Onsite Child Care Ebbs as Flexible Benefits Flow

Employers adjusting family-friendly benefits to suit diverse workforce

By Joanne Sammer November 9, 2016
Onsite Child Care Ebbs as Flexible Benefits Flow

When employer-sponsored child care appeared on the scene to meet the needs of a rising number of working mothers, large corporations built child care centers on their grounds while cutting-edge midsize and smaller companies found ways to offer onsite day care.

The goal was to entice new mothers back into the workforce and ensure that they would be productive and engaged, knowing that their children were being cared for nearby.

But these onsite centers are becoming increasingly rare and, some say, are too rigid to meet the diverse needs of today's workforce. According to the Society for Human Resource Management's (SHRM's) 2016 Employee Benefits survey report, released in June, just 2 percent of employers offer subsidized child care centers, down significantly from 9 percent in 1996 and 4 percent in 2012.

"Today, employers focus on work/life balance by offering a broader array of benefits because they are trying to reach a broader audience," said Carol Sladek, a partner with Aon Hewitt in Lincolnshire, Ill.

San Jose, Calif.-based Cisco Systems has offered onsite child care for many years and, in fact, has increased the capacity of its day care centers in Bangalore, India, due to employee demand. However, its two San Jose child care centers generally operate at 60 percent to 80 percent of capacity. To increase usage, Cisco also offers back-up child care at the centers that can be used on an ad hoc basis, said Gabrielle Thompson, the company's vice president of HR acquisitions and total rewards.

The Value of Flexibility

This situation is not unusual. "While a child care center can be very important to those who use it, those employees tend to be a very small niche population," said Sladek. In other words, at-work child care is a good solution for only a relatively small part of the workforce—employees with preschool-age children who can thrive in a child care center environment as opposed to home-based care.

Traditional brick-and-mortar child care centers are expensive to operate, require a lot of staffers and represent a significant liability risk to the company should something happen to a child at the center. Above all, "onsite brick-and-mortar child care centers with a finite number of slots and fluctuating demand are not easy to adapt" to changing needs, said Sladek.

But with a growing number of single parents, dual-career couples sharing parenting responsibilities and employees having children later in life, family-friendly benefits must meet a broad range of worker needs. "Different generations in the workforce have very different ideas about how work should be structured, how it gets done, and how family and the rest of their lives should be integrated with that work," said Sladek.

Expanding Family Benefits

Meeting the needs of diverse employees requires offering benefits that can be used as employees see fit to manage their family and work responsibilities. For some employers, the answer is found in programs such as:

*Paid-time-off banks in which employees can save up available days off that they can use for any purpose, rather than having designated time off for vacation, sick leave, personal time, etc.

*Flexible scheduling that allows employees to adjust their work hours to accommodate child care needs.

*Paid-parental-leave programs, which are on the rise, with 26 percent of employers offering paid maternity leave beyond what's covered by short-term disability or state law and 21 percent offering paid paternity leave, according to SHRM's benefit survey report.

[SHRM members-only policies: Paid Parent Leave Policy]

Consider Cisco Systems' situation. The company's child care centers remain a "highly valued benefit that we have no plans to change," said Thompson. However, they have become just one element of a much broader package of flexible work/life family benefits. Cisco also offers ad hoc back-up care, as needed, for older relatives in employees' care, and specialized medical benefits for children—including care for autism, diabetes, mental health and behavioral issues.

Cisco reimburses adoption expenses up to $10,000 per child and will soon offer benefits for employees working with a surrogate to have a child.

"If you have a population with an average age in their 40s, you need to ask very different questions about what types of benefits to offer than if you have a population with an average age of 25," said Sladek.

Bear in mind, however, that when considering changes to family-oriented benefits, it's important not to make assumptions from demographics about what employees want. Better to ask workers what they need and would value, benefit managers advise.

Related SHRM Articles:

How to Inspire Employees After Parental Leave Ends, SHRM Online Employee Relations,November 2016

Facebook, Coca-Cola, Braun Medical Offer Paid Parental Leave Tips, SHRM Online Benefits, October 2016

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