Onsite Child Care: Working Parents Want More of It

​Federal data shows that employee absences and job turnover decline when businesses provide child care.

Yet onsite child care was the least frequently offered family-friendly perk in an assessment of 1,700 companies, according to a new report by business network The Best Place for Working Parents in Fort Worth, Tex., and Southern Methodist University's Center on Research and Evaluation.

"Sufficiently subsidized and high-quality onsite company child care tends to have the greatest perceived value to employees and one of the highest returns to the company," said Sadie Funk, national director of The Best Place for Working Parents.

The report also found that:

• Larger companies offer a wider range of family-friendly benefits, whereas smaller companies are focused on a few benefits that have a very high impact, such as onsite child care and backup child care.
• The construction industry leads the way when it comes to providing maternity leave, child care assistance and backup child care policies.
• The health care industry offers more onsite child care policies than other industries.

Inadequate child care is costing working parents $37 billion a year in lost income and employers $13 billion a year in lost productivity. A 2021 survey of 2,500 working parents found that nearly 20 percent of them had to leave work or reduce their work hours solely due to a lack of child care.

About 78 percent of 825 unemployed individuals who sought employment said they needed full-time child care five days a week to return to work, according to a 2021 report by The Best Places for Working Parents.

Funk noted that onsite child care offers a valuable tax benefit for companies and can create major benefits for talent retention and attraction—drastically boosting business performance.

"Child care resources are at the top of the list [of preferred family-friendly benefits] for working parents and can be a huge differentiator in attracting and retaining top talent," Funk said. "Child care is not a perk but a necessity both for the success of working parents and employers."

Alternative Child Care Resources

Sara Redington, chief philanthropy officer for the Miles Foundation in Fort Worth, Tex., said employers that do not offer onsite child care can still be effective in supporting working parents.

Perks that could help these workers include child care stipends, resource and referral supports, and dependent care flexible savings accounts.

"Overall, it is clear that child care assistance can be a key differentiator for talent retention and one of the most impactful and valued family-friendly benefits," Redington explained.

Flexible hours and remote work options give working parents the autonomy to get work done through a nontraditional schedule, while also prioritizing and being present for important parenting moments, such as attending a school function.

"Many of the Best Place for Working Parents Innovator Award winners cite flexibility and remote work as core to their culture of supporting working-parent employees," Redington added.

Family-Friendly Benefits: Good for Business

Gail Holtzman, attorney with law firm Taylor English in Tampa, Fla., said the COVID-19 pandemic caused many working parents to leave the workforce, reduce their schedules, and consider different career paths or types of jobs.

Women felt the brunt of these challenges, as they've largely been tasked with meeting work demands while caring for their parents and children.

"Some employers, such as in the hospitality industry, have been forced to reduce their hours of operation due to staffing shortages," Holtzman said. "Employee benefits that will encourage employees to stay in the workforce are becoming increasingly important."

Reports have shown that 70 percent of women who have left the workforce, many of whom are parents, would have stayed for more flexibility. Losing women who are parents could erode an organization's social fabric and further intensify burnout on other employees, according to a 2021 McKinsey and Company study.

Family-friendly benefits can help employers enhance a company's overall culture and support a more inclusive and diverse workplace critical to attracting and retaining talent, according to a 2020 Emerging Trends in Health Care survey.

Redington noted that workplaces with the most family-friendly benefits perform measurably better than their competitors in revenue growth, employee retention, productivity, innovation, resilience, agility and customer service.

"We know that businesses are competing for top talent in a highly competitive labor market," Redington said. "And family-friendly policies have become not just valuable to this effort—but critical."