Steps to modernize your benefits offering for working parents

Imagine a single mom who is trying to balance a demanding career at a marketing firm while raising her 5-year-old son and 3-year-old daughter. She is thankful to work from home since the pandemic, but she just got notice that by the end of 2024, they will be required to be in the office four out of five days a week. As this transition looms, she wonders how she will find two spots at the same daycare, how she’ll have to juggle drop off and pick up with her commute, and crossing her fingers that she can afford it all. After all, she moved to a more affordable, but more rural neighborhood, during the pandemic because it was cheaper than living in a metropolitan area.

This is the reality for many working parents who are faced with the return-to-office mandates coupled with the extreme shortage in childcare availability. In September of last year, the pandemic-era relief funds for childcare support ended, which means that an estimated 70,000 childcare centers are expected to close in the coming years, causing 3.2 million childcare spots to disappear.

The effects of this cutoff will be felt across the U.S. economy and workforce—in particular with working parents leaving their jobs entirely. In fact, it is projected that millions of parents will be impacted with many leaving the workforce or reducing their hours, 3 million children finding themselves without care, costing families $9 billion each year in lost earnings.

Even before this cutoff, the challenges related to finding childcare options have been growing across the country. Only a third of families can afford childcare, which consumes 27% of their income on average. Working parents are leaving large cities because they cannot absorb the costs of childcare, while those in rural areas often cannot find care at all.

In looking at the data across Cariloop’s membership base, consistently four of our top five pediatric-related case needs that members need support with are child care, nannies and babysitters, daycare facilities, and backup care. We attribute this to the child care cliff dropping off in September 2023, as well as the supply and demand challenges around childcare.

With 64% of CEOs wanting their workforce to be fully back in the office by 2026, the number of challenges working parents and families face in finding affordable childcare options is only expected to rise. And yet, we end up with a broken system where the majority of American families are unable to pay a caregiver, while many childcare workers can’t live on what they are paid. Nearly one-third of childcare workers have experienced food insecurity, and more than 100,000 have sought other forms of employment since the start of the pandemic, desperate for better pay.

The bottom line is this—with costs rising, fewer care providers and slots in centers, and more parents returning to the workplace, it’s no wonder we are in a crisis. As employers, we have a responsibility to find ways to better support working parents, particularly if also mandating the return to the office.

After pulsing employers across our customer base to learn what is top of mind for them this year, it is clear finding a data-driven strategy to solve the child care crisis is the priority. But how do we solve this and find the right strategy? Consider this three-phased approach.

Add budget for child care and family benefits

Look at your current benefit offerings with a focus on working parents. Do you have solutions that employees can take advantage of as they balance work and home life? Currently, only 13% of full-time employees have access to any childcare benefits. This number is no longer sufficient and must increase in 2024. It is important to start somewhere, even if budgets only allow a small gesture at first. We have to view childcare benefits as table stakes, similar to medical insurance. Just as you cannot come to work everyday if you are not medically cared for, or healthy enough to do so, you cannot come to work everyday if your children are not cared for safely and securely.

Examine, do the childcare benefits that might already be in place do enough to support working parents? Or are they simply checking a box? Only serving a portion of your working parent population? Deploying a high-touch benefit—such as a caregiver support solution with access to a network of paid care providers—allows employers to be responsive to immediate employee needs and fill gaps in existing child care and family-friendly benefits.

After all, daycare availability is not the only child-related challenge working parents face. They could also be worried about a child’s development, academic success through the support of a tutor, finding a sitter or understanding a new diagnosis. By rewiring what we consider “childcare benefits” to be more comprehensive “caregiver benefits,” employers are meeting more of an employee’s daily needs.

Measure and look at data trends

This is the year of measurement. Start surveying your population and reviewing the data to see what it is telling you about your employee population. Look beyond whether they are using the benefit or not, go deeper into trends and patterns to see what the data is telling you, which can inform the strategy over time.

We recommend analyzing utilization through a variety of lens, including:

• The demand and needs being met – work with your benefit partners to dive in on what challenges are rising and whether they are being successfully met
• Geographic analysis – look at the utilization data from a geographic standpoint and where employees who are utilizing which benefits are located
• Types of care requests – within the family and child care benefits, see what types of care are they looking for most and if the benefit offers the solution or if employees have to look outside of it for support

If the data shows a pattern that is of interest, consider inquiring with employees further to gain qualitative information that complements the quantitative data, which can help reveal the why behind the numbers. Together, the picture of the pain points of your employees becomes much clearer.

Refine strategy based on findings

After analyzing the data and taking a hard look at the current benefit offering, you can begin to think creatively; particularly with understanding why the benefits do or do not meet the needs of your workforce, this insight will be key in refining the strategy.

For example, perhaps employees enjoy the support of having access to information and expert guidance, but there is a lack of being able to capitalize on the recommendations or available options due to a lack of funds. That is where an annual stipend could be of use and beneficial in supporting the employee find, book and pay for the help they need for their child.

Related: Flexible childcare benefits offer a critical competitive advantage

In addition, is an on-site center a realistic option if employees will return to the office five days a week? Or perhaps reserving daycare spots at the nearest facility to the office. Allow your team to reflect on what needs to be true to really support the working parents in your organization with this childcare crisis we are only just beginning, which will only help retain them.

Flexible schedules are diminishing as more return-to-office policies are implemented, which leaves many working parents in a bind to find childcare options. With the shrinking availability, coupled with the number of needs parents are working to meet daily at home, employers can no longer sit back and do nothing. There is a responsibility and the time for action is now—not next year or the year after. If new solutions and resources are put in place that help employees with their childcare needs, their loyalty and sense of comfort knowing their employer is trying to set them up for success will also grow. And they can focus on work, bringing their best, most productive selves to work. This is the year for action and exploring how we collectively solve this childcare crisis, are you ready?

Julie Devine, Chief Growth Officer, Cariloop