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The role of child care benefits in the workplace

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. This can include services like babysitting, back-up child care, or on-site daycare centers—to name a few examples. 

In most advanced economies, child care is typically paid for by some combination of families, the government, and the private sector. Unfortunately, that’s not the case in the United States, where employees rely heavily on their employers for support. Despite this, only 4% of companies currently offer a subsidized child-care center or program for their employees.

As a result, American parents end up shouldering more than 60% of the cost of child care. This, in turn, reduces employee productivity, results in revenue loss for companies, and disproportionately impacts the careers of women. COVID-19 has only exacerbated these issues and triggered our first female recession. 2 million women have left the workforce this year alone, bringing us back down to the number of women that were in the workforce in 1988.

You might be asking: if this is the case, then why aren’t our employees explicitly asking us for child care benefits? Unfortunately, many workers are afraid to speak up and express their needs. A survey found that 39% of parents worry that their employment will be terminated if they ask for child care benefits at work. This indicates an urgent need for a shift in your company culture. But until that happens, the responsibility for proactively introducing these benefits lies with HR teams and company leaders. 

The future of child care benefits

We’re optimistic that the way companies approach and define child care benefits will evolve over the next few years. With the needs of working parents becoming more pronounced, and with the pandemic stretching on for an undefined period of time, we can expect that child care benefits will become: 

1. More highly in demand 

Historically, offerings like health insurance and dental coverage were the focus of every benefits package. Today, those offerings are par for the course. Modern companies have to start thinking about the next level of support that employees need. Data points to the fact that family-friendly benefits, such as child care offerings, are becoming increasingly important to employees—especially during the ongoing pandemic. 

Research found that 57% of parents are overwhelmed by their current working situation. Despite this, a survey we recently conducted found that 60% of working parents do not feel supported by their employer as they navigate child care challenges. As the gap between what employees need and what employers provide broadens, the urgency around demanding child care benefits will only continue to increase. 

2. An increasingly vital part of every company’s talent strategy 

HR leaders across various industries and company sizes are noticing the shift in the landscape of working parents. Namely that these employees are placing increasing importance on benefits that can support them with their family-related needs. In fact, half of U.S. employees indicated that they would prefer enhanced benefits or paid leave over more pay or a higher bonus—with 40% of respondents specifically wanting family-related assistance and benefits.

HR teams are taking these preferences into account when it comes to their talent strategy. Not only is it necessary to keep up with the competitive pressure of recruiting top talent, but it’s also critical to retaining those employees. That’s why nearly six in 10 employers say that family-friendly benefits have been important to their talent strategy over the past three years—and this number is only expected to grow to 77% in the next three years.

3. Expanded to more flexible offerings

The “gold” standard of child care benefits has been providing on-site centers for children or reimbursement for daycares. With the pandemic forcing an increasing number of companies to go remote and making parents think twice about sending their kids to care facilities, it’s clear that these offerings are becoming obsolete.

In response, we anticipate that more companies will adjust their child care benefits to be more relevant to employees in this new world of work. Specifically, organizations will likely expand the types of services that qualify as child care benefits. This includes more flexible and virtual options, such as:  

  • In-home nannies and babysitters 
  • Mental health counseling for both children and parents
  • Apps that support child care needs 
  • Flexible hours or reduced work schedules for parents 
  • Paid leave for family members
  • Resources to support parents who are homeschooling

There has never been a more critical time to start thinking about child care benefits. Understanding the current state of child care benefits and where they’re headed can help your company stay one step ahead of the curve. If you’re interested in learning more about Maven’s Parenting & Pediatrics program, and how it can support your employees and their families, request a demo here.


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