Study Finds Child Care Benefits for Employees Effectively Pay for Themselves

A new research from Moms First and BCG finds that U.S. employers who invest in childcare benefits experience positive returns on investment, ranging from 90% to 425% ROI. For companies, this is the easiest talent investment decision you can make.

This is a huge deal since the rising childcare costs and the lack of childcare providers in the United States can keep many parents out of the workforce. This hampers overall economic growth and creates challenges for employers trying to attract and retain talent in today’s competitive labor market.

In this article by Pacific Prime, we will go through all the details of how child care benefits can be beneficial to both companies and employees.

The Crisis of the U.S. Child Care System

The childcare system in the United States is facing a crisis, leaving over 50 million parents struggling to secure adequate child care solutions, while grappling with issues like cost, access, reliability, and quality.

A lack of affordable, quality child care in the United States results in a staggering 40% of parents being in debt due to child care expenses. The U.S. economy is heavily reliant on the care system. Without it, many women simply cannot work.

Research has found that only one in three employees balance parenthood and work. Some parents miss out on new job opportunities, promotions, or travel due to lack of child care support.

Also, other working parents may have to quit working altogether. This prevents career growth, higher earnings, and career advancement. As a result, they lose out on retaining highly valuable talent, as working parents are unable to operate at their full potential without proper childcare support.

The broken childcare system creates obstacles for both working parents and their employers. Thus, affordable, quality childcare options are essential for parents to fully participate in the workforce.

How Gaps in Child Care Severely Impact Both Employees and Employers

As we’ve mentioned before, inadequate child care costs companies money every year. Working parents face significant challenges due to inadequate childcare options, resulting in disrupted workdays, lost productivity, and parental burnout.

Many parents have made career sacrifices and even left their jobs due to childcare issues, costing companies substantially in terms of recruitment and training expenses.

Here are some eye-opening statistics found in the research:

• Around 70% of working parents have had their workdays disrupted when childcare arrangements fell through
• Insufficient child care options cost companies up to USD 13 billion in lost productivity for employers annually
• Approximately 66% of working parents are experiencing parental burnout
• 63% of parents have made career sacrifices to afford child care expenses
• 58% of parents who left their jobs cited an inability to secure child care as a reason
• Replacing an employee’s costs companies up to twice that employee’s salary

Child Care Benefits Are Investments, Rather Than an Expense

Many companies have avoided offering childcare benefits, viewing them solely as an expense rather than an investment.

However, the report found that companies investing strategically in child care benefits actually see positive returns. Retaining just 1% of eligible employees can cover the cost of providing child care benefits to all eligible employees.

Also, child care benefits help employees avoid over 2 weeks of absences per year, increasing productivity. Up to 86% of respondents said they were more likely to stay with their employer because of child care benefits. Whereas 78% said the benefits gave them greater peace of mind and a career boost.

Rather than just a cost, child care benefits can provide a valuable return for companies through higher productivity, retention, and employee satisfaction when implemented effectively.

How Child Care Benefits for Workers are Paying Off

Here are more statistics to back up how and why companies should invest in providing child care benefits for their employees, based on the four impacts of adequate child care benefits for working parents:

Recruitment and Retention

• Up to 90% of employers noted that child care benefits are just as effective as paid time off and health insurance when it comes to attracting and retaining talented employees
• Up to 86% of working parents are more likely to stay with their current employer

Productivity and Presence

• Up to 88% of employers agree that offering child care benefits leads to a boost in productivity
• Working parents avoid up to 16 absences each year

Job Satisfaction

• Implementing generous family policies have been linked to improved happiness among parent employees with no reduction in the happiness of non-parents
• Companies can experience clear improvements to company culture, employee morale, and overall goodwill

Career Progression

• 56% of parents working part-time or not employed would go back to work full time if they had access to quality, reasonably-price child care options
• Up to 78% of working parents report that having child care benefits has resulted in positive career impacts

Let us Help You Sort Out Your Employee Benefits

By investing in high-quality, affordable child care solutions, companies can attract and keep top talent while supporting families, providing a valuable return far exceeding costs. Investing in childcare can be instrumental in the success of both employees and the business.

Companies can empower their employees by refreshing their benefits programs or making use of employee benefits platforms. This provides more customizable and flexible benefits based on an employee’s financial situation, healthcare needs, and stages of employment.

With over two decades of reputation as a world-renowned insurance brokerage, our experts at Pacific Prime can provide you with guidance on employee benefits, maternity benefits, and health insurance, all with expertise and impartiality

Whether you need individual, group, or corporate solutions, we can provide you with tailored advice for your unique needs.

Contact us to get started today!

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Veerabhatr Sriyananda

Content Writer at Pacific Prime

Veerabhatr is a content writer with over 6 years of experience with a particular penchant for storytelling and marketing, both in print and online. He now works with an experienced team of writers at Pacific Prime, aiming to shed light on the essence and benefits of insurance for companies and individuals by creating engaging, informative content across multiple platforms.

After obtaining his Bachelor’s Degree in Social Sciences, International Relations from Mahidol University International College, Veerabhatr has forged his career as a content writer in the travel, lifestyle, and real estate industries, writing in both English and Thai. He now continues to hone his skills as a writer at Pacific Prime, looking to engage and educate the audience by simplifying insurance.

Writer by day, and a DJ by night, Veerabhatr is a staunch music lover, and listens to all spectrums of genres available. He also loves to drink beer (moderately), eat all types of food, go to the beach, and learn about different cultures across the globe. He is also a die-hard fan of football and motorsports.

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