July 1, 2024 The Power of Employer-Provided Child Care Benefits

Employers can win the war for talent, boost productivity and nurture parents’ well-being by adding child care to employee benefits package.

By John E. Dorer, CEO of eb3.work

More and more businesses today, competing fiercely in a shallow labor pool, are building creative benefits to attract and retain employees.

Packages that once included health insurance, retirement plans and vacation time are being enhanced with benefits like flexible scheduling, specialized training and career growth opportunities.

Child care support is increasingly becoming an option as well, and it’s taking on new urgency as parents struggle to balance their work responsibilities with care for their children amid a critical shortage of child care in the United States.

With the rising number of dual-income households and single parents in the workforce, the demand for reliable and affordable solutions has never been higher. This is particularly true among women, who are disproportionately affected by the challenges of balancing professional and family responsibilities.

The child care crisis is a significant barrier to parents who want or need to work as well as to employers who need them in the workforce. Parents who can’t find, afford or rely on child care may be distracted and otherwise unable to meet their responsibilities in the workplace. Studies show, for example, that about 70% of working parents’ workdays are impacted when child care falls through.

Sometimes, parents leave the workforce altogether. Fifty-eight percent of parents who leave their job cite inability to find child care as a reason. That’s a loss for those families and it’s a loss for employers, who experience $13 billion in productivity losses every year in the U.S. due to inadequate child care.

An investment in people and productivity

Forward-thinking companies in various industries, including manufacturing, are recognizing that providing child care support for employees attracts and retains skilled workers and also enhances employee satisfaction, engagement and job performance. By offering on-site child care facilities, subsidized child care services, or flexible child care arrangements, employers can help alleviate the emotional and financial burdens associated with finding quality care.

The approach is proving to be a valuable business investment as well in a job market with a near 30-year low unemployment rate of 4%. The nonprofit Moms First and Boston Consulting Group presented a study this spring that documented the impact of employer-provided child care benefits by surveying CEOs and employees at five companies of various sizes and in various industries that are customizing such benefits for their workforce.

Company-paid stipends, on- or near-site care managed or sponsored by the employer, and access to backup care providers are among the companies’ strategies. For example, United Parcel Service piloted an emergency day care service, Etsy offers $4,000 for backup care and a $1,000 annual work-life stipend, and Steamboat Ski Resort in Colorado Springs started a child care center.

Company leaders and working parents found the results to be significantly positive.

Consider these findings from the study:

• Return on investment was positive for all the companies, ranging up to a remarkable 425%.
• Retaining as few as 1% of eligible employees can cover the cost of the benefits.
• Up to 86% of working parents are more likely to stay with their employer.
• Up to 78% report positive career impacts.
• Working parents avoid up to 16 absences each year.
• The benefits have generated improved company culture, morale and goodwill.

Addressing the cost of child care benefits

While long-term return on investment is positive, costs can be hefty in the short term. There are ways for employers to address those costs. Here are a few strategies:

• Partner with a third-party provider to offer off-site child care services. Third-party providers can negotiate lower rates with child care facilities, making it more affordable for companies to subsidize the cost for their employees.
• Utilize tax credits and deductions. The federal government offers several tax incentives to companies that offer child care benefits, including the Dependent Care Assistance Program and the Child and Dependent Care Tax Credit.
• Consider shared services. Pooling resources with other companies to offer child care services can particularly appeal to small and medium-size companies (in the same office park, for example) that need help building and maintaining on-site facilities.

Bottom line: Benefits can outweigh costs

The rising demand for reliable and affordable child care has made it a valuable addition to the modern employee benefits package. These employer-provided benefits can transform employee retention, performance and overall job satisfaction.

Organizations that prioritize their employees’ well-being by providing this family-friendly benefit are more likely to attract and retain top talent, especially women.

While the short-term cost of providing child care benefits can be significant, the long-term benefits of a happy and productive workforce can far outweigh the costs.

By embracing these strategies, companies can foster a supportive and inclusive workplace culture that values employees, drives productivity and ultimately fuels sustained growth.

John E. Dorer is an accomplished Global Mobility Executive with over 23 years of hands-on experience in the field. As the CEO of eb3.work, he leads an expert team of immigration attorneys and recruiters committed to solving the pervasive problem of entry-level labor shortages through employer-sponsored green card programs, particularly the EB-3 visa program.

Drawing upon an extensive background in global mobility, John has developed an unparalleled level of expertise in EB-3 staffing solutions. Under his leadership, eb3.work utilizes proprietary technology and streamlined processes to expedite the EB-3 application and approval procedures. The team delivers efficient, compliant results, making them a trusted partner for employers in a wide range of industries.

Passionate about solving labor shortage issues, John takes a dual-sided approach to his work. His primary mission is to partner with employers, assisting them in eliminating chronic entry-level labor shortages that hamper productivity and growth. Simultaneously, John is committed to creating meaningful employment opportunities for qualified foreign national workers, thereby contributing to the broader economic and social fabric of the country.

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