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The cost of childcare and its impact on the employment market!

The above picture has been doing the rounds on social media and on first glance you think there must be mistake.  After a few quick calculations, however, the figures start to stack up.

A standard calculation of an annual salary of 40k would equate to a monthly take home of £2540.  We then need to start factoring in pension contributions and travel costs which could easily be another £400 a month.  Once you have bought a few work suits and shoes, you are not far off a real figure of £2000 a month.

The money advice service, quote an average full time childcare cost at £226.36 a week which is c£980 per month per child – https://www.moneyadviceservice.org.uk/en/articles/childcare-costs

When you start looking a figure of 2k a month for childcare, all of a sudden there is not a lot left of that 40k annual salary.  In reality there is only likely to be a small window where at least one of the children is not eligible for the free early education or childcare allowance.  Nevertheless, it is still a huge financial consideration.

I appreciate that there are of course other factors to consider, but when we look at this from a purely mathematical angle, you can soon understand why a lot of people would make the decision to leave the full-time employment market.  If you have no family for instance to help with childcare, then you are very much looking at a break-even point.

My interest in this is from a HR and Talent point of view.  With so many people leaving the employment market, at a time when they are likely to be experienced and credible operators, many employers are missing out on a high-quality talent pool due to their inability to think flexibly and offer working practises outside of the traditional office based 9-5 culture.

Often when I ask people about flexible options, there is almost an immediate reply that it wouldn’t work because of this, that or the other.  A simple shift in thought process to “actually it could work because of x, y or z” would open up a wealth of opportunity to hire some very capable people.

Ricardo Semler in his book “The Seven-Day Weekend” talks a lot about trusting your employees to make sensible decisions.  One quote from the book explains how Semco employees set their working hours.

“Now Semco employees are free to customize their workdays, to come in earlier or later than traditional schedules. The hours they work are determined by their self-interest, not by company dictates. They’re the best judges of the amount of time and the proper place necessary to get their job done.”

In this instance if you have an employee that you trust enough to employ on a 40k salary, who in turn has responsibility for 2 children, then it makes reasonable sense to me that they are qualified enough to have a real input into the best way to get their job done whilst also balancing their outside commitments.

It begs the question that if more employees had the opportunity to shape their work commitments in this way, how much could they shave off things like childcare costs which in turn would make returning to full time work more feasible and give employers so much more choice when looking at both their Resourcing and/or Retention strategies.


“Paul Withers is an experienced HR Recruiter with extensive exposure gained across a diverse range of industry sectors. Equally happy working at entry through to director level, he is well placed to advise on any recruitment or job search challenges that you may be currently facing.