Why Employers Are Paying More Attention to the US Child Care Crisis

Why Employers Are Paying More Attention to the US Child Care Crisis

The high cost and limited availability of child care is one of the major burdens facing working families today, particularly in the US, but also in the UK and other countries: Parents are spending a sizable chunk of their incomes on child care, making career decisions based on these costs, and sacrificing earnings by pursuing flexible schedules or part-time work in order to make more time to spend with their children.

Unable to afford full-time child care, many mothers (and it’s almost always mothers) are forced to work part-time or drop out of the workforce entirely to take care of their children, especially when they have more than one. Because responsibility for child care still falls predominantly on women, this factor contributes heavily to the gender pay gap.

In the US, a historically tight labor market is driving employers to reckon with this problem, now that they are feeling it more acutely than ever, Jennifer Levitz reports at the Wall Street Journal. Levitz hears from employers around the country that are increasingly concerned about retaining female employees amid a dearth of child care options and have begun to look for ways to expand these options for their employees, including lobbying state governments for legislative solutions. Some coworking spaces have also experimented with child care programs as a benefit for their members.

The gold standard of child care benefits are on-site facilities, such as Patagonia famously offers at its Ventura, California headquarters and its Reno, Nevada distribution center. While these services are expensive to implement, Patagonia maintains that this investment nearly pays for itself between tax incentives, better retention, and lower turnover. From an employee perspective, on-site daycare is the family benefit most preferred by employees all over the globe, according to our research at CEB, now Gartner. This is particularly true in the US, where employees are twice as likely as in other markets to say they would prefer on-site daycare over a 5 percent increase in pay.

Nonetheless, on-site child care remains rare, as child care centers are subject to strict and variable regulation, require sizable space and labor costs, and are complicated to manage. Yet organizations clearly have something to gain from making child care more accessible to their employees.

If on-site care isn’t an option, there are other things employers can do, Brigid Schulte, director of the Better Life Lab at New America, argues at Slate:

• Invest in existing quality child development centers or in-home child care. As more workers work flexible hours or telecommute, companies such as Intel invest in a network of child care providers that might be nearer employees’ homes and offer training, mentoring, and support to providers in exchange for giving Intel employees priority admission and emergency backup slots.

• Subsidize employee child care costs, offer tuition scholarships, and provide vouchers and reimbursements. Microsoft offers employees discounts at many child care development centers or subsidizes child care and backup care with national providers. Bright Horizons and KinderCare are two of the largest employer-sponsored child care providers in the country.

• Consider pooling resources with other organizations to form consortia to build or support child development centers or family care homes. That’s what a group of companies, including Georgia Pacific, the Federal Reserve, a local department store, and a newspaper did in Atlanta.

In our research, we’ve been monitoring the effectiveness of different child care programs in the US, such as Oklahoma’s free pre-k system, and have found that these programs can have strong positive effects for both children and the community. CEB Total Rewards Leadership Council and Diversity & Inclusion Leadership Council members can learn more in our report on driving engagement through parental leave.