How Childcare Benefits and Support for Working Parents Could Change Your Talent Pipeline

The current pandemic hasn’t created a childcare crisis as much as it has revealed — and profoundly exacerbated — one that already existed.

“The pandemic really exposed what women have known all along — that safe, affordable childcare is critical to keeping women in the workforce,” says Addie Swartz, a coauthor of a Harvard Business Review article from earlier in the year entitled “Childcare Is a Business Issue.” Addie is also the CEO of reacHIRE, which provides cohort-based return-to-work programs and talent engagement platforms for professional women. 

“Working women for decades have known that school, childcare, summer camps, and after-school programs all get band-aided together to keep women in the workforce,” Addie says. “And with the loss of that infrastructure, which is what we’ve seen with the pandemic, the world kind of falls apart. And in the last 18 months, we saw these critical supports disintegrate, forcing many women to stop working entirely.”

Companies and the broader economy suffer without the contributions, insights, and talents of these overtaxed parents. Forward-looking organizations are now exploring ways to better support parents so they can retain and attract their talent and give them an opportunity to do focused and productive work. 

A survey of 500 U.S.-based companies conducted by Care.com at the end of 2020 and beginning of 2021 found that 66% of respondents were planning to offer their employees more flexibility and 63% intended to expand childcare benefits.

Let’s dig deeper into why childcare is, as HBR trumpeted, a business issue and what organizations can do to address it.

Women are suffering because of the competing demands of work and home. Businesses are too

It’s hard to get any work done at all — let alone your best work — if there’s a caterwauling toddler wandering down the hallway or through your crucial Zoom meeting.

Addie and her HBR coauthors (Alicia Sasser Modestino, Jamie Ladge, and Alisa Lincoln) found in a survey of 2,500 working parents in the United States that nearly 20% of respondents had to cut their hours or leave the workforce because of a lack of childcare. Almost 2 million U.S. women have left the workforce in the last year and a half, most to provide care for their children.

“I think that what Kamala Harris said, that we’re asking women to make an unfair choice, is really true,” Addie says. “Is it your career or your family? Are you going to pay the extra money to cover childcare to stay in the workplace? If childcare isn’t affordable enough or subsidized, are women working just to pay for childcare?”

Ahh, yes, what The Atlantic called The Working-to-Afford-Childcare Conundrum.

Of course, it’s not just women who are suffering. Businesses are hurting too. For example, one study estimated that if the United States could get women participating in the workforce at the same rate as men it would raise the gross domestic product (GDP) by 5%. And for much of 2021, companies across industries and countries have struggled to find qualified applicants for their urgent hiring needs.

Organizations can attract and retain talent with strong support for working parents

Women left the workforce in droves because there was no longer a reasonable, affordable way to balance work and childcare, so it seems unreasonable to expect them to come back without that. While the opening of classrooms and campuses in many parts of the world will provide a start, it will hardly be enough to pull back everyone, particularly those with younger children.

Organizations should be scrambling to invest in innovative ways to support working parents. Those who are able to do that will have a marked edge in attracting and retaining talent. 

“Candidates today consider benefits like paid parental leave, backup childcare, and flexible work arrangements when comparing job offers,” Allison Whalen, the CEO of Parentaly, told Employee Benefits News. “I have heard so many stories of parents citing these benefits as the deciding factor when making a recruitment decision, both because they want these benefits and because they view these benefits as a signal of the company culture.”

Enhanced benefits are also seen as a critical tool for retention. Some 56% of the respondents in the Care.com survey said childcare or eldercare obligations had been a “strong factor” in attrition at their companies. “Those most worried about attrition, and specifically about the loss of female talent,” Care.com reported, “see expanded childcare benefits as the key to combating it.” 

Strong childcare benefits will also allow parents to stay focused and productive at work rather than spinning their wheels about whether their young children are happy and engaged. 

