Top 10 Childcare Benefits Myths That HR & Benefit Managers Should Know

Myths are widely held but false ideas or beliefs. Some myths can be fun and harmless, serving as a distraction from the pressures of everyday life.

Other myths are more complicated, precariously muddling what should be a fairly clear picture of the way things actually stand. And some myths are just more persistent than others.

As HR and Benefit Managers survey the hiring landscape in 2022 and beyond, certain themes may keep cropping up, with childcare being one of the more prominent ideas employers are contemplating. 2022 is expected to continue the trendlines seen in 2021, with a surge in interest from organizations adding childcare benefits for their workforces.

Contact Upwards with any employee childcare benefits questions.

Let’s take stock of the top myths about childcare benefits that HR and benefit teams can dispel as employers make complex benefit decisions this year.

1. “Remote workers don’t really need childcare benefits.”

It’s been 2 years since millions of Americans started working from home. For many parents, especially and disproportionately mothers, the dual challenge of managing their full-time job responsibilities with daily childcare duties has proved unsustainable.

Despite this reality, the notion that remote work enables parents to simultaneously care for their children somehow still persists. The demands of childcare do not magically disappear if your employees are logging in to their laptops at home rather than the office.

The truth is that remote employees need childcare benefits just as much as their in-person counterparts. Parents working from home may not have their childcare situations fully figured out and can have more pressing, hidden childcare needs that their employers are not readily aware of. Whether an employee is remote or on-site, if they don’t have reliable childcare it ends up costing employers, one way or another.

2. “Job seekers don’t care about childcare benefits.”

HR and Benefit Managers facing personnel challenges are always looking for an edge on the competition. Prior to the pandemic, incorporating a childcare benefit wasn’t as highly visible on employers’ radars in terms of moving the needle with recruiting new talent to join the team. That perception has changed radically in what is a very competitive labor market.

Organizations are trying different incentives to tackle these hiring issues. Companies are testing out everything from faster job offers and more flexible PTO policies to raising wages and offering one-time signing bonuses. The latter represent efforts to throw money at the problem, while some employers are ultimately realizing that offering a childcare benefit addresses recruitment, among other HR obstacles. The best part is that adding childcare benefits for employees is a clear win-win for working families and the places that employ them.

3. “Only a fraction of our employees have young children, so childcare benefits are not necessary.”

While the individual number varies by employer, there are generally a lot of parents to consider when factoring what type of benefits to offer. In fact, parents represent 40% of the workforce.

Even if your organization has a smaller percentage of working parents, employer-sponsored childcare benefits are still needed. These care benefits are necessary to support current families, employees considering adoption and starting a family, as well as future hires who will join to support the team.

4. “We can’t afford childcare benefits because they’re too expensive.”

Myths can be stubborn, lingering in spite of the facts on the ground. This one certainly falls under that category.

Between lost work hours due to absenteeism (totaling billions of dollars each year in lost productivity), Upwards’ affordable programs at a fraction of the cost of our competitors, and tax credits available to businesses, it has become increasingly clear that it is now much more costly to opt against adding employee childcare benefits.

We know that it costs employers at least 20% of an employee’s annual salary to replace them when they leave. If a working parent making $50,000/year in annual wages leaves their job due to lack of childcare, it will cost the organization at least $10,000 to find and hire their replacement. A $200/month stipend for childcare expenses could go a long way in retaining this employee and only costs the employer less than $2,500 annually, compared to the $10,000 to replace them. That’s real savings and a 4x ROI for employers.

Upwards CEO Jessica Chang recently discussed these issues with Ned Schaut, President, Agency Leverage, on his Benefits Influencer Podcast. Schaut commented, “That is a powerful conversation for us to be having with groups and it’s meaningful, right, [childcare is] not just another benefit.”

5. “A childcare benefit program won’t fix our employee turnover and retention issues.’’

As HR and Benefit Managers know all too well, retaining talent and finding ways to reduce employee turnover are crucial prerequisites to running a successful operation. Fortunately for employers looking to address these issues, offering employee childcare benefits has been shown to alleviate these HR challenges. It also goes a long way to strengthen employee satisfaction and loyalty in the organization.

A lot of parents have children at important times in their careers, right when they’re starting to climb the ladder and bring great value to their employer. At the point in their careers when they’re often starting to think about raising a family, they typically have the most company and industry knowledge. If they leave for a preventable reason, like a lack of childcare, it hurts the business even more.

An employer-sponsored childcare benefits program:

• Helps employees return to work after parental leave.
• Incentivizes working parents to stay longer at the job because their kids are happy with the childcare through the employer’s benefit program.
• Encourage future parents to start families or join the team from outside the organization, bolstering the talent pool.

6. “Childcare benefits are a personal perk, not a professional necessity.”

If this outdated myth were true, issues such as absenteeism, retention, and recruitment would be things of the past. But with insufficient childcare costing employers $13 billion a year in lost productivity, the impact on businesses is real and substantial.

Rather than managing the downstream effects of childcare challenges on their workforce and the bottom line, employers would be wise to get ahead of the problem by offering affordable childcare benefits that deliver tangible results for everyone.

7. “In order to offer childcare benefits, we have to pay for the full cost of childcare for our employees.”

This couldn’t be further from the truth — some employers offer childcare stipends, which often cover a portion of childcare costs for their workforce. In these cases, employees still need to pay the rest of their own childcare costs. Some employers may opt to pay for all of the care, while others pay none of the costs and still others choose to subsidize backup care for emergency childcare needs.

Recognizing that every organization is different, Upwards has flexible childcare benefit programs to meet the custom needs of employers and their working families. Our concierge service helps families find the best childcare options, full subsidy/stipend packages offset care costs, and plans covering full-time and backup care are available for employers to combine for the best organizational fit.

8. “We already have an on-site daycare so our needs are fully covered.”

This may have had some validity at one point in time. Yet with childcare costs rising exponentially, parents’ schedules fluctuating unpredictably, and availability of childcare declining despite increased demand, working families need every option on the table to cobble together adequate care for their children.

Most employers don’t want to start and manage their own on-site daycare or take on the liability ramifications that entails. Even if an on-site childcare center is open, it doesn’t solve all of the challenges and in fact creates new ones for your employees, like:

• Limited number of spots - on-site childcare centers tend to fill up fast and develop waiting lists. If employees can’t bring their kids to the on-site center because it’s full, all of the same childcare challenges still remain and it doesn’t work for everyone. It could even be more frustrating for some parents, as childcare is so close to where they work and perceived to be at their fingertips, yet remains out of reach for their family.
• Remote workforce may not be near HQ - if employees are 100% remote or working a hybrid schedule, their home may not be close enough to the office where the on-site childcare center is located, negating its usefulness to them.
• Waitlist, if the center is full - waitlists are a big challenge for parents, including at on-site centers.
• School-age kids need after-school care - on-site childcare centers are typically aimed at infants, toddlers, and preschoolers, which creates an issue for families needing care for school-age children after school is out, during times when most parents are still working.
• Workers on different shifts require earlier/later childcare hours - most on-site centers maintain standard operating hours during the day, resulting in them not being a viable option for employees working earlier or later, non-standard shifts.
• No access to babysitters or nannies - many families are looking for the flexibility and convenience of a nanny or babysitter as their primary childcare solution. An on-site childcare center may be too large, impersonal, or crowded for parents who prefer an in-home option.
• Weekend care needs - on-site childcare centers are not designed to provide weekend care for working families, so they don’t address this challenging issue.
• Some parents aren’t comfortable with big facilities during COVID - whether an on-site childcare center appears pristine or not, some parents simply are no longer willing to place their children in that type of large facility setting. They prefer a much smaller, home-like environment for their family.

Whether a family is looking for an in-home daycare provider, center-based childcare, a nanny or babysitter, organizations can support their teams with robust and flexible childcare benefits that will help them balance work and family.

9. “Offering backup care as part of a childcare benefit program is an unnecessary luxury.”

Most working parents need to line up full- or part-time childcare and have a primary option for their kids. However, there are inevitably going to be unexpected situations, illnesses, and emergencies that arise to throw off those main plans for daily care. Backup care is actually a necessary component of childcare planning and a type of care parents are increasingly looking for in their benefit plans.

With 60% of moms wanting employers to provide backup care, it should not be considered a nice-to-have but rather an essential childcare benefit for working families.

10. “Our working families have school-aged kids so they’re all set.”

While a big focus of childcare concerns is understandably on the infant, toddler, and preschool stages in the 0 - 5 set, parents must also figure out care for their kids up to age 12. Children are generally out of school by around 3 pm, well before most parents are done with their workday. Summertime presents its own unique childcare challenges, with kids out of school for weeks on end.

There are multiple care options for families to consider, from family childcare to after-school care programs on-site at the child’s local school. Employers offering robust benefits can support their workforce with childcare assistance for school-age children in addition to the wee little kiddos.

One way to stay ahead of the curve is for employers to provide comprehensive childcare benefits for their teams. Employees are demanding childcare help from their organizations and it’s now easier and more affordable than ever to offer these much-needed benefits to support working families.

As you do your due diligence and hatch employee benefit plans, block off a few minutes with Upwards to learn more about employer-sponsored childcare benefits.