Are Childcare Benefit Programs Expensive?

What is child care really worth? The answer for many is that it’s priceless.

Employers considering expanding existing care benefits need to gather as much information as possible to make significant decisions that affect their financial outlook as well as the actual people that make up the organization.

We’re going to tackle an overarching question that our Upwards team gets asked all the time: Are employee child care benefit programs expensive?

The answer is somewhat complicated. The difficult truth is that most child care benefit programs are expensive and ineffective. However, they don’t have to be this way! If you choose the right program to implement, you’ll find significant ROI as you support working families and address organizational challenges like employee productivity, absenteeism, retention, and hiring.

Reserve some time to speak with our Upwards team about employer-sponsored child care benefits.

As they review the options available, employers typically have a few questions about employee child care benefit programs to determine the best fit for their workforce. The top three questions are:

1. Are employee child care benefits attainable? Traditionally, employee child care benefits can be quite expensive and, therefore, unattainable for many employers. Fortunately, there are now more affordable employer-sponsored child care benefits available. These economical child care benefit programs are within reach of organizations from every industry across the country.
2. What types of employee child care benefit programs are available? Employer child care benefits include child care assistance programs to help working parents find and access quality, affordable child care for their families. Child care stipends are an option employers can offer to assist employees with child care costs. And backup care programs are an important way to support working families with a care plan when there is an emergency or last-minute child care is needed.
3. Which type of child care providers can employees choose? Depending on the child care network and employee child care benefits program selected, working families can find caregivers ranging from daycare providers and nannies to babysitters and tutors. Some child care networks include home daycare providers, who are licensed to provide child care from their home and offer smaller class sizes with more flexible schedules. Home daycare providers, nannies, and babysitters can provide after-school care as well.

Flexible child care benefits for employees

If you’re interested in getting the most for your money and providing the best value to your workforce, find a flexible child care-as-a-benefit program. This is important so that both you and your employees pay only for the child care that is needed and ultimately used.

• Child care-as-a-benefit is a term used to describe when employers offer care benefits to employees that include childc are. Similar to health, dental, and 401k benefits, a child care-as-a-benefit program provides employees with the choice to opt-in to take advantage of the specific benefits the employer is offering to their workforce.

In addition to selecting the right, flexible program, make sure to take advantage of substantial tax credits available to employers offering child care benefits to their employees. We discussed tax credits in a previous post, and it’s worth reiterating that businesses can receive up to $600,000 in federal tax credits.

Our team at Upwards can help you understand which tax credits you would be eligible for to see how much money you could save by implementing a child care-as-a-benefit program.

Finding affordable child care

As you survey the wide array of options for a benefit to support your working families with child care, make sure to choose one that actually services those families. After all, that’s the whole point, right?

The reality is that most forms of child care are already unaffordable for many families. This is why the employee child care benefits program you’re providing is so crucial.

Unfortunately, even with the best intentions and right idea, many employers are opting for the wrong programs. An example of this is a program in which the child care costs run in the thousands of dollars per month range for employees. In a case like this, you would be basically paying money to give your working parents access to a program they still can’t afford.

To successfully avoid this scenario, you’ll need to find an affordable child care network that includes flexible care options. This will allow you to pass those savings down to your employees, who only pay for the child care they need and actually use.

At Upwards, our business model is geared toward enabling employers to afford flexible, high-quality child care programs that their employees find useful, accessible, and truly affordable for their family budgets.

• We own both sides of the child care marketplace, with years of extensive knowledge and data about both the parent and provider experience.
• We have dedicated care managers to assist working families with their unique child care needs.
• We’re a tech-forward company focused on home daycares, babysitters, and nannies rather than large, on-site daycare centers.
• Because of these factors, Upwards is more affordable than our main competitors.
• Backup care credits cost $300 - $400 each with our competitors, while Upwards’ backup care credits cost significantly less and represent a much more cost-effective way to support your workforce with the important backup care they need.

How to select the right child care network

When thinking about your options for employee child care benefits, choosing a child care network for your organization is one of the biggest decisions you’ll make. Every child care network looks to offer comparable services, however, costs and coverage can differ significantly based on who you choose to work with.

An important step in the process is gaining a better understanding of the particular needs your working families have for child care. This information can be gleaned internally with an employee survey or from a third party employer child care benefits provider as part of their workforce analysis. However you gather it, this information will help inform the choice of which child care network is the right fit for your organization.

Want to learn about Upwards' Childcare Benefits?
Childcare Assistance	Backup Care	Childcare Stipends
Dedicated care manager to provide 24/7 concierge support	Emergency childcare when regular care falls through	Offset the cost of childcare-related expenses for employees
Learn More	Learn More	Learn More

Maximizing child care benefits ROI

As previously mentioned, implementing employer-sponsored child care benefits can bring you serious ROI. How much? With the right program, you could see a 400% return on your investment within the first year, full stop. And surprisingly, it can be as inexpensive as only a few dollars per employee per year.

• To find out just how much you can save by adding an employee child care benefits program, try using Upwards’ ROI Calculator for a custom ROI analysis. We developed our ROI calculator with employers in mind to help provide data for these important organizational decisions.

Upwards’ affordable child care benefits for employees

Upwards, as the largest child care network in the U.S. and a leading provider of employee child care benefit programs, can help you support your working parents while improving your bottom line. Our child care network of over 6,000 licensed in-home daycare providers and 50,000+ nannies and babysitters delivers affordable, high-quality child care that works for both employees and employers.

We have many employers using Upwards that are saving hundreds of thousands of dollars a year, thanks to their employee child care benefits program. Suppose you’re interested in starting to compound value at your organization for your deserving workforce. In that case, we’re always here when you’re ready to explore your child care benefit options so we can help you find the right fit.

We are available at benefits@upwards.com to chat about your team’s child care needs and you can also find more information about Upwards’ child care benefit programs at upwards.com/childcare-benefits.