Good Business, Good Outcomes: Child Care

Imagine a family of four: two parents who work full time and two kids who aren’t school-aged yet.  Their morning begins early so both parents can get ready for work and get the kids ready for daycare drop-off.  Lunches are packed, bags are gathered, coats and shoes are dug out of closets. 

OH WAIT! We forgot the socks. 

Now where did his blanket go? 

Parent one jets off to work early so they can leave early to pick up the kids.  Parent two gets both kids into their car seats (no small feat) and greets the other parents in the daycare drop-off duty.  Parent two escapes the morning without food on their work clothes.  Small victories! 

The morning progresses fine, with each parent at their respective employer…until the phone rings.  It’s daycare, and the toddler vomited.  Per policy, the parents have one hour to get to daycare to pick up the sick child.  The parents call and figure out who has the least jam-packed day.  Who has any personal leave left? Who has the most flexible employer, if any?  Who has the smallest commute back to the child-care center? Parent one heads back to the car, computer in tow, to pick up the sick child.  Not only do they lose the day’s wages, but the daycare bill isn’t reduced for sick days.  The employer has lost their employee for at least the rest of the day.

This scenario plays out every morning for many families across the United States.

What eats up 10-25% of the working family’s household income? 

You guessed it: Childcare.

A recent CNN headline announced, “Childcare can cost more than a mortgage payment in 35 states”. Another proclaims, “Child care is more expensive than public college tuition in 38 states and Washington D.C.”. In fact, childcare is “unaffordable for seven out of ten American families”. The cost of childcare has risen in conjunction with a rise in two-parent working households in the United States.  More than half of two-parent families have both parents working full-time, meaning 52% of families need to figure out their childcare situation.

Given these statistics, it’s logical to think that affordable, on-site childcare would be a common employee benefit in workplaces across America.  Parents could have their children nearby the office.  They could eat with them on their lunch break. Employers would take on the work of ensuring high-quality daycare and provide subsidies as a benefit. However, the National Study of Employers showed that only 7 percent of companies in the United States have on-site childcare, a figure that remained the same in the 2012, 2014, and 2016 survey years.

This proportion rises among top companies in America.  17 of the Fortune 100 companies (24%) offer on-site childcare, a workplace policy deemed ‘family friendly’.  As we noted with paid family leave, family-friendly policies can have more impact than their cute name suggests.

• Patagonia has offered on-site childcare since 1978.  Thirty years of data show this benefits employees and the business. “100% of the women who have had children at Patagonia over the past five years have returned to work, significantly higher than the 79% average in the United States.”  In addition, turnover among users of Patagonia’s child care center is 25% lower than the company’s overall workforce.
• On-site childcare, while a large initial expense for companies, offers good direct return on investment.  Patagonia estimates that 91% of the costs of on-site childcare are recouped.  J.P. Morgan has estimated a 115% return on investment. 
• Many companies offer a sliding-scale fee that adjusts to employee wages.  Bon Secours St. Mary’s Hospital’s employee child care program opened in 1989 and provides a 50 percent discount for low-wage workers, ensuring the same high-quality care is available to all.
• We know the value of early investment in childhood thanks to economist James Heckman’s work. Quality early childhood education provides a 13% annual rate of return on investment through better education and health outcomes.

Several other business policies could impact the family in our scenario beyond on-site childcare.  Flexible work schedules, child care resource and referral (CCR&R) capabilities, ability to telecommute, subsidized childcare, dependent care assistance plans (DCAP), and back-up childcare are child-care assistance benefits that greatly benefit families and employers.  Like on-site childcare, however, the prevalence of these benefits has remained largely unchanged over the last eleven years, even though childcare remains an ongoing need for working families. 

Genesis Health Consulting has extensive experience supporting efforts to improve child, family, and community health. To learn more about how Genesis Health Consulting can support your goals, visit our website or contact us.