Learn About Employer-Provided Child Care

More about Employer-Provided Child Care

An employer that offers child care for their employees has a number of options for how to provide that benefit. Some employers provide child care tuition reimbursement for their employees. This gives a working parent the freedom and responsibility to select a child care provider that suits the needs of his or her family, and has the added benefit for the employer of being relatively simple to administer. Employers may set up corporate child care only for use by families employed at or close associates of that company. This solution may suit an employer who has a dedicated campus where a large number of employees are on site in the physical location on a regular schedule. Companies may choose to offer a non-traditional schedule tailored to the needs of their employees. For example, hospitals, research facilities or universities may choose to open very early in the morning, close very late, run a weekend schedule or stay open 24 hours a day in order to offer a benefit that helps focus on employee retention in healthcare.

How do working parents start a daycare comparison?

Many parents start by considering what would be convenient for daycare pick up and drop off.  Some parents prefer a location along their commute, close to their place of work, or in their home neighborhood. Having a range of child care locations available that accept an employer's child care benefit can help give parents the flexibility to choose the best solution for them. This can be an attractive solution because it takes into other factors like a spouse or other adult who may have pick up or drop off responsibilities. It can also be helpful for families with multiple children who may attend different schools and extra curricular activities.

What companies need to know about on-site daycare

Some employers choose to provide child care on their premises. The operations of an onsite child care center may be entirely run by the employer, or the employer may choose to outsource their onsite child care offering. There are many advantages to partnering with a child care services provider, such as Bright Horizons, for onsite child care. Being able to draw on the expertise of a child care company when providing on site care means a company can focus on their own competencies instead of trying to master how best to care for young children.

The history of employer-provided child care

When the United States Department of Labor began tracking maternity leave information in the 1960s, around two-thirds of women would quit their jobs after having their first child. Around one in twenty women would be fired outright following their first baby, with the result that seventy percent of women that had babies would not return to the workforce. Given how much is spent onboarding, training, and integrating an employee into a workplace, it is wasteful to then watch that employee leave because they can’t find child care.
Employer-provided child care helps an organization hold onto valuable employees that want to start families. In addition, a valuable prospective employee may select one company over another based on the benefits package. If one company offers child care benefits while the other does not, that can be enough to sway the decision. An employer that provides child care is more likely to win the competition for talent.

With the strain added by COVID-19, many employees have left the workforce due to child care concerns. Read our Modern Family Index for 2021 to learn about how the strain on working families has affected employers.

Employer-provided child care benefits working parents

The most obvious benefit for an employee of a workplace that offers employer-provided child care is financial. In the United States, child care costs around a thousand dollars per month. Having child care as a benefit provides critical support for working parents. Even simply looking for competent and trustworthy child care can become a distraction to a working parent. If an employer-provides child care as a perquisite for their employees, that decision can be easier as the employee can draw on the research of the human resources department when making a decision about child care.

When an employer offers back-up care, a working parent of school-aged children can cross a stressor off their list of challenges. Instead of having to drop everything at work and scramble when after school arrangements fall through, a working parent whose employer offers backup care may be able to use their employer-provided child care.

Impact of employer-provided child care on life/work balance

An employer that provides child care as a benefit for their employees sends a strong signal that they care about their workforce. An employee that wants to start a family may be more committed to an employer that acts as a partner in helping provide care. Employer-provided child care has been shown to reduce turnover of female employees. For industries with high turnover and higher ratios of female employees, stopping the outflow of skilled care providers is crucial. For example, the healthcare industry experiences turnover rates as high as 30% for nurses. Given that around 90% of nurses are female, employer child care benefits are a key tool for employee retention in healthcare.