Flexible childcare benefits offer a critical competitive advantage

There is nothing more stressful for working parents than a lack of affordable childcare solutions. Parents who struggle to balance their professional and family lives often experience stress and burnout, which can lead to turnover. Beyond the pain this inflicts on families, it also imposes tremendous costs on companies, from lost employee engagement and productivity to the financial burden of hiring and onboarding new people.

As employees are returning to the office and companies move toward a hybrid model, employers are updating their benefits policies to meet the need for childcare. While childcare services require an upfront investment, they have the potential to generate significant value over time and offer a major competitive advantage by increasing employee morale, performance, and ultimately retention. To maximize the ROI of childcare services, HR teams should make their benefits packages more flexible to help parents cover costs more easily.

When companies offer benefits such as parental leave and other forms of childcare support, employees embrace them. This doesn’t just improve the financial security of your workforce but also increases your bottom line in the long run. Employees’ careers shouldn’t suffer because they decided to have families. Providing robust childcare support has shifted from a “nice to have” benefit to a necessity.

The rising demand for childcare support

Working parents cite childcare as one of the top benefits a company can offer, and the demand is only becoming stronger. According to a recent McKinsey survey, 69% of women with children under the age of five say they’re “more likely to choose an employer that offered assistance with childcare expenses or provided access to on-site childcare.” Over 80% of men and women say the availability of childcare benefits is an important factor when deciding whether to stay with a company.

Employees with young children continue to face a series of obstacles: many of the childcare centers that closed during the pandemic never reopened; families had to simultaneously deal with COVID-19, flu, and RSV last winter; and only 8% of working parents report that their employers provide emergency childcare options. Forty-five percent of the mothers with young children who exited the workforce during the COVID-19 pandemic said childcare was a major reason for leaving.

These obstacles still exist for many parents, so it’s no surprise that there’s more demand than ever for childcare. This means the HR teams that offer the most comprehensive and flexible versions of this benefit will be in a better position to attract and retain talent in the years to come.

Companies are still failing to prioritize childcare

There are many forms of childcare assistance HR teams can offer, such as onsite care centers and flexible scheduling and work arrangements. Flexibility is particularly important, as not all companies can afford to provide on-site access to childcare. Even for remote employees, a flexible schedule and work arrangements that accommodate childcare needs are crucial. It’s no surprise that the aforementioned McKinsey survey found that roughly half of respondents cite “flexible working arrangements as the top reason they would pick one job over another.”

Despite all the evidence that working parents are in dire need of childcare solutions and willing to switch companies on that basis (a majority even say they would take a pay cut in exchange for high-quality childcare), companies are failing to provide it. PwC reports that 81% of executives think they have successfully extended childcare benefits, but just 45% of employees agree. This is a sign that HR teams should be having an open dialogue with working parents about whether their needs are being met and how the company can help them balance work and family life.

The demand for childcare assistance is consistent with the increasing emphasis on work-life balance among employees, 90% of whom say finding this balance is an important aspect of their jobs. For working parents, finding a way to care for their children without sacrificing their professional ambitions is vital, and HR teams have a responsibility to help them do so.

How HR teams can provide flexible childcare options

Flexibility is the key to supporting employees who have children. Whether HR teams provide on-site services, financial benefits that help pay for childcare costs, or work arrangements and scheduling oriented around parents’ needs, the goal is to give them the latitude to take care of their kids without falling behind at work. This is how HR teams can support diverse, multigenerational workforces without compromising on productivity or company culture. If anything, giving parents the space and resources necessary to strike the right work-life balance will boost productivity.

Companies are increasingly supporting employees’ desire to start families – for example, the availability of fertility benefits has risen sharply in recent years. But there are also many ways HR teams can repurpose existing benefits to address employees’ childcare needs. Recall the fact that just 8% of employees say they have emergency childcare options. This status quo is unacceptable, and HR teams can offer a solution with PTO options that cover families in the event of an illness or if they can’t find childcare. HR teams can also allow parents to direct the value of unused PTO toward the cost of childcare services such as daycare, medical bills, and an array of other family-related financial burdens.

Related: Think remote and hybrid employees don’t need childcare support? Think again.

When working parents receive the childcare assistance they need, they see that the company is committed to their wellbeing at home and in the office. This decreases stress, increases productivity and engagement, and makes it more likely that working parents will stay with the company over the long term.

Rob Whalen, co-founder and CEO of PTO Exchange