Balancing the roles of parent and employee is a huge challenge—one that more than 41 million workers have to navigate daily. The onset of COVID-19 has only intensified this struggle as working parents face uncertainty around how to make child care decisions and attempt to integrate their work and home lives.
Despite these challenges, a survey we recently conducted found that more than half of working parents don’t feel supported by their employers when it comes to child care challenges during the pandemic. In this article, we’ll explain why HR teams should consider introducing child care benefits to help their employees—especially now as working parents are struggling to keep their heads above water.
What exactly are child care benefits?
Before we dive into the reasons to provide child care benefits, let’s define what this offering is. While every company structures their benefits differently, child care benefits typically involve giving employees a budget to use on relevant services or reimbursing an employee after they’ve paid for the services they need.
There are a wide range of services that qualify as child care benefits. Examples of these include:
- Child care centers
- Babysitters or nannies
- Tutoring services
- Behavioral coaching
- Mental health counseling for parents
- Dependent Care Flexible Spending Account (DCFSA)
- Emergency or backup child care services
As an HR leader, you might be wondering: there are tons of other benefits I can offer my employees right now. Why should I prioritize child care benefits for our organization? This is a great question! We’ll explore the benefits of this offering in the next section.
4 reasons to offer child care benefits to employees
Child care benefits aren’t for everyone. If your organization doesn’t have a significant number of working parents, or if your employees have indicated an urgent need for a different type of offering, then child care benefits may not be relevant for your workforce. But if you do have working parents, they are likely in desperate need of increased support during the pandemic. Here are four reasons to bolster the case for child care benefits.
1. Reduce turnover rates
There’s a growing appetite for child care support amongst employees—especially now when 46% of parents have reported worsening mental health as a result of COVID-19. As demand continues to increase, a company’s decision to offer child care benefits (or not) can have a strong influence on whether an employee stays with an organization or leaves. In fact, the Journal of Management found companies that introduced child care benefits had lower collective turnover rates for female employees in subsequent years.
Losing employees can be costly for the business. Studies have found that it costs employers around 33% of an employee’s annual salary to hire a replacement if that employee leaves. So if you have a top performer who earns $80,000, it’ll cost at least $26,400 to find someone to fill their role. Compare this to the average amount paid annually for child care benefits, which is around $1,600 per employee. It’s clear that child care benefits are well worth the investment.
2. Provide financial relief
Child care services are expensive. On average, a family making the state median income would have to spend 18% of their income to cover the cost of child care for an infant and 13% for a toddler. This makes high-quality child care inaccessible for many working families—not to mention the financial stress can have negative implications for both the physical and mental health of working parents.
But the financial burden isn’t only on employees. During a typical year, employers lose about $13 billion in potential earnings, productivity, and revenue due to inadequate child care resources. Offering child care benefits can reduce the financial strain on both employees and companies. Your organization can even qualify for tax breaks if you provide child care services for your workforce.
3. Give women more opportunities for advancement
Despite improvements in past years, women still carry the bulk of the burden when it comes to child care. This disparity has become even more pronounced during COVID-19. Experts are referring to 2020 as the first “female recession,” given that more than one in three women are considering downshifting their careers or leaving the workforce completely—with a majority citing child care responsibilities as the primary reason. Experts believe that as many as tens of millions of women may never return to the labor force as a result of the pandemic.
This demonstrates the harmful impact that not offering child care benefits can have on your female employees. Without providing a supportive workplace in today’s extremely stressful world, companies are inadvertently putting pressure on mothers to take time off work and take care of their children. This serves as yet another blocker to building an equal workplace and erasing the gender pay gap. Companies are doing themselves a disservice as well. Research found that firms with more women in management tend to be more profitable, attract more talent, and have a better public image.
4. Strengthen the talent pool
Every HR leader is aware of the impact that a benefits package can have on an employee’s decision to join a company. Data points to the fact that family-friendly benefits, such as child care offerings, are becoming increasingly important to employees. That’s why nearly six in 10 employers say that family-friendly benefits have been important to their talent strategy—and that number is expected to grow to 77% in the next three years.
Not only does a strong benefits package have the power to attract top talent, but family-friendly benefits have also been shown to improve diversity and inclusion in workplaces. This, in turn, can improve the financial performance of an organization on measures such as profitable investments at the individual portfolio-company level and overall fund returns.
Child care benefits are more than just a “perk” for employees. They’re a powerful way to provide your working parents with financial, mental, and physical support—not to mention they’ll lead to better business outcomes and a stronger employer brand. Consider making child care the next benefit you offer your workforce.
At Maven, we’re focused on helping working parents take care of their families at home, so they can be engaged at work. If you’re interested in learning more about our Parenting & Pediatrics program, and how it can support your employees and their families, request a demo here.
Ready to get started with Maven?
See how Maven can support working families, retain talent, and reduce costs
Activate your Maven account today
Maven members have unlimited access to 24/7 care and 30+ types of providers. Check to see if you have access to Maven providers and resources today.Explore Maven