Employee Appreciation Day: how should employers react to the childcare crisis?

Kids. As the saying goes; can’t live with ‘em, can’t live without ‘em. And for today’s parents, that conundrum has never been more pronounced.

Lack of care options (the Coram 2022 Childcare Survey shows that only 59% of local authorities have enough childcare provision) is sending nursery fees skyrocketing, making a full-time career increasingly unaffordable for working mothers and fathers.

Naturally, the change is affecting labour figures. It’s no coincidence that, at the same time parents – typically mothers – are being locked out of the workforce, employers are grappling with a talent crisis that has seen many unable to fill hiring gaps.

Caregivers and business owners alike are now clinging to fragile hopes that the government will unveil financial support in the upcoming Spring Statement.

On this very special Employee Appreciation Day, we ask Brett Wigdortz, cofounder of childminder agency, tiney, for his thoughts on how employers can help tackle the problem.

What’s causing the childcare crisis?

The childcare crisis is certainly not a new issue. Wigdortz, himself a father to two teenagers and a ten-year-old, recalls having to cobble together several different solutions to ensure the children were being properly looked after.

“It was definitely an issue for us,” he nods. “My wife took a couple of years off. For a few years the kids went to a childminder, then local nurseries. Even my oldest helped to bring the youngest to school.”

Nonetheless, as Wigdortz confirms, supply shortages have definitely heightened in the past decade.

Between 2021 and 2022, the number of childcare providers in the UK dropped by 4,000. Industry leaders have blamed the government for the dissipation, and what they claim has been ‘deliberate underfunding’ of the early years sector since 2011.

“It’s a perfect storm to bring costs up,” is Wigdortz’s assessment.

Up is an understatement. On average, the weekly nursery fee for parents in the UK in 2022 was £105.76, according to the Coram 2022 Childcare Survey. Based on government data, this is 16% of the median weekly wage for a private sector employee.

Wigdortz started tiney as a way to combat the surge. He previously founded Teach First back in 2002, an employment-based training course designed to overhaul the staff shortages currently plaguing the UK education system.

Then, in 2018, Wigdortz spotted a similar need for a fast-tracked development programme that could help more people to access childminders.

“There’s no-one out there who’s helping childminders to be successful,” he comments. “When you want to become a childminder, it’s not necessarily the cost that’s a blocker, it’s more the faff of the admin. That’s one of the main things we help them with.”

Nationally, he tells Startups, the cost of a childminder is 10% lower than private day nursery fees (6% in London). Demand for the service has – unsurprisingly – shot upwards in the past year. Wigdortz is stunned by the figures himself as he outlines them.

“Last February, we had about 800 children using the service,” he reports. “Now, we’ve about 1,960, so almost 150% growth.”

How is the childcare crisis affecting employers?

Childcare can no longer be considered a personal problem for the individual to deal with. The impact of the crisis on staff, in terms of financial and emotional stress, means it is now firmly a business issue.

It goes without saying that parents who cannot afford childcare will be forced to put their family before work. Of the few options available, most choose to cut their hours.

The latest government statistics show that 49.7% of families have at least one adult choosing to work part-time, leading to a severe drop in output for the organisation.

“We are undergoing a real productivity crisis,” says Wigdortz. “There’s a lot of people who are not in the workplace who should be – a lot of whom are parents of small children.”

Resultantly, small businesses are struggling to hire talent as fewer qualified individuals remain in the workforce.

This has an immediate financial impact, due to the cost of sourcing and onboarding new employees. But there are other, knock-on effects, including:

1. Stretched workloads leading to more stressful work environments
2. Loss of the mother’s or father’s experience and knowledge, widening the skills gap
3. Stretched rotas exacerbating the crisis by forcing more parents to cut down on hours for caring duties

What is the government doing to help?

At present, state-support is very limited when it comes to free childcare. Tellingly, an OECD report placed the UK as the least affordable nation for childcare globally. 

The rules are also complicated and can differ depending on where the household is based.

In England, for example, government funding means parents get 570 hours of free childcare a year – equalling around 15 hours a week. Parents of three to four year olds get an additional 15 hours of free childcare per week (up to 1,140 hours per year).