Childcare support can come in all sorts of packages

Onsite daycare centers, whether fully or partially subsidized, have been the gold standard for work-supported childcare. But the pandemic has changed the way companies are thinking about delivering support to their working parents. The Care.com survey found that companies are expressing less interest in onsite childcare options and more in flexible childcare options.

Here are some of the other ways companies can support their working parents: 

• Backup childcare. Typically, a company will partner with a provider such as Bright Horizons or KinderCare to offer coverage, either in a center or in home, for employees who are left without their childcare service because, say, their nanny caught the flu or storms closed their daycare center. This benefit is so helpful that a year before COVID-19 arrived, a group of 1,800 working moms at Amazon, dubbed Momazonians, began pressuring management to provide a backup childcare benefit. (More than a year later, in the midst of the early pandemic, the company extended a backup benefit on a temporary basis.) In 2020, KPMG quadrupled the number of backup care days they provided employees to 60. 

• Cash subsidies for care. UnitedHealth Group, from March to December of 2020, reimbursed employees $100 a day for childcare. These kinds of subsidies potentially have a two-fold benefit. Clearly, they help employees with out-of-pocket expenses. But, as Addie notes, they are helping others too. “Many working parents rely on relatives, parents, and grandparents to provide childcare,” she says. “It’s all ad hoc, right? Imagine the scenario where those family members could get some compensation for the childcare they’re providing.” 

• Online schooling. Agios,a Massachusetts-based pharmaceutical company, partnered with Outschool, an educational platform with more than 100,000 classes, to provide online educational opportunities for the children of employees, who receive $100 a month to pay for classes. Twitter blended Outschool classes into a program called Camp Twitter.

There are other ways, too, that companies can support parents and make childcare less fraught — tutoring services, one-on-one counseling, access to mental health care, and help finding quality childcare outside of work. But the No. 1 thing organizations can do is offer flexibility around when and where parents work. Companies are experimenting with flexible daily start and end times as well as split shifts and time-banking, where an employee works more hours one week and fewer the next.

Having an employee resource group for parents, where they can share information and tactics and support, is also super-helpful. (LinkedIn, for example, has the Families at LinkedIn ERG for parents and caregivers.)

Sabbaticals and other forms of parental leave can give employees the opportunity to address childcare needs without surrendering their jobs. For example, PwC has offered employees a one- to six-month leave during which they have full access to benefits and receive 20% of their regular pay.

And, of course, onsite daycare is still an option. Patagonia, the outdoor clothing retailer, has long trumpeted its  Great Pacific Child Development Center, an onsite childcare facility with a garden, playground, climbing walls, and room for 100 children. Patagonia believes that it recoups more than 70% of its childcare expenses through tax breaks, avoided turnover costs, and increased productivity and work quality. Other companies have calculated an even higher return. 

Addie points out that many companies, having let some of their workforce continue to be remote, suddenly have lots of freed-up office space. “Imagine,” she says, “taking some of that space and retrofitting it, adding some play spaces and a few roving tutors.” Which is pretty much what Orion Industries did. They used an empty call center to create the Orion Learning Pod where employee children could attend remote school together. Parents, who received a reduced four-day workweek schedule, oversaw students on their fifth day. 

Final thoughts: Childcare is key to innovation, productivity, and profitability

The responsibility for helping working parents shouldn’t fall entirely on their organizations. “Companies must become political advocates for themselves and the women they hope to hire and attract,” says Care.com in “The Future of Benefits 2021,” before pointing to publicly funded childcare centers and tax credits (for companies rehiring women who left the workforce) as examples of where the government can partner with business on the issue.

The current suite of employee benefits was largely developed in the 1950s, says HBR, when “providing childcare was not on an employer’s benefits radar because women were already doing that (unpaid) work at home.” 

Isn’t it time for a refresh that better reflects the current reality of the workplace?

“Childcare is essential,” Addie says. “It’s essential to innovation, productivity, and profitability. It’s essential to building a diverse talent pipeline. It could have been seen as a luxury before, but it has to be seen as an essential part of the equation today.”

*Photo by Rashid Sadykov on Unsplash

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