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Employer’s Upsides to Offering Childcare Benefits

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By: Jean Buehler
Jul 21, 2020 • 4 min read

Employer’s Upsides to Offering Childcare Benefits

Think about it as an investment for many business decisions. It is vital to consider decisions based on the potential return. Childcare is no different. There might be initial costs to offering paid parental leave or starting on-site childcare. However, the benefits of this decision might be too tempting to turn down.

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Employee Engagement and Retention

Although the birth rate in America is declining, having children is a part of living a fulfilled life for many people. Still, having children comes with a large amount of stress and a dire need for support from families and communities. Pregnancies, newborns, and young children bring joy but also worry about the changes to sleep, finances, and schedules that their parents will have to make. Coincidentally, rest, finances, and schedules are all parts of someone’s life that also have to do with work. Since this is true, that means making meaningful adjustments to the work environment in light of family planning will alleviate some of this stress and help employees remain focused and engaged. At the same time, they take the journey into parenthood.

Tax Breaks

Tax breaks can be a significant relief for any business. Still, smaller companies are especially able to feel financial relief while maintaining the ability to do good things for their employees. The federal government gives a $150,000 break to businesses with qualified child care programs, such as on-site child care. This break can be combined with a 35% deduction of unrecovered costs from child care. Patagonia launched on-site child care in 1983. The company ​annually makes back half of what it spends to run child care in tax breaks alone​. Patagonia calculated that, coupled with engagement and retention, they have a 91-125% ROI for childcare, as well as JP Morgan Chase and KPMG.

Beyond Economic Thinking

It is necessary to encourage employers to do good things based on the financial benefits. However, it is also important to acknowledge the social factors that inherