Navigating Benefits

Offering Child Care Benefits to Employees: Is It Right for Your Business?

  • Offering child care benefits to employees can help businesses retain better talent and enjoy lower turnover costs

  • Companies that offer on-site child care programs typically recoup most of the initial investment

  • Employers can offer accommodations to parents (like flexible schedules) at little to no cost

Posted by April 12, 2019

Have you started losing some of your best employees, simply because they’re having children? Or, in the same vein, are you facing presenteeism with parents who do stick around? It’s already far too common for people to come to work sick or distracted—but when they have a child on their mind, it’s likely to happen even more.

However, this isn’t the 20th century anymore—stay-at-home parents are a relic of the past that most modern families can no longer afford. That’s why offering child care benefits to employees is something your organization should consider.

On average, it costs anywhere between $10,000 to $20,000 a year to raise a child. And roughly 16 percent of that overall cost goes toward child care alone. Offering employees access to in-house child care can improve retention and enhance your company’s reputation.

But this benefit may not be right for all companies, and as people are holding off on having kids longer—or altogether—it makes sense to wonder if offering child care benefits to employees is worthwhile. Here’s how to decide if these benefits are right for your business, and if there are other accommodations your workplace can make to allow employees to have a family and career, too.

The Business Case for Offering In-House Child Care

While, yes, there may be a large initial cost to launching in-house child care, the return on that investment could be substantial.

According to Fast Company, after Patagonia launched its on-site child care program, it saw 100 percent of mothers return after maternity leave. The company’s CEO, Rose Marcario, noted that’s a huge feat, considering roughly 25 to 35 percent of American mothers don’t return to work after pregnancy.

“For the past five years, our turnover rate for parents who have children in the program has run 25 percent less than for our general employee population,” Marcario said. “In sum, we estimate that we recover 91 percent of our calculable (child care program) costs annually.”

The company gets so much of its investment back because of three key things: The program boasts employee retention and engagement, and comes with generous tax breaks. According to Fast Company, Patagonia gets roughly $150,000 back for having an on-site child care center.

Such a program may not be right for a small business, but there are worthy alternatives you can consider.

Family-Centric Accommodations Employers Can Make

Employees with children are able to put $5,000 of their yearly wages toward child care assistance tax-free. Parents at your office may not be aware of this, so make sure your HR staff is researching and informing employees about any incentives that could make their lives easier.

In addition, your office can assist colleagues with families in these three ways:

1. Offer Gradual Returns After Leaves of Absence

Having a child can be stressful for your employees in a multitude of ways—their budgets, sleep schedule and lives typically change dramatically. So it’s important to be considerate of these workers as they get back on their feet.

Instead of having them dive right in, consider having them come in for two or three days to start. Or, offer them the chance to work remotely so they can get back in the rhythm of working without stressing about child care costs. By offering a ramp-up period, they’ll be able to make their full-time return feeling prepared and rejuvenated.

2. Allow Flexible Working Hours

Flexible hours allow employees to shift between working full- and part-time hours at different points throughout the year.

This approach will accommodate parents who need to work less when school is in session, so they can run off to practices, recitals, etc. Give them the flexibility to make up the time with weekend hours or longer summer days. This way, their paycheck stays the same, your office can still function and they’ll be able to balance work and parenting a little easier.

3. Allow Children in the Workplace

Every so often, a baby sitter will cancel or a school will close for the day, subsequently putting your employees into a state of panic. Allowing them to stay home and work remotely (or bring their children to the office) in these dire situations is a simple gesture that that goes a long way. It allows your team to stay productive and gives your workplace parents some relief.

The top companies today are the ones that allow employees to have it all—the house, the car and the family of their dreams. By offering child care benefits to employees, your organization could have the chance to stand out in all the right ways and attract top talent, too.

Looking for more ways to improve your workplace culture? Check out the various employer resources offered on United Concordia Dental’s main website today.

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