Companies worldwide learned important lessons in 2020, from figuring out how to operate in a completely remote world to recognizing the importance of creating a psychologically safe workplace during these times of historic civil unrest.
But there’s one more lesson that companies need to take away from the last year: understanding how much our economy is dependent on the availability of childcare.
When the pandemic forced daycare centers, schools, and camps to shut down, we saw the negative impact on our working parents. It brought to light how much the childcare benefits companies choose to offer (or not offer) can profoundly impact both employees and employers alike.
For many parents working from home during the pandemic, the lines between work and home have blurred — they were suddenly tasked with playing the role of teacher, coach, babysitter, and entertainer for their children simultaneously, all while trying to remain productive at work. As a result:
- 57% of mothers and 32% of fathers of kids under 18 reported worsening mental health during the pandemic.
- 52% of employed parents with children younger than 12 in the household say it has been difficult to handle childcare responsibilities during the COVID-19 outbreak.
- Roughly 1 in 5 parents said that they had to change or reduce work hours due to shifts in school or childcare as a result of the COVID-19 crisis, while another 7% had to leave a job altogether.
Even as the world returns closer to normal, childcare will continue to be essential in the workplace — whether it’s in a remote, hybrid, or in-person setting. In this guide, we’ll explore the value that childcare benefits offer and explain why every HR leader should consider offering childcare benefits to their own organization.
Why childcare benefits matter in the workplace
Childcare benefits typically involve giving employees a budget or reimbursing an employee for services like babysitting, backup childcare, or on-site daycare centers. However, the definition has expanded over the last few years to accommodate a more flexible range of offerings — whether that’s providing educational resources for children, offering coaching services for parents, or guiding families toward smarter healthcare decisions. Regardless of the specific offering, there are many reasons why childcare benefits play such a critical role in the workplace.
Provide financial relief to working parents
Benefits are evolving, and offerings like comprehensive medical, dental, and vision coverage are only a piece of the puzzle. Working parents rely on their employers for childcare support, especially in mid to senior-level roles, for a variety of reasons.
U.S. employees receive little to no support on childcare
In most advanced economies, childcare is typically paid for by families, the government, and the private sector. That’s not the case in the United States, where 55% of working families with children under age five are paying for childcare. Despite this, only 4% of U.S. companies currently offer a subsidized child-care center or program for their employees.
The cost of childcare is out of reach for most families
Childcare services are expensive. According to the U.S. Department of Health and Human Services, childcare is considered affordable if it costs families no more than 7% of their income. The reality? A family making the state median income would have to spend 18% of their income to cover the cost of childcare for an infant and 13% to cover the cost of a toddler. This makes high-quality childcare inaccessible for many working families, especially when they don’t receive support from their employer.
Financial stress is harmful to working parents
The lack of financial support for childcare can negatively impact the health and wellbeing of working parents — such as causing sleep disorders and elevating blood pressure. The health problems that come from financial stress cost employers an estimated $250 billion per year in lost productivity and absenteeism.
As a result of the pandemic, more than one in three women are considering downshifting their careers or leaving the workforce altogether, with a majority citing childcare responsibilities as the primary reason.
Give women more opportunities for advancement
While childcare benefits are important for all working parents, they’re especially impactful for the women in your organization. Here’s why:
Women continue to carry the burden of childcare
Despite improvements in past years, women still carry the bulk of the burden of childcare, especially in underrepresented racial groups. Mothers are 28% more likely to experience burnout than fathers due to unequal demands of home and work. And underrepresented racial groups are even more likely to experience burnout: 33% of Black mothers are experiencing burnout, in comparison to 25% of white mothers.
COVID-19 triggered the first “female recession”
As a result of the pandemic, more than one in three women are considering downshifting their careers or leaving the workforce altogether, with a majority citing childcare responsibilities as the primary reason. By not providing the appropriate resources in today’s extremely stressful world, companies are inadvertently pushing working mothers out of their jobs.
Invest in your employees for better business outcomes
Offering childcare benefits isn’t only good for your working parents. This investment can also have a positive impact on business outcomes, such as the ones we highlight below:
Employees who feel supported are likely to stay
There’s a growing appetite for childcare support among employees, affecting whether or not they want to stay with an organization. In fact, the Journal of Management found companies that introduced childcare benefits had lower collective turnover rates for female employees in subsequent years.
Considering it can cost around 33% of an employee’s annual salary to hire a replacement if that employee leaves, retaining parents in the workplace can pay for itself. Compare this to the average amount paid annually for childcare benefits, which is around $1,600 per employee.
