable will rise to £12,570. Workers paid up to around £40,000 should find their NI position better than it was, even before the April rise in NIs. And UK income tax is set to fall to 19% from 20% as of April 2024.
Here are four ways that employers can help employees.
1. Provide a workplace nursery onsite or nursery partnership: (underwriting places in local nursery)
Cost-saving for employees: Tax and NI exemption for both employer and employee for on-site and near-site provision of workplace nurseries.
Employees save on average 32% of childcare cost, depending on salary and tax bands. This puts around £5,500 back into employees’ family finances (typical client example 2022).
Cost-saving for employers: These savings can make a workplace nursery cost-neutral for employers.
• 86% of employees say access to workplace nurseries or nursery partnerships improves their productivity (Work+Family Snapshot).
• 60% of employees would stay with their employer in return for everyday child care (US Modern Family Index).
• 75% of employees who use employer-sponsored workplace nurseries or nursery partnerships are more likely to recommend their employer as a result (Work+Family Snapshot).
• 89% agree it makes it easier to return from parental leave (Work+Family Snapshot).
• 87% agree it enhances wellbeing and reduces stress (Work+Family Snapshot).
Employer-sponsored day-to-day care addresses the well-known child care challenge of finding care that is high quality, affordable and available.
2. Provide back-up care
Cost savings for employees: In the event of a care breakdown, 57% of employees would use annual leave to cover the gap themselves. The alternative is to try to find care at short notice, which is costly as well as stressful.
Cost savings for employers:
• 87% of employees said they would have missed work if back-up care had not been available (Bright Horizons user feedback surveys 2022 YTD).
• 61% of those surveyed would consider changing employer without it.
3. Virtual tutoring as part of back-up care
Cost savings for employees: Subsidising access to tutoring for children makes it affordable, reducing financial pressures and stress.
• 73% agreed that without access to virtual tutoring through back-up care, they would have used private tutoring – with an impact on family finances (Bright Horizons user feedback surveys 2022 YTD).
Cost savings for employers: Employees using virtual tutoring report positive engagement. Without virtual tutoring, 55% would have “dedicated hours to tutoring my child directly” and 32% would have experienced more stress at work (Bright Horizons user feedback surveys 2022 YTD).
4. Parental leave
One of the drivers for employers putting a parental leave programme in place is the knowledge that careers can derail at this critical moment, and gender pay gaps widen, unless the process is managed.
Cost savings for employees: Among individual users of Bright Horizons’ Coaching or Parental Leave Toolkit, nearly 9 in 10 found it boosted confidence, showed support for wellbeing, and helped to keep their career on track (Bright Horizons Parental Leave Toolkit & Coaching Impact Survey 2021).
Cost savings for employers: Clients report report a 12-14 percentage point increase in the number of leave takers returning to their business. In an organisation of 1,000 people, this could well mean a saving of more than £150K in recruitment costs per annum.
In partnership with Bright Horizons Work+Family Solutions
Bright Horizons is dedicated to providing the best in class work+family solutions.