The Loop

Childcare Trends in the Workplace

Filed under: Benefits

One third of US working adults have a child aged 14 or younger living at home. The demand for childcare is essential for work but, to date, the burden of finding and affording high-quality caregivers has primarily been up to parents. Even before the pandemic, gaps in dependent care collectively cost working parents $37 billion a year in lost income; employers ceded up to $13 billion a year in lost productivity.

After the onset of the pandemic, those numbers grew exponentially. Nearly one in five working parents had to leave work or reduce their hours solely because they lacked childcare. As a result, childcare demands due to school and daycare closings sacrificed approximately $700 billion in lost revenues and productivity. That equates to a 3.5 percent reduction in the country’s gross domestic product (GDP).

For this reason, economists now recognize childcare as a contributing economic factor. Both employers and the government are seeking ways to help shoulder this burden on behalf of working parents.


This isn’t the first time childcare has become a national priority. During World War II, when men were sent off to battle and women were expected to fill their jobs, the federal government established the Lanham Program, which was part of the 1940 National Defense Housing Act. Under this provision, community organizations could apply for federal funding for childcare services by demonstrating needs related to the war. Unfortunately, once the war ended, so did the program.

Current Trends

Today, many employers have expanded benefits and resources to help working parents get the dependent care they need in order to be fully engaged at work. Some of the newer trends in childcare benefits include:

  • Paid memberships to online platforms that vet care providers
  • New parent support
  • One-on-one personalized counseling/planning
  • Cash subsidies to help pay for care
  • On-site childcare center
  • In-home backup care options
  • In-center backup care options
  • Tutoring

The following benefits represent some of the most prevalent trends in the wake of the pandemic.

Flexible Work Schedules and Remote Work for Parents

An April 2021 employer survey found that 87 percent of firms were considering hiring workers on a remote basis. If flexible schedules, remote work or even hybrid arrangements become a corporate mainstay, it could have a significant impact on local economies. For example, traffic and transportation demands would be reduced (which also could improve air quality and reduce the carbon footprint). There would be less need for commercial real estate, which could perhaps be converted into affordable housing options. Today’s outlying office parks could transform into new suburban areas.

Meanwhile, the scope of dependent care would likely alter, ranging from in-home care “pods” to local co-ops, in which neighbors and/or communities sponsor and perhaps even solicit parent volunteers to take turns as co-op center caregivers. These concepts could help alleviate the caregiver shortage and make childcare more affordable, while flexible schedules (e.g., four-day workweeks) would allow parents to spend more time with their children and to get to know other children and families in their community.

Childcare Resources for Non-Traditional Work Hours

However, remote work is not an option for all workers. In fact, about half of the US workforce must be on the job site to perform their duties. Furthermore, many of these positions require third shift, “on-call” availability, or other variable hours that change from week to week. Some companies use workforce management technology to deploy algorithms for scheduling workers based on projected consumer demand. That’s great for reducing unnecessary overhead expenses for employers, but a nightmare for parents who need to schedule ad-hoc childcare. Parents who work varying schedules typically get no more than one to two weeks advance notice of their work schedule. This can create a persistent and stressful challenge of finding childcare options for irregular work hours.

Employers can help address these childcare challenges by surveying their workers and soliciting ideas. They could even survey recent company retirees to gauge interest in earning extra income working as an overnight nanny or providing backstop caregiving resources. Consider that many older women whose children are grown, especially widows, may miss having a full household and would enjoy cooking and caring for children whose parents are at work.

Increase Childcare Subsidies as Employee Benefits

It is unfortunate that, at present, the federal tax code does not offer corporate tax incentives as it does for providing health insurance. Moving forward, corporate lobbyists may work more aggressively with Congress members to develop this type of legislation. In the meantime, there are steps local and state governments, as well as employers, can take by offering childcare subsidies. For example, California and Massachusetts have established state funds in which employers make contributions that can be used by workers for caregiving expenses, including for disabled and elderly family members.

Provide On-Site or Local Childcare Spaces and Supervision

Offering an onsite childcare center is an awesome responsibility and potential liability. However, it also provides a way to tackle several issues at one time. One issue is that of un-used real estate, now that many people are working offsite. By repurposing space for a childcare center, or renting it to a vetted organization to run an onsite childcare facility, some firms may be able to recoup expenses associated with unused commercial property.

Second, onsite daycare is not only a huge benefit for workers, but it offers an incentive to return to the office rather than work from home.

To help offset the expense of an onsite daycare facility, and even subsidize fees for workers, several employers in the same locale – such as an office building or office park – could pool resources to provide quality onsite childcare. There may even be demand for disabled or senior onsite caregiving, based on the needs and demographics of the pooled labor force.

In fact, it’s not uncommon for the elderly to engage with children and teenagers as part of an integrated caregiving program. Reading aloud, offering one-on-one attention, tutoring, and even sharing life experience within a daycare program offers potential benefits to all participants – including workers. Imagine a center where workers can bring elderly parents who should not be left alone, preschoolers, and provides a daycare bus that picks up students and brings them to the center for after-school care (and help with homework from engaged seniors). It’s an all-hands-on-deck family solution that addresses many caregiving challenges that today’s workers face.

It will take out-of-the-box thinking like this to develop caregiving benefits that meet workers’ complex needs. But during this era of the Great Resignation, innovative benefits may be just the ticket to re-establishing loyal and productive workers.

From a logistics perspective, be aware that an onsite daycare facility presents health and safety liability issues for employers. It is important to learn about all local regulations and certification requirements, as well as to hire experienced architects and contractors familiar with local childcare building ordinances for fire and health department safety regulations.

Bias Issues

Note that beefing up childcare benefits can be counterproductive if parents feel the weight of judgement by colleagues and managers. Whether responding to childcare emergencies or occasionally needing to bring a child into the office while they work, the company culture should be understanding and accommodating of these needs. After all, it is stressful enough for parents to have to deal with these situations; it’s worse when frowned upon by co-workers.

Organizations committed to family-friendly benefits need to cultivate a workplace perspective of empathy and acceptance by all. Companies may wish to assign a room or a closet stocked with child-friendly entertainment (e.g., drawing materials, games, puzzles, iPads, television) so that children can be engaged and less distracting within the workplace.

According to a study by McKinsey & Co., there are several factors predictive of when workers consider leaving their employer due to a lack of family-friendly benefits:

  • Intolerance and inflexibility with regard to dependent care needs
  • Feeling like they need to be available at all hours (i.e., “always on”)
  • Increased housework and caregiving burdens due to COVID-19
  • Worrying that their performance is negatively judged due to caregiving responsibilities (24% of women)
  • Feeling unable to be fully focused and engaged at work
  • 29% of women have experienced discomfort sharing work-life challenges with their managers (1.5 times more than men)

It is important to put major benefit changes in historical perspective. For example, when employer benefits were first developed, it was a time when most households were comprised of married couples in which the wife stayed home to raise the children. Benefits have evolved with the times, and this era calls for increased childcare options.

Furthermore, big changes usually follow periods of struggle. For example, the Social Security program was established in response to the Great Depression. Health insurance plans became prevalent after World War II as a recruitment strategy. Labor unions emerged due to the need protect employees from harsh working conditions.

The pandemic presents one of these transcending moments in history. Employers are faced with the challenge of recruiting and retaining long-term workers who demand higher wages, schedule and worksite flexibility, and greater work-life balance. Innovative dependent care options represent a benefit with the potential to meet many of these demands. Like health insurance, childcare is a “sticky” benefit that parents would think twice about disrupting in order to seek another job.

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