On The Horizon – January 2024

Jennifer Liston-Smith’s monthly review reflects on key themes, news and public policy updates in the world of combining work and family for organisations, parents and carers.

Author: Jennifer Liston-Smith, Head of Thought Leadership, Bright Horizons

2024 – A good year for working families?

Will 2024 be a good year for working parents and carers? This month, let’s take the new year as a prompt to weigh up the outlook for working parents and carers, and their employers.

A strong focus on EVP

Employers continue to have a strong focus on the Employee Value Proposition (EVP) given skills shortages. Research by esphr, reported in HR Grapevine suggests Retention is the biggest HR challenge for 2024 (followed by Recruitment, Cost of living, Employee engagement, Government changes and Legislation changes).

The CIPD responded to the latest ONS (Office for National Statistics) labour market figures in December with a quote from Senior Labour Market Economist, Jon Boys: “The labour market can be characterised as having too many jobs and not enough people to fill them.” Even though this trend is beginning to reverse, “unemployment remains low, while vacancies and wage growth remain high, albeit lower than in recent periods.” Jon Boys predicts the labour market will cool over time, easing the pressure for employers in some ways, however “The Government has signalled intentions to lower immigration, and we have an ageing population, both of which will weigh on labour supply.”

Given the competition for talent, Greg Guilford CEO of HR Solutions writing in HR Magazine urges that HR leaders should “keep the human in human resources” and set out a clear EVP. This, he says, is likely to go beyond traditional reward to include wellbeing, flexibility, environmentally-friendly working, a supportive culture, career development opportunities, enhanced family friendly entitlements and CSR (corporate social responsibility) options to work with local charities.

So, working parents and carers – along with other employees – should find employers are still in listening mode, which is a positive. From the employer’s point of view, the CIPD’s Jon Boys adds: “2024 is also likely to be the year that generative AI embeds itself into business processes boosting productivity which has been lacklustre since the financial crash”. So potentially a positive mood for both workers and employers?

Extended Childcare Funding

Another positive promise on the horizon for working parents in England is the proposed extension to funded childcare places. 15 hours of funded early education and care are set to be offered to most working parents of 2-year-olds from April and a similar 15 hours for babies from 9 months in September (fitting alongside the existing allowance for 3-4-year-olds). Next year, in September 2025, the intention is to fund 30 hours of early education for eligible working parents of children from age 9 months to 5 years.

Importantly, parents need to apply for an eligibility code through the Childcare Choices website, by the end of March (applications opened on 2nd January and it is best to start the process as soon as possible in case further information is needed).

There are some conditions. Each parent must be working, and earning, at least the equivalent of 16 hours a week at the national living or minimum wage. And each parent must earn less than £100,000 a year. The places are also only available during ‘term-time’ meaning 38 weeks a year. So, if averaged across the year, next year’s 30 hours will amount to just over 22 hours a week.

Demand for places is likely to be high, especially since there has been a continuing wave of nursery closures, particularly among smaller providers who have struggled with recent sustained high energy and food costs and also the pending increase in the National Living Wage.

Perhaps for these reasons – the eligibility and term-time limitations on the funded places and the competition for availability – leaders are predicting that employers will continue to play a key role in ensuring employees can access quality, affordable, accessible childcare. The Times featured expert opinion on wider trends for 2024 in which Mark Dixon, founder and CEO of flexible workspace operator IWG chose as one of his: “Companies will play a bigger role in childcare … employers will start playing a bigger role in supporting working parents to ensure they can maintain a diverse and skilled workforce”.

So, if more employers do join in to flesh out the availability of – and access to – care, this could also be a positive element of the year for working parents. Without further support, there could potentially be some disappointments and frustrations.

Of course, with an election coming – in the Autumn or otherwise – we can imagine there will be further promises made to working parents as a vital section of the electorate, such as Labour’s suggested plans for school-based nurseries.

New family-friendly rights

As reported regularly here in On The Horizon, including in December, several extended family-friendly regulations are due to come into effect from April this year. These include longer protection from redundancy following parental leave; access to neonatal leave and pay, the introduction of a week of unpaid carer’s leave and slightly more flexibility around the way parents take the 2 weeks of paternity leave.

So, there are positives here for working parents and carers; and value too for employers when this group feels more able to continue and progress their careers alongside family life.

That said, the disparity between maternity/adoption leave and paternity continues to trouble the current generation of parents who tend not to see family roles as segregated along gender lines. An example can be seen by taking a look at the positive news story in HR Grapevine on retailer Lidl doubling its maternity and adoption policy enhancement to 28 weeks’ full pay. When posted on LinkedIn, the story drew in well-earned positive applause but also a sizeable proportion of comments about the gap between maternity and paternity leave.

As our 2023 Parental Leave and Family Support Benchmark revealed, there is growing enthusiasm among employers for equal enhanced parental leave. Overall, the tendency both towards longer enhanced leave and towards putting in other supports such as coaching and help with care – covered in the Benchmark – make for some positive times ahead.

More flexible working

The other much-discussed legislative development is the coming Day 1 right to request flexible working, also passing into law in April. Among many of the 400+ leading UK employers we work with at Bright Horizons, discussing flexible working from Day 1 (or during hiring) is already the norm. The new right however will make a difference for those working for employers who have not so readily embraced flexibility as part of the culture.

Coming back to Mark Dixon, of IWG: remember his prediction above, under Childcare Funding that employers would get more involved in childcare? That was his second prediction. His first was: “Big business will start hiring chief hybrid officers … Major companies on both sides of the Atlantic will hire C-suite level executives to oversee and optimise the hybrid working environment.”

Flexibility is as least as much about time as it is about location; however, the prediction on hybrid does chime with findings from the British Chambers of Commerce (BCC) Insights Unit and technology firm Cisco. Here, fewer than 30% of employers expected their workforce to be fully in person at their offices and workplaces over the next five years while 16% expected them to be mostly remote and 8% fully remote. The research covered over 1,000 businesses; that said, 96% were SMEs.

Concerningly, ACAS has pointed out that 7 out of 10 employees are unaware of the coming day one right to request flexible working, which suggests that some employees who need to make work fit with family life from day one could be missing out on asking for this. To get the most from this change in 2024, employers should take a lead on ensuring managers understand the links between good work-life fit and productivity, seeing flexibility not as a favour for employees but as the way to ensure people (whatever their life circumstances) can best deliver their work goals in a way that also works for them.

And possibly better cash flows?

The National Living Wage (NLW) will increase by over £1 an hour from April 2024, which is a positive for many employees. National Insurance (NI) main rates have also fallen from January 6th from 12% to 10%.

However, according to the Resolution Foundation, the NI adjustment will help higher earning workers more than lower earners. And gains may be offset by the impact of tax thresholds remaining fixed, as well as the context of high mortgage rates. So, a mixed picture there.

Bright Beginnings and Bright Spaces

Among the Bright Horizons UK team, there is however quite a bit of unequivocally positive news helping working parents.

Firstly, Caroline Wright MBE, our Director of Early Childhood was recognised in the King’s New Years Honours list. Caroline’s Bright Beginnings curriculum and Nurture approach have generated excitement at international conferences in recent years (such as the World Forum Foundation in Florida and Panama among others) as well as – more importantly – making a difference day to day for both children and early years educators. At the heart of Caroline and her Early Childhood team’s approach is the knowledge (and evidence base) that emotional resilience is just as important as other early childhood foundational skills, such as counting and literacy. Practitioners have benefitted from the Nurture approach’s focuses on the significance of the adult role as educators, and the importance of secure attachments between children, families and the key person.

A further positive is the ongoing focus on fundraising for Bright Spaces supported by the Bright Horizons Foundation. This year will see the opening of the 100th UK Bright Space. Recent and upcoming fund-raising efforts by Bright Horizons colleagues (among many others) include HR Director Janine Leightley’s Boxing Day dip and Client Services Manager, Severica Turner’s Mount Kenya climb. Bright Spaces are safe, enriching, and nurturing play environments in domestic violence refuges, homeless shelters, child protection interview suites and prison visiting areas.

These contributions make a clear and lasting difference. Other changes ahead promise both positives and also some limitations. For working parents and carers in 2024, much will depend on the way employers seize the opportunities to leverage family-inclusive working as a talent strategy, seeing investment in care and other family supports as part of enabling talented people to flourish and deliver ambitious work targets for the year ahead.