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How Child Care Benefits for Employees Can Enhance Well-Being (and Benefit Employers, Too)

Juggling a job and child care is no easy task for working parents. The ongoing child care shortage and rising child care costs in the U.S. have made it even more challenging. But it’s not just a personal issue, it’s also a business issue. When employees don’t have reliable child care, employers risk reduced employee productivity, increased turnover, and caregiver burnout. Read on to learn how child care benefits for employees can help ease the child care burden to support employee well-being and foster a caring work culture.

Child care has been in the news a lot lately due to the “child care cliff,” or the expiration of funding to help stabilize the child care sector during the pandemic that was part of the 2021 American Rescue Plan Act (ARPA). Because the funding was not renewed on September 30, it’s estimated that more than three million children could lose access to child care nationwide and seventy thousand child care programs could close.

According to the Center for American Progress, half the country is already considered a “child care desert”—in other words, places where there is no child care supply. To make matters worse, it remains extremely expensive for parents to send children to daycare. Child Care Aware® of America reports the average annual cost of child care is more than $10,000 per year for one child; in some states, it’s as much as $15,000 to $20,000 per year. To put it in perspective, the child care bill is often more than the price of a mortgage, rent, or public college tuition in most states.1

The child care crisis directly impacts employers.

One third of the U.S. workforce, or an estimated 50 million workers, has a child under 14 in their household. Of these workers, 30% have children who are all under the age of 6.2 Which means there is a significant proportion of the workforce that needs reliable child care in order to work.

While child care is viewed as an individual responsibility for parents in the U.S., it’s easy to see how this situation directly impacts employers, and why it’s truly a business issue.

  • Lost productivity. As any parent knows, it’s hard to stay focused at work when you’re worried about child care. In fact, data before the pandemic showed that inadequate child care cost employers $13 billion a year in lost productivity.3
  • Turnover. When good employees leave because they can’t find child care, there are real costs to hire and train their replacements—to the tune of three to four times the employee’s salary. We saw a striking example of this during the pandemic when more than two million women quit their jobs because they couldn’t find child care—leading economists to coin the term, “she-cession.”
  • Employee health and well-being. When working parents are stressed about child care, they’re more likely to suffer from mental health concerns, like depression and burnout. Scrambling to find child care or cobbling a patchwork of options together also leaves little time for self-care, which we know is essential for a healthy, balanced life.

When child care is viewed as a business issue, both employees and employers benefit.

The benefits of offering childcare to employees include the ability to:

Attract and retain talent.

A McKinsey survey of parents with children ages zero to five found 83% of women and 81% of men said that child care benefits would be a very important or somewhat important factor in deciding whether to stay at their current employer or switch employers. A Care.com Future of Benefits 2022 survey found that that 57% of employers were planning to prioritize child care benefits to better attract and retain talent, making it a real differentiator in the job market.

Meet the needs of the next generation of parents.

The proportion of millennials and Generation Z employees in the workplace is rising. Even if these employees don’t have families at the moment, they are likely planning ahead for when they do. We know that these generations—more than any others to date—are attracted to working at companies with family-friendly benefits, including assistance with child care.

Achieve diversity, equity and inclusion goals.

According to Willis Tower Watson, as companies look to foster a diverse, inclusive and equitable workplace they are adding family-friendly benefits like child care and caregiving leave that help level the playing field. These benefits also help to improve gender diversity and “demonstrate that the company values women’s contributions to the workplace.”4

Demonstrate a culture of caring, empathy, and concern for well-being.

Employees want to work for organizations that see them as people first, workers second. They want employers to recognize that in order to be productive at work they need support for life outside of work, including help with child care.

Ideas for how to offer child care benefits to employees.

Before implementing any kind of child care assistance it’s important to survey employees to find out exactly what they need. Make sure the survey includes employees of different backgrounds and roles in the organization to ensure everyone is represented. If you have a parenting Employee Resource Group, be sure to solicit its input as well.

As you review your employee benefits package, explore options that ease the child care burden, such as:

  • A child care voucher or stipend parents can apply to any kind of child care arrangement
  • After school programs to close the gap between the school day and the workday
  • Back-up or emergency daycare, either onsite or at a local provider
  • Child care referral services to help employees find trusted and suitable daycare providers, nannies, or babysitters
  • Dependent Care Flexible Spending Accounts that let employees pay for child care with pre-tax dollars
  • Discounts at local child care centers
  • Employee Assistance Program (EAP) child care locator services
  • Free or subsidized onsite daycare
  • Paid parental leave that eases that initial child care burden and allows parents to bond with children and adjust to parenthood
  • Paid sick time off to care for a sick child

Many child care challenges can actually be overcome with flexible workplaces policies that give workers greater autonomy over when and where they work, like:

  • Hybrid or remote work arrangements
  • Flexible start and end times to allow parents of school-age children to attend to their needs
  • Predictable schedules for shift and service workers so they can plan for child care
  • Reduced workload or job sharing
  • Alternate daycare packages that reflect hybrid work schedules (for example, a Tuesday, Wednesday, Thursday offering)

Without a federally subsidized child care arrangement in the U.S., the burden of child care will continue to fall to individual families. Organizations who want to attract and retain the best talent—particularly women—and have healthy, engaged, productive employees should consider how they might be able to offer benefits to help employees ease this burden.

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