Crash course in... The company creche

One of your best people has just quit because she says she can't work for you and look after her children.

by Alexander Garrett
Last Updated: 09 Oct 2013

In her exit interview, she pointed out that her new employer runs an on-site nursery. HR says some help with childcare would be very popular, but where do you start?

Why bother? Childcare provision can be a key factor in employee retention. In a survey conducted by nursery provider Bright Horizons, 42% of parents said childcare provision had been an important factor in taking their job, and 19% had turned down another job rather than lose their workplace childcare. Employers will also benefit from improved morale and job satisfaction and reduced absence.

Is it viable? First, take a 'needs audit', says Purnima Tanuku of the National Day Nursery Association. 'Find out how many children are likely to use any facility you provide, and what parents are looking for. Some may have other arrangements and won't want to change.'

Weigh the options. The main ones are: establishing an on-site nursery; negotiating space at existing independent nurseries; and offering childcare vouchers so employees can shop around for the childcare that suits them. An on-site nursery offers convenience to your employees, and the service can be tailored around your business, particularly if shift working is used. Says Angela Baron of the CIPD: 'In the majority of cases, vouchers are the best option because they're simple to set up and they allow people to choose what's best for them.'

Think ad hoc. As well as long-term day-to-day childcare, you might consider running a holiday club if your employees have childcare problems during school holidays.

Read the rule book. Before you go into the childcare business, bear in mind that it is highly regulated. For example, you can't use any old building for a day nursery, it has to conform to strict health and safety rules. 'Even the choice of furniture has to fit in with Ofsted's requirements,' says Tanuku. If running a nursery isn't a core activity, you'd be better off bringing in a specialist company, such as BUPA, Bright Horizons or Asquith Nurseries.

Be even-handed. Be wary of favouring one group of workers over another when offering childcare places or benefits - this can be a very emotive issue. However, there may be an argument for giving preference to one group for strategic reasons - for example, if a particular shift is difficult to fill.

Make it tax-efficient. You can give employees up to £55 a week towards childcare, exempt from both income tax and National Insurance. Says Baron: 'If you have a flexible benefits programme, people can opt to take more of their remuneration in vouchers, knowing that it is tax-free.'

Do say: 'Providing quality childcare facilities is all about making this an attractive place to work.'

Don't say: 'If we make that disused boiler room into a childminding facility, we can get the parents working longer hours.'

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