GUEST POST BY Anna Michielsen, GENERAL MANAGER, ECA AUSTRALIA, NEW ZEALAND AND PACIFIC
The recognition of childcare and pre-school’s contributions to a child’s social and academic development, and the increasing importance of work to parents’ lives has seen the global childcare landscape shift considerably. Childcare and pre-school have become more formalised and structured, and many countries have adopted minimum standards and staff qualifications. These changes, along with inflation, have driven large increases in childcare costs.
So, how are organisations supporting globally mobile employees with childcare costs, particularly in countries where costs are significant, and in situations where globally mobile employees may pay full costs due to ineligibility for government childcare subsidies or rebates, because they don’t meet subsidy criteria such as citizenship, permanent residence etc.?
Australia restricts childcare subsidies to citizens, permanent residents and a few special visa classes, generally excluding common work visa types from eligibility, and many other countries, for example, the USA and Singapore also apply eligibility criteria linked to citizenship and/or permanent residence status. Some countries apply less onerous restrictions linked to tax residency rather than immigration status.
ECA benchmark data shows globally only around 22% of organisations pay for, or contribute to childcare costs for their international assignees. There is, however, global variation, with Asian HQ organisations much less likely to pay for childcare, and benchmarking for Australia, New Zealand and European HQ organisations showing ~40% paying towards childcare costs for their globally mobile employees. The trend is for more organisations to contribute to childcare costs for international assignees and this trend is expected to continue.
In determining the amount to pay or contribute towards childcare organisations take a variety of approaches; some set a maximum financial limit, others aim to replicate ‘free’ or ‘subsidised’ childcare at the level provided in the home country, whilst others look at a comparison between home and host costs. For organisations with diverse global workforces these more targeted, or sophisticated methodologies, whilst more cost-effective can be administratively challenging if not streamlined within a technology solution.
Ultimately if, and how an organisation contributes to childcare costs is largely determined by organisation objectives, and cost-benefit. For example many organisations have targets to increase the diversity of their globally mobile workforces, including participation of women. ECA’s benchmark data demonstrates women are significantly underrepresented as international assignees and increasing the number of female assignees presents the potential to open the talent pool, which can be extremely valuable in the face of talent shortages.
To diversify globally mobile workforces many organisations are taking steps to address the barriers to diversity, with the below graphic showing the % of organisations addressing this.
Lack of, or the expense of, childcare is a real barrier to women participating in international assignments, and a way to address this is for organisations to contribute to childcare costs. For many organisations, however, the significant costs involved make critical the value of policies to support childcare can be demonstrated.
How much does childcare cost around the world?
The global average annual cost of full-time childcare is USD 13 000, but costs can vary significantly by country. The United States remains top of our rankings for childcare, with average annual costs of USD 43 400 – with this representing the cost where eligibility (citizenship etc.) for government subsidies is not met. The graphic below shows other countries with extremely high childcare fees.
If you have questions about the content of this article, ECA International benchmarking data or global talent mobility technology solutions, reach out to Anna for a chat.
ABOUT THE AUTHOR
Anna Michielsen is ECA International’s General Manager for Australia, New Zealand and the Pacific and is based in Sydney. ECA International provides leading global mobility technology solutions, data and expertise to help organisations effectively manage compensation and benefits for their internationally mobile workforce.
Anna’s career at ECA started over 12 years, first as a Senior Consultant, then moving into the General Manager role for this region. Prior to ECA, Anna had more than 20 years’ experience in corporate HR and remuneration roles with companies in the technology, finance, FMCG and government sectors. These roles have encompassed strategy and reward alignment, employee engagement and organisational values transformation. Career experience in the corporate world has given Anna great insight for a role with a service provider.
Managing ECA’s regional Pacific team is a diverse and interesting role – from delivering day to day client solutions through to mobility policy and software projects Best of all is working with ECA’s great clients across of wide range of industries and organisations. Anna is an ‘Expert Mentor’ for TEMi and a supportive member of our talent mobility community.
