Is it worth the cost to use a nanny agency?A very good question - with a very complex answer
By Michael Gerard
Executive Director, Childcare Solutions
The biggest obstacle parents face when hiring a nanny and becoming what the IRS and Dept. of Labor call a "Household Employer", is that parents "don't know what they don't know".
You could learn everything needed and then execute a top-notch search, interview dozens of applicants, hire someone, create a written work agreement and be legally compliant - on your own. It's just much more time consuming than working with a professional nanny agency that has years of experience making thousands of placements. On your own, the odds are much higher of missing something that you didn’t even know about.
Knowledge is only part of what goes into a nanny placement/hiring. There is no substitute for experience. Nanny agencies have gone through the recruting, screening and placement process many, many times. We know the legal complexities of tax laws and labor regulations. We know the signs of a bad nanny candidate. And we know what how to get a care relationship off on the right footing to improve the chances of a long term mutually beneficial relationship between the family and their care provider.
For example, conducting a search on your own using online search sites, classified ads and word-of-mouth can be very effective. But then you are ‘on your own’ to screen through dozens, sometimes hundreds of care provider profiles just to find the few who are qualified for the position, available to work the schedule and close enough to you for it to be a comfortable commute. And that just gets you to a list of care providers that you want to interview. Then you have to know how to interview, verify references and create a legally compliant work agreement.
Did you know...
8 of 10 job applications and resumes are inflated
as to work experience, education and/or references
Agencies, in general, reject up to 85% of the applicants who come to them due to lack of experience or some flaw that becomes apparent during the agency’s screening process. (And those ‘rejected’ candidates all go to register in the ‘online’ search sites – because they don’t get screened the same way as with an agency.)
With an agency, you will only be talking to candidates who have been Pre-Screened for your family – interviewing only applicants who have the skill-set and experience you are looking for (and need) and who live close enough to commute safely and reliably (for a live-out position) to your home.
When you’re working with an agency that has been around a long time, the chances are good that they have first-hand experience with the care-providers they are referring to you because so many of their registered care providers have worked for other clients of the agency in the past.
For example, at our agency, we meet with every candidate in person; we have interviewed them carefully, taken their hand-written application, checked their references and run a criminal background check. And more than half the nannies we send out on interviews have worked for our client families in the past: so we know them - we know the work they have done – and we know many of their references.
Legal compliance with labor regulations, payroll and tax laws are the second area where an agency can provide enormous value. An agency should guide you through establishing a solid foundation for your employee/employer relationship helping everyone negotiate a legal and beneficial work agreement. By creating a work agreement that gets both parties expectations down in writing, the agency will help you avoid most of the common conflicts that so often come up between nannies and their employers.
Another benefit of working with an agency is the on-going support: having someone to call for professional advice, back-up care for when you nanny is out ill, on sick leave or vacation. Again – it’s nothing you can’t do on your own... but it takes a lot of time to prepare and update your back-up plans – and you have to keep all of those plans updated so they are available to you when you need them.In the end, determining the value of using an agency to hire a nanny is no different than determining the value of hiring any other professional. You can certainly do your own taxes, but most people of even modest means hire a tax preparer to make sure it’s done right and to minimize their tax liability and the time involved. You could spend all summer building a deck on your home – or you could hire a contractor and have it done in a week or two.
There’s a good reason that virtually all medium to large companies use employment agencies to bring them qualified employee candidates – and they spend between 30% and 50% of the position’s annual salary for the convenience. Nanny agencies generally charge about 1/3 that amount – many, much less. In relative terms, that’s high value!
It’s all about the value proposition: how much is your time worth? Are you willing to invest the time to do the job right the first time? Do you even have the kind of time required to become that well versed in the process? Can you afford to go through the entire process again in a few weeks or months because you missed something you didn’t even know about? You are about to start spending $25,000 to $40,000 or more per year on private child care. For many families, investing what usually amounts to a few weeks of nanny salary in the first year to hire and retain a care provider who may be with you for years to come is a very smart investment.
In our 20+ years experience, with over 11,000 care provider placements made, we know that using a nanny placement agency is of very high value to families.