Childcare benefits directly impact the bottom line
There’s a direct link between childcare benefits and your bottom line. A report by Ready Nation and the Council for a Strong America found that employers lose about $13 billion in potential earnings, productivity, and revenue during a typical year due to inadequate childcare resources. On the other hand, companies that invest in employees and their families see 5.5 times more revenue growth thanks to greater innovation, higher talent retention, and increased productivity.
Diversity correlates to better performance
Family-friendly benefits have also been shown to improve diversity and inclusion in workplaces. You’re also more likely to attract diverse candidates who are looking for inclusive, equitable benefits, especially LGBTQIA+ families. 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.
How to support your working parents with childcare benefits
Now that you understand why childcare benefits are so important to introduce in the workplace, you may wonder about how to introduce them. This is a great question to think about, as the design, rollout, and implementation of your childcare benefits will play a huge role in their effectiveness. Here are a few of our recommendations:
Ask your working parents what they need
Don’t try to copy and paste what your competitors are doing when it comes to childcare benefits. Every working parent has different needs, so you want to make sure your offering aligns with your workforce. To identify the needs of your employees, we recommend the following:
- Start an open dialogue: Encourage your working parents to speak with their managers or HR teams about their needs. What are they struggling with? Do they feel supported by the company to do their best work? If not, what do they need? Training your company leaders to start an open dialogue with these types of questions can reveal meaningful insights.
- Distribute a benefits survey: Some employees may not feel comfortable having one-on-one conversations with their managers or HR teams, which is normal. In this case, it may be more productive to distribute an anonymous survey, which still allows you to collect valuable data.
- Identify your goals: When you feel like you’ve gathered enough information to paint a cohesive picture, identify goals for both the employees and the business. For instance, you may want to tie childcare benefits to your goals to increase employee well-being rates and improve talent retention metrics. Understanding what outcome you follow through on to address the needs of your employees.
Think beyond parental leave
While offering parental leave is a great start, it’s also essential to think about supporting your working parents beyond this phase. You want to invest in benefits that provide continuous care and holistic support for parents at every stage of the journey. Below are a few ideas for childcare benefits that are relevant for every age:
- Flexible schedules: This can include adjustable hours, compressed workweeks, and reduced schedules. The purpose of this offering is to give employees more control over their work schedules to accommodate their responsibilities as parents.
- Educational support: Virtual learning, in-home tutors, and remote learning setups are vital now when working parents have limited access to schools.
- Parent support groups: Offering working parents direct support is also an impactful benefit. Give your employees access to coaching, employee resource groups (ERGs), or online communities for parents.
- Monthly allowance. Providing employees with a flexible budget to use on any family-related expenses is also a great way to provide support at every stage of the journey.
Look at the Best Places To Work for inspiration
We recently conducted the largest-ever study of working parents with Great Place To Work, in which we learned that nearly 80% of the Best Places To Work report that supporting parents is a top benefits priority.
Given this, we encourage employers to look at these Best Places To Work for inspiration regarding childcare benefits. Our study found that these companies offer a wide range of family-focused benefits, from providing telemedicine for families to helping parents find high-quality childcare options.
Synchrony, one of the Best Workplaces in 2020, even created a virtual summer camp for their families to keep kids occupied while at home, while helping them learn and connect with their parents on sensitive topics such as the pandemic and racism.
Ensure your childcare benefits are equitable
To ensure your childcare benefits have the maximum impact, you want to make sure they’re equitable. In other words, you want to make sure all your working parents — regardless of their race, socioeconomic status, sexual orientation, or gender — can access the benefits you offer. If you’re unsure, ask yourself the following questions:
- Are our benefits accessible by all working parents, regardless of their location, salary, identity, or background?
- Do our benefits support parents across various points of the childcare journey?
- Are we inclusive of all types of families, including single parents and adoptive parents?
Where Maven can help
We recently expanded our offering to include Maven’s Parenting & Pediatrics product, which now allows us to support parents from the time they’re thinking about starting a family to the time their child is ten years old. One of the main components of our product is to provide comprehensive, holistic childcare support to our members.
“The high-quality of the providers and the quick turnaround is extremely important to working parents. I don’t think you can get that in any city.” Kate, Boston Scientific
To support your workforce, we've onboarded a variety of vetted providers to our platform, such as daycares, sitters, virtual care, pods, and tutoring, so that parents can choose what helps their unique situation the most.
Regardless of whether your company is planning to return to the office or stay remote, childcare benefits will play a key role in the lives of your working parents. As we've discussed throughout this guide, the accessibility of childcare benefits can make a huge difference to your employees and your business.
Maven is the largest care platform for women and families. Our virtual care model integrates solutions for coaching for parents and specialized pediatric care, improving behavioral and clinical outcomes for families, and retaining more parents in the workforce. To learn how Maven can help support your employees' childcare needs, request a demo.
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