Providing Childcare to Employees Through Flexible Benefits

Recent statistics from Statista reveal that the workforce comprises approximately 3.71 million (11.7%) Baby Boomers, 11.4 million (36%) Gen X workers, 12.2 million (38.6%) Millennials, and 4.3 million (13.6%) Gen Z employees.

Gen X and Millennials collectively represent 74.7% of the total workforce. Assuming approximately half have families, about 40% of workers face family responsibilities. This significant demographic reports increasing stress over the high cost and limited availability of childcare services in the UK.

Organisations have invested considerable resources, time, and energy into enhancing employee benefits packages to address recruitment and retention challenges. However, these efforts may prove futile if childcare responsibilities prevent employees from performing optimally.

This Pacific Prime UK article examines childcare challenges in the current workplace environment and explores potential solutions that can help employees manage their family responsibilities while enabling employers to improve talent recruitment, retention, and employee satisfaction.

Understanding Employees’ Need for Childcare

While the U.S. Department of Health and Human Services defines affordable childcare as costing no more than 7% of a family’s household income, the truth is that working parents currently spend an average of 24% of their income on these services.

Research indicates that 65% of parents have experienced waitlists for daycare centres, with 81% spending over four months on multiple waitlists simultaneously.

These findings demonstrate that working parents need both financial support for childcare expenses and flexible time-off policies to bond with their children when childcare is unavailable. Employers can address these challenges by incorporating comprehensive childcare benefits into their employee benefits packages to meet the needs of working parents.

Childcare Benefits through Flexible Benefits

There is no one-size-fits-all approach in benefit provision, and the best way to satisfy all employees is through flexible benefits. A flexible benefits program allows employees to engage in the benefits selection process, and customise their benefits package according to their specific needs.

There are two distinct advantages of providing childcare support through flexible benefits:

1. It allows the creation of a childcare flexible spending account, where the expenses can be settled with credits in the account. Employees can also contribute to the account, deductible from their gross income, allowing them to reduce taxable income.
2. It offers a convenient way to subsidise childcare expenses. Employers can pay their employees reimbursements, one-time allowances, and periodic stipends (monthly, quarterly, or annually).

By addressing individual employees’ need for childcare support, employers are expected to see satisfied employees, reduced employee absenteeism, and enhanced overall morale and performance—and all these factor into how well a company can attract and retain valuable talents.

Employers might worry about the cost of childcare provision, but the research by consulting giant Boston Consulting Group (BCG) found that employer-offered childcare benefits can deliver a favourable return on investment (ROI) of up to 425% of their cost, and a program that retains as little as 1% of eligible employees is sufficient to cover the cost of offering the program.

Devise Your Insurance Strategy with Pacific Prime

Childcare support has emerged as a demand by a significant proportion of the workforce, employers can seize this opportunity to evaluate their benefits package to ensure that childcare can be provided to those who need it. And Pacific Prime is here to help you achieve this with ease.

Established in the insurance industry for over two decades, we leverage our one-stop flexible benefits platform to provide comprehensive insurance solutions to our business clients. The platform features a wellness e-shop, real-time lifestyle assessment, paperless claims, and a user-friendly benefit selection process.

Read more about flexible benefits and our Flex Benefits Portal here.

Are you interested in implementing flexible benefits as your employee benefits package? Pacific Prime has years of experience helping businesses of all sizes attract top industry talents and achieve their business goals. Arrange a benefits review with our expert advisors today!

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Eric Chung

Content Creator at Pacific Prime UK

Eric is an experienced content writer specializing in writing creative copies of marketing materials including social media posts, advertisements, landing pages, and video scripts.

Since joining Pacific Prime, Eric was exposed to a new world of insurance. Having learned about insurance products extensively, he has taken joy and satisfaction in helping individuals and businesses manage risks and protect themselves against financial loss through the power of words.

Although born and raised in Hong Kong, he spent a quarter of his life living and studying in the UK. He believes his multicultural experience is a great asset in understanding the needs and wants of expats and globe-trotters.

Eric’s strengths lie in his strong research, analytical, and communication skills, obtained through his BA in Linguistics from the University of York and MSc in Teaching English to Speakers of Other Languages (TESOL) from the University of Bristol.

Outside of work, he enjoys some me-time gaming and reading on his own, occasionally going absolutely mental on a night out with friends.

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