Employers are sweetening childcare allowances as a way to entice staff
A sign in the window of Bright Horizons Early Education and Preschool indicates that daycare will be closed on April 2, 2020 in the Seaport District of Boston.
David L. Ryan | The Boston Globe via Getty Images
As the offices reopen, employers are sticking to their lessons from the Covid pandemic of the importance of responding to workers’ needs by offering services that extend to childcare more than before.
When working parents juggled jobs and care during the health crisis, companies became aware of this. The result is that services such as accompanying child care are more likely to be offered or day care is planned on site. For companies that have already offered these services, the services are expanded to include offers such as affordable tuition to secure skilled workers. These benefits, along with reduced hours or working days from home, are designed to break down the barriers that hold some parents away from work by doing more to help employees reconcile their work and caring responsibilities.
These benefits are especially important for women, who still bear the brunt of family care responsibilities – a point that became even more apparent during the pandemic.
Although women make up less than half of the U.S. workforce, they accounted for much of the decline in the workforce in the first year of the pandemic. The data collected by the Pew Research Center showed that 2.4 million women left the labor market between February 2020 and February 2021, compared with 1.8 million men.
One of the biggest hurdles for working parents is the lack of access to affordable childcare. Only 39% of McKinsey’s American Opportunity Survey respondents who have incomes under $ 50,000 and have children at home said they could afford childcare. For the online survey, 25,109 people over the age of 18 were interviewed in the United States between March 9 and April 8.
While the lack of affordable childcare was an obstacle for many long before the pandemic, the crisis has put a greater burden on parents. Some were concerned with closed facilities, more restricted offers or struggled with concerns about the possible spread of Covid-19 in day care centers.
As the number of Covid cases has dropped sharply from its peak and vaccination rates are increasing, companies are trying to get women back into the workforce – something like this has not happened for a long time.
“The last time we really saw childcare – and corporate efforts to bend over backwards to increase women’s participation in the labor market – was really in the late 1990s,” said Diane Swonk, chief economist at Grant Thornton.
“There’s no muscle memory we go through in terms of being tight in the job, it’s something unprecedented that we’re all trying to open up at the same time,” she said. “Consumers are spending and businesses are trying to get up and running faster than workers are either able or willing to return.”
The use of Backup Care is increasing
Bright Horizons Family Solutions, which manages employer-based childcare and enables childcare and educational services, is seeing greater demand for its services. His clients include General Motors, Amazon, Apple and Facebook.
More than 100 new Bright Horizon customers added the benefits of backup care over the past year. This service enables employees to take their children to a Bright Horizons daycare at the last minute if their childcare is down.
According to Maribeth Bearfield, chief human resources officer at Bright Horizons, emergency care use was about 20 times higher in the first three months of the pandemic than it was before the pandemic. And it continues to be on the rise during Covids, she said.
“People know that especially for important workers, they need childcare to get to work,” she said.
In a customer survey, Bright Horizons found that without backup supervision during the pandemic, 50% of employees would have had to cut their hours, 33% would have missed important deadlines, and 20% would have taken leave or quit their jobs, Bearfield said.
Companies that have already offered backup care are also adding other services, she said. Bearfield says the number of employees served by Bright Horizons has increased nearly 20% over the past year.
“Ten, 15 years ago, as an employer, we wanted to do everything we could to support our employees, but we haven’t come as far into family support as we do today,” said Bearfield. “An employer would never have thought that he would have to offer his employees tutoring or nanny networks.”
The benefits can range up to the financing or reduction of childcare.
“Whoever thought your employer would pay your babysitter for you, but employers are starting to do that,” Bearfield said. “Forward-thinking employers knew they would have more productive employees if they could help working mothers … get to work and relieve some of that stress and the psychological burden of childcare.”
Other employers might consider converting office space into daycare and hiring a company to manage it.
“It significantly reduces the cost of childcare for its employees,” said Cindy Lehnhoff, director of the National Child Care Association. Lehnhoff looked after day-care centers close to the employer at Mercedes-Benz and Carnival. The overhead cost of renting space can be anywhere from 25 to 35% of the running cost of a normal daycare center, but if the employer pays these costs, they can reduce the parental rate.
Support the whole person
All in all, according to a McKinsey survey conducted June through August 2020, nearly half of companies have started offering or expanding access to parenting and home-schooling resources for their employees.
Carter’s, a children’s clothing retailer and one of Bright Horizon’s customers, held several meetings over the past year to hear the problems of working parents. This conversation showed the importance of family support.
“Our employees were looking for psychological and emotional support for themselves and their children,” said Jill Wilson, Carter’s senior vice president of human interest and talent management. “They were looking for ways to entertain, raise and keep their children busy while they were at home rather than at school or daycare. They needed opportunities to work and take care of children at the same time.”
These discussions inspired the creation of a resource list on Carter’s Benefits website of tools, resources, and organizations that can provide support to parents, sorted by age group of children. The company also added improvements to the package offered by Bright Horizons. New benefits have been added, including tutoring for school-age students, priority enrollment and discounts on the Bright Horizons network of childcare centers, and discounts on enrichment programs and camps.
These family-oriented perks have been added along with additional help for mental and emotional health, as well as tips for better sleep.
“We will continue to strive to support the well-being of the whole person – be it physically, emotionally, socially or financially. As schools and daycare closed we saw the real value of a benefit like Bright Horizons supportive care, and we continue to see valued use as employees get back into a routine, “said Wilson.
Offers for older children and seniors
The shift towards a stronger focus on family-oriented benefits by companies is not limited to just supporting workers with young children. Benefits are also expanding to meet the needs of older children or even the parents of employees.
Since many high school students attended classes from home, employers try to help parents fill the gap created by distance learning, with tutoring services or access to exam preparation, help with orientation at the university or with writing applications.
“During Covids, these resources were no longer only available to high school students, so I think employers go there, ‘we have to do everything we can to keep our employees,'” Bearfield said. “I think the bottom line is that employers risk losing employees if they are not flexible.”
Best Buy, which offers additional childcare to its employees through Care.com, offers tutors for children aged 5 to 18 years old with a monthly refund of $ 100 at leave. And Best Buy became more flexible and offered employees the opportunity to reduce their working hours or to share a full-time position with another employee.
The care allowance, which offers employees full pay for caring for relatives for four weeks, has been extended to include siblings, in-laws, grandchildren, grandparents and children aged 18 and over. So far, the benefit only covered spouses or partners, parents and children under the age of 18.
The electronics retailer also launched Wellthy, a care concierge who helps individuals find care for family members with complex, chronic, and ongoing care needs, as well as finding nannies or childcare.
With an aging US population, it is important for companies to provide assistance to older parents.
“We have an economy where we need all hands on deck because of aging demographics, and it does so across the developed world,” said Swonk.
It is too early to say whether these efforts to reintegrate more people into the labor market will be successful. It will likely be more obvious at the same time schools reopen, making it difficult to unravel the two, Swonk said.
“One of the things the pandemic did is … [push employers to start] Seeing workers as people who have needs rather than goods that can be exchanged and easily replaced, “Swonk said said. “This is a big change and gives workers a moment of bargaining power that they didn’t have, especially for women who already have the short end of the stick.”
The shift could stay here to stay. Both government and consumers place greater emphasis on the importance of diversity in the workplace. An expansion of family benefits could make it easier for people from different backgrounds to enter or return to work.
“We’ll see this become increasingly important, not just because we know that more diverse job markets and diverse workforce are everywhere [companies], especially in the C-suite, are delivering better financial returns, but we are also seeing market and government demands shifting to demand more diversity, equity and inclusion, “said Swonk.