The childcare conundrum is getting worse for working parents. Last year, the country broke its record with over 104,000 childcare-related absences in October alone, far beyond pre-pandemic levels. As of this past April, cases were still near double what they were compared to 2019.
For employers, the impact of childcare shortages stretches all the way to the bottom line. It is estimated that U.S. employers are losing $23 billion a year due to childcare-related absences — but some are taking measures into their own hands to avoid the costs and challenges.
Lakeshore Learning Materials isn’t a major company. The business has only 2,000 employees, but company president Kevin Carnes says its award-winning outdoor childcare center has served more than 2,400 children since its inception. “It’s an integral part of our company; it’s probably one of the things I’m the most proud of and it’s a huge employee benefit.”
Now, more businesses — including Patagonia, Home Depot, and Intel — are recognizing that offering childcare benefits is not only a perk to attract top talent, but a vital responsibility for any employer hoping to establish a whole-person workplace.
We All Pay the Price of Childcare Shortcomings
Previously, the Center for American Progress (CAP) found that more than half of U.S. residents live in a childcare desert — a community where there are as many as three daycare-aged children for every licensed childcare slot available. These deserts are spread almost equally across urban and rural areas. Fast-forward to the present day and the deserts are growing, not shrinking.
The nation has 58,000 fewer daycare workers compared to 2020 and recent numbers from ReadyNation show that the lack of childcare is costing the economy over $122 billion annually. Still, families are taking the brunt of the loss.
Working parents are foregoing a cumulative $78 billion in annual wages due to childcare struggles. On top of that, they are earmarking large portions of their income for childcare costs — which is why affordability is their top concern.
A recent analysis of U.S. Census Bureau spending data showed that families are paying an average of 17.8% of their income toward childcare expenses. Yet even with that money being spent, parents cite the quality and reliability of childcare services as their next two primary concerns.
The reliability issue is particularly impactful as HBR found in a national survey that only 30% of working parents have any form of backup childcare available, helping to explain the high number of childcare-related absences. Roughly 20% of working parents had to reduce their hours or quit working completely, solely due to a lack of childcare in their area.
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Stunted Career Growth is Holding Back Parents
Over half of all working parents with young children say they have missed entire work days due to lack of childcare availability. Even more say they have had to come in late or leave early. However, simply securing childcare isn’t enough to take the worry off the minds of busy moms and dads.
Questions of quality, safety, and tomorrow’s options loom, causing 85% of primary caregivers to say that childcare-related challenges have harmed their ability to focus and perform at work. HBR’s survey found that income was not the top factor when determining who would quit or reduce their hours to make up for childcare shortfalls. Nearly one-third of respondents said it depends on “who’s better at it” and moms are seven times more likely to claim that role.
“Childcare is infrastructure. If we want women in the workplace contributing to our economy and to their households then we need to think about childcare in the same way that we think about paving roads — it is the essential ingredient to bringing women into our workplace and keeping them there,” says mother, advocate, and policymaker Giselle Hale.
Of course, childcare is not strictly a women’s issue. HBR found that nearly half the time, the decision of who would take care of the kids came down to who had the most flexible work schedule. The Bipartisan Policy Center also found that only 29% of Black parents have a fixed work schedule and 38% are more likely to need childcare services outside of traditional work hours.
Combine all these factors and it is obvious why McKinsey found that parents ranked aspects like flexible working arrangements or predictable hours as their top priorities when choosing a job. McKinsey’s research reveals that both working mothers and working fathers across ethnicities feel that childcare challenges are holding them back professionally. Astonishingly, 40% of respondents recently refrained from pursuing a promotion because on-site childcare was unavailable.
Companies Are Offering Creative Kid-Friendly Benefits
In Care.com’s 2022 report, 63% of HR leaders believe that increasing child and senior care benefits can help them attract and retain talent. Even more agreed that offering childcare benefits would help boost employee productivity.
Over half of all employers now offer some form of childcare benefits, and many qualify for tax credits as a result of doing so. However, the bottom-line business impact shows in countless ways for companies that implement childcare programs. For instance, the Journal of Managerial Psychology found that on-site services can lower absenteeism and increase employee performance.
Patagonia proved the statistics when they made on-site childcare services available to all workers at their headquarters and their Reno distribution center with a sliding scale tuition to ensure affordability. Since then, they have seen a 25% lower turnover rate amongst employees who utilize the program.
Intel, Home Depot, and Citi, along with businesses big and small are also investing in on-site care, leading to longer tenures, lower turnover rates, and happier employees, but childcare programs don’t have to be expensive or complex to operate.
Supporting working parents can also be as simple as helping to coordinate resources and services for them. Alternatively, tuition subsidies or more creative forms of financing, like flexible-spending accounts, can broaden benefits programs to fit a wider spectrum of employees, addressing childcare challenges without creating a dedicated childcare benefits program.
Flexible work arrangements can help parents start and end their workdays around the childcare that is available to them from elsewhere. Synchrony has adopted this model, allowing team members to coordinate with each other through a centralized system where they take vacation time and personal time off in hourly increments.
Finding The Balance for a Diverse Workforce
Companies that support working parents are able to uphold a more diverse, capable, and productive workforce, but coming up with creative solutions is key to cultivating a whole-person workplace that fits the needs of everyone involved.
Adaptable benefits programs can help simplify while creating perks that are highly advantageous and attractive to the workforce at large. By giving employees the option to choose the incentives that work best for them, whether paid parental leave or paid volunteer hours, employers can help them with the challenges they are facing as parents and beyond. Establishing a thoughtful benefits program is a strategic move to create a more attractive workplace for talented workers.