Given that full-time work is generally 1,820 hours a year, that leaves a considerable funding shortfall for parents to subsidise.

“It’s very complicated for parents,” Wigdortz acknowledges. “All the different payment schemes and support schemes don’t gel together. What you get for two year olds, three year olds – it doesn’t make sense.”

Wigdortz, who has been an advisor for the government on the issue, professes hope that the government’s Spring Statement will do more to narrow the finance gap between day nurseries and primary schools.

“It’s not worth staying in a job if you’ll be paying more for childcare than you’ll get from employment,” he concedes.

Amongst his suggestions for ‘the perfect world’ solution, is for the government to unify early years and primary school support. This, Wigdortz says, would ensure that all children have access to high-quality, early years care from the time they’re born until they start school.

“It would cost more money,” he pitches, “but it would also get massive returns on an investment. In the short-term and long-term, we would improve productivity rates. More parents go back to work, and their children have better education for their future careers.”

Women are being disproportionately affected by the crisis

There are also Diversity, Equity, and Inclusion (DEI) considerations. While the number has increased post-pandemic, official figures still indicate that only one in nine stay-at-home parents are fathers.

In a study by Ipsos and Business in the Community (BITC), 58% of women said that caring responsibilities had stopped them applying for promotion or a new job. 19% even admitted to leaving a job because it was too hard to balance work and care.

By contributing more support to carers, employers can better address the unfair burden being placed on mothers – and give managers a wider pool of talent to recruit from.

As Wigdortz notes, every action taken will also lead to progress in the fight against the gender pay gap (which stood at 8.3% in April 2022).

“Any government that cares about female empowerment has to look at the childcare crisis,” he states. “It is the major reason that the pay gap exists, because a much higher percentage of women are out of the workforce.”

How can employers better support parents in the workplace?

Employee Appreciation Day is an opportunity for business owners to recognise the hard work and efforts of their staff and ultimately foster better relationships between employees and their employers.

Designing a range of employee benefits and perks, focused for parents, is a good place to start.

Large-scale employers are already ahead of the curve. In January, the Bank of Ireland introduced a wave of family leave policies that colleagues can use ‘from day-one’ of employment.

Of course, in the current climate, small businesses might not be able to go above and beyond in tackling the childcare crisis. But in the absence of comprehensive government aid, it is crucial that companies do the best they can to support working parents.

More accommodating working policies are a start. Amongst the options, businesses could introduce a hybrid working arrangement. Staff are empowered to choose whether to work from the office or from home, making time for care duties like doctor’s appointments.

Wigdortz warns against seeing home working as a catch-all solution to the childcare crisis, however.

“Anyone who’s a parent of a small child knows that children need full-time childcare,” says Wigdortz. “I think the advantage of working from home is you can be more flexible.”

On the more extreme end is the four-day working week, a reduced-hours policy that gives workers the option to complete their job role in four days, rather than five. Flexi-hours allows the staff member to bank any extra hours worked to take from a future working day.

Gaining accreditation from trusted organisations, like Flexa Careers, will help parents who are job-hunting for guaranteed flexible providers to find your company more easily.

Smaller changes can still help to reduce money anxiety. Communicate clearly any financial help your company can offer, such as subsidies for childcare assistance or business healthcare plans.

Wigdortz offers his employees a 50% discount on all tiney childminders. He underlines that the vast majority of tiney’s forty team members are also new parents – likely as a result of this child-friendly scheme.

“We probably have about a quarter of our staff who are, either now or at some point, using tiney nurseries,” he relates. “tiney attracts them because they understand the issue and the problem, and it’s something that they’re excited to try to solve.”

Who will take care of the problem?

Like Whitney Houston, we believe that children are our future. To teach them well and let them lead the way, parents need tangible subsidies to counter what has become an untenable crisis in the childcare industry.

Companies should take the crisis seriously. Parents being priced out of a career has disastrous consequences for businesses, which are already struggling under inflationary pressures.

Ideally, the government will acknowledge the exigency of the issue in its upcoming Spring Statement. While finding a solution is not exactly child’s play, the benefits it would bring to employers and employees alike are too great to ignore.