THE PROFESSIONAL NANNY/NANNYTAX SURVEY OF UK NANNY WAGES

Published in the January 2005 issue of Professional Nanny

Less is more

Nanny vacancies are making a comeback even if high salaries aren’t.

This year's nanny pay survey paints a rather different picture from last January, which showed an increase in salaries well beyond inflation in most parts of the country. Yet even though take-home salaries for live-in nannies in central London have gone down by 5 per cent, from £308 per week last year to £292 per week this year, and salaries in the rest of the country have remained more or less fixed, this may actually be a positive sign.

An overwhelming 72 per cent of nanny agencies participating in the survey report a definite increase in the total number of nanny placements during 2004, and 82 per cent expect to place even more nannies during 2005. Last year’s pay rises were generally considered to reflect the affluent top end of the market, indicating that families in the lower earnings brackets were opting for other forms of childcare. This year’s figures, along with the recruitment reports from nanny agencies, show that the demand for nannies is growing and also that lower-income families are employing nannies. So even though the pay levels may not be as high as in the past, they are reflecting a positive changing trend in the nanny market.

And despite the relatively small rises, if any at all, shown in this year’s survey, the cost of having a full-time nanny in central London is still very expensive indeed. The average salary of £382 for a daily nanny equates to a gross annual salary of almost £27,000. Add to this the cost of employer's NI of almost £2,850 that a working parent has to pay, and the fact that all this comes out of their own already heavily taxed income, and you are looking at a gross salary of £41,755 for one working parent just to cover the cost of employing a nanny.

PREDICTIONS FOR 2005
The majority of participating nanny agencies (55 per cent) expect that salaries will stay the same for the coming year, with 33 per cent predicting a small rise in line with inflation. Only a relatively modest 9 per cent of agencies predict that the prospects for earnings will increase in real terms.

The trend of a growing demand for a multi-tasking nanny continues. Nearly a quarter (24 per cent) of nanny agencies report that parents expect a nanny to not only look after the children, but also perform a variety of household tasks including ironing, cleaning and shopping. As more parents are making work/life balance choices and working from home, there is also a growing demand for part-time nannies. More than half of all nannies are now in part-time positions, compared with 44 per cent last year. While nannies are starting to realise that part-time jobs sometimes pay better, most qualified nannies still prefer a traditional, full-time position. Daily nannies remain more prevalent than their live-in counterparts, with agencies reporting that 76 per cent of nannies work on a daily basis.

FRINGE BENEFITS
The extravagant bonuses that were relatively common a few years ago are now few and far between. Many agencies report that very few perks are offered as standard and even the most likely perk of recent years, the use of a family car outside working hours, is now rarely on offer. Other perks sometimes seen include gym membership, a Christmas bonus, or provision of a mobile phone although this is arguably less of a perk and more an expected tool of the trade these days. In some rarer cases, contributions towards a stakeholder pension are also offered. As always, there are exceptions, and some of the more lavish benefits mentioned this year include a flat in central London, 12 weeks’ paid holiday, incentive payments if no time is taken off sick, and the use of a holiday home. But while these cases may make for interesting reading, they don't give an accurate picture of the current employment possibilities for nannies – the reality is that many nannies are offered no perks at all.

THE IMPACT OF EUROPE
This year ten new countries joined the European Union and the effect on the industry has been quite noticeable. Agencies report a large influx of would-be nannies arriving in the UK looking for work. One of the main issues facing the agencies is that the majority of applicants are neither experienced nor qualified nannies, but rather than seeking positions as au pairs or mother’s helps, they are applying for nanny jobs. Catherine Robinson of Village Nannies in Birmingham says, “We've had some good candidates from the EU, but many of them have no qualifications and have unrealistic expectations of earning potential.”

Another dilemma facing the agencies is Criminal Records Bureau checks and reference checking. While a CRB disclosure can be carried out on anyone living in the UK, it has little significance if the person has only been living in the country for a short time. A police check can be requested from the authorities of their country of origin and it is possible to get certified translations of both police checks and professional qualifications. But trying to verify references creates more problems. As Catherine Robinson explains, “We expect the same high standard from our European candidates as we do from our British nannies, and we are just as thorough when vetting foreigners, but it can take quite a long time to check references, especially if there is a language barrier.”

APPROVAL SCHEME
Another hot topic this year has been whether nannies should be registered. On 8 December children’s minister Margaret Hodge announced that a “light-touch” childcare approval scheme would be introduced from April 2005, enabling eligible parents to get some tax relief to help pay for employing a nanny. This will particularly benefit parents on a lower income and widen their childcare options. Catherine Robinson says, “Salaries here in the Midlands are on the whole much lower than in the south-east and more families should be able to take advantage of both tax credits and childcare vouchers. This could make nannies a more viable option for young families and parents who work shifts, for instance nurses.”

The approval scheme could also mean more jobs for nannies in the future. Larger families who are currently using a nursery or childminder may consider instead employing a nanny, who, with the help of tax credits or childcare vouchers, becomes a more cost-effective option, as nurseries and childminders charge on a per-child basis.

Some agencies voice concern that recruiters may become “lazy” and not carry out necessary checks on job candidates, relying on the approval system to do their work for them. But on the whole, the majority of agencies see the Government’s latest move as a positive, if incomplete, step towards greater professional recognition for nannies and more affordable childcare for a wider section of the population. It may also provide some peace of mind for parents to know that their nanny has been approved. Safety and security is paramount to parents, and many agencies are now offering enhanced CRB disclosures as part of their service. As many as 88 per cent of nanny agencies participating in the survey expect a candidate to have a CRB check in place before taking up a job, compared to 75 per cent of agencies last year. Professional indemnity insurance specifically for nannies is also becoming more popular, with nearly 20 per cent of nannies having this cover.

THE WIDER PICTURE
Overall, this year's survey reveals that while salaries have gone down or remained static in the past 12 months the number of jobs have increased, suggesting that the demand for nannies is growing and that the new nanny employers are families on the lower end of the earnings spectrum, many of whom perhaps work unsociable hours and who are choosing to employ a nanny as the provider of the most flexible form of childcare. With the introduction of the nanny approval scheme in April this trend may well continue, and perhaps the social basis for nanny employment is in the process of changing once and for all.