Good Business, Good Outcomes: Child Care
Our January focus on businesses trends that impact child and family health continues, with another employee benefit that can be good for business and good for families.
Imagine a family of four, two parents who work full time, and two kids who are not yet school age. 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 get to work early so that 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 shortest 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 are the day's wages lost, but the daycare bill doesn’t give sick days. The employer has lost their employee for at least the rest of the day.
This scenario gets played out every morning by 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, “In-state college tuition is cheaper in 23 states than childcare for a 4-year-old”. 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. Nearly half of two-parent families have two parents working full-time which means that 48% of families require daily childcare services.
Given these statistics, it would be 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 the daycare is high quality and provide subsidies for employees as a benefit. However, the National Study of Employers showed just seven percent of companies in the United States have on-site childcare, a fact that has remained the same through the 2012, 2014, and 2016 survey years.
This proportion rises when one looks at top companies in America. Seventeen of the Fortune 100 companies (or 24%) have on-site childcare, a workplace policy that is deemed ‘family friendly’. As we noted in the case of paid family leave on our last blog post, family friendly policies have the potential to have more impact than their cute name suggests.
Patagonia has offered on-site childcare since 1978. Thirty years of data has shown this to be good for their employees and good for their 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 the child care center at Patagonia 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 which adjusts to employee wages. The Bon Secours St. Mary’s Hospital child care for employees 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 the work done by economist James Heckman. Quality early childhood education provides a 13% annual rate of return for investment through better education and health outcomes.
There are several other business policies that would have an impact on the family in our scenario outside of 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 largely gone unchanged in the last eleven years, despite the fact that childcare is an on-going need for working families.
The Community Toolbox has great resources for promoting family-friendly policies in business and government. Child care benefits for working families make good business sense and create good outcomes.
Genesis Health Consulting has deep experience in creating smart, effective and sustainable systems change in support of child health and well-being. Please email us at email@example.com to learn more about our work in this area.