Why Are Childcare Benefits Necessary?

Childcare is essential. If enough working families can’t access it, they cannot work and the talent pool shrinks for employers. Employee childcare benefits are absolutely necessary because there is an ongoing childcare crisis in America, with millions of parents unable to access affordable childcare for their families.

This stark reality is the childcare crisis affects not only each individual family, but also the businesses that employ them and our society as a whole.

There are multiple motivations for employers to offer childcare benefits to employees. This might be to address the childcare struggles of your workforce, solve personnel and retention issues at the organization, or foster a more inclusive workplace and culture for employees.

No matter the reason, interest is at an all-time high, as 42% of employers plan to grow existing benefit programs to include childcare — or add new childcare benefits for their teams going forward.

Working parents struggle to secure childcare, which impacts their employers in absenteeism and productivity — this is why childcare benefits are needed.

Why employee childcare benefits are necessary

Unfortunately, our childcare crisis is not going away any time soon. Progress has been made, yet much work remains to improve childcare access for working parents across the country. Childcare benefits for employees are sorely needed because:

  • Childcare is unaffordable for most working families.
  • Employers face absenteeism and retention challenges.
  • Working parents cannot be as productive without proper childcare in place.
  • Childcare assistance allows women to return to the workforce.
  • The status quo is failing both employees and employers.

Without a robust employer-sponsored childcare benefits program, working families must figure out how to find quality childcare they can afford and that fits their schedule. If a reliable childcare solution cannot be found, it may be necessary for parents and guardians to leave their job in order to care for their kids.

At the same time, when you’re not offering childcare benefits for employees, you are managing a workforce that is not as productive, more absent, less satisfied, and has a wandering eye for a company with better care benefits. It’s hard to grapple with, but employers are actually losing money in the long run by sticking with the status quo.

The childcare puzzle is not an easy one to solve, to be sure. However, implementing a comprehensive employee childcare benefits program helps working families alleviate their serious pain points and gives employers a leg up on their competition in the process.

Working parents struggle to secure childcare

Some employers are well aware of the challenges many working parents face daily, yet it bears repeating and cannot be overstated: Things are rough out there.

Three main concerns facing parents are:

  1. Finding quality childcare options within their budget.
  2. Families are routinely expected to spend up to 20% of their income on childcare — this is unsustainable.
  3. Accessing convenient, flexible childcare with hours that fit their family’s schedule.

So what exactly do parents struggle with in terms of childcare? Obtaining high-quality childcare within their budget, for starters. While making the numbers work and justifying the high expense has always been challenging for parents, the situation has only gotten worse over the last couple of years, with childcare costs rising 41% during the pandemic. Families are burdened with spending up to 20% of their income on childcare — and it’s simply untenable.

Once a suitable childcare remedy is found, it is often not convenient for families. Traditional childcare centers are frequently too far away from home or workplaces, causing parents to lose precious time with their families commuting to and from the childcare location.

To make matters worse, many childcare options don’t offer the flexibility that working parents really need. They usually close for the day around 5 p.m., when the majority of parents are still at work or getting close to wrapping up their workday. This is bad enough for parents working roughly 9 - 5, yet for employees who need after-hours, weekend, overnight, and last-minute/backup childcare, being limited to conventional working hours can complicate things even further.

Childcare as a practical benefit for employees

Employer-sponsored childcare benefits are not only vital for employees, but they’ve become an important focus for organizations as well.

Here are three ways businesses can provide constructive support to working parents in the form of employee childcare benefits:

  1. Childcare assistance: This program helps families locate and access affordable, high-quality childcare in their own local neighborhoods.
  2. Backup care: Supporting working families when they absolutely need it most, backup care provides childcare during an emergency or at times when their usual childcare plans change unexpectedly.
  3. Childcare stipends: Also called a childcare subsidy, this is a specified amount of money to help employees pay for childcare costs.

Consider a remote worker at a mid-to-large size organization who can’t find affordable childcare for their family. They have a patchwork solution to get through the week, taking it day-by-day, hour-by-hour. Unfortunately for the employer, this employee is going to be more stressed and less productive than their peers. An employer-sponsored childcare benefits program can support this worker and help solve their childcare dilemma, allowing them to focus at work and be more productive.

We also know that when employees are happy and content with comprehensive benefits plans, they stay with organizations longer, which results in higher retention rates. Working parents are wary of leaving a job if it means changing a childcare environment that their family is happy with. Clearly, employee childcare benefits are a win-win for both parties.

Businesses benefit by providing childcare benefits

For employers, offering childcare benefits to employees makes a ton of sense. Why? Because it often leads to:

  • Increased job satisfaction
  • A boost in morale and productivity
  • Reduced absenteeism

Organizations can retain talent and recruit more competitively, which is important for every employer. In a tight labor market still processing the ramifications of the Great Resignation, any retention and hiring advantages are magnified and should not be taken lightly.

Supporting working parents with an employee childcare benefits program also helps cultivate a more inclusive workplace. This is particularly true for women, many of whom have had to contemplate leaving their jobs due to childcare challenges or not being able to return to work like their male counterparts.

Working parents struggle to secure childcare, which impacts their employers in absenteeism and productivity — this is why childcare benefits are needed.

Why is childcare important to the economy?

The reality is that childcare is not only crucial for families and their employers, but the entire economy in general. Childcare is a major economic factor because:

  • Without reliable childcare, parents cannot work consistently, earn a living to support their families, and contribute to the consumer economy.
  • The economy loses over $50 billion dollars a year in wages, revenue, and productivity because of chronic childcare issues.
  • Without childcare in place, more women are unable to return to the workforce.

The potential for childcare investments to impact the overall economy is astounding. According to the former chief economist for the U.S. Department of Labor, Heidi Shierholz, if we could lift the U.S. maternal employment rate to be equal with that of Germany’s or Canada’s, it would raise America’s GDP by 3.5%, producing more than $500 billion a year.

The economic research indicates there is a remarkable return on investment for early childcare and education. For every $1 spent, returns range from $4 - $13 in employment, educational achievement, and health outcomes. It is clear that implementing an employee childcare benefits program not only benefits working families and employers, but also the broader economy as a whole.

With so many good reasons to add childcare benefits, it’s no wonder that more and more employers are leaning towards supporting their teams in this way.

Why choose Upwards for your employee childcare benefits?

Upwards is having these conversations every day with organizations in all industries, helping find the right childcare benefit solutions to positively impact both employees and employers.

Upwards, the largest network of childcare providers in the U.S., is a market leader in employee childcare benefits. Our childcare network is made up of over 6,000 licensed home daycare providers, along with an additional 50,000+ nannies and babysitters.

These qualified, vetted caregivers offer the affordable, high-quality childcare that is needed by working families. Small class sizes, more flexible schedules, and the capability to care for school-aged children are just a few of the features of our network.

Upwards has developed multiple employee childcare benefits programs for employers in every industry. Options can be customized to fit your workforce and include childcare assistance, backup care, as well as full and partial stipends.

You can give your working parents the lifeline they need to find that essential childcare that will also benefit your organization in the long run.

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Childcare AssistanceBackup CareChildcare Stipends
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The largest childcare network in the United States, providing access to quality, affordable childcare to families nationwide. We support childcare providers in operating sustainable businesses through a technology-based marketplace and partner with government entities to improve access to care. Upwards also helps employers of all sizes offer their employees childcare benefits. Our mission is to help all families care for their children — not just those who can afford it.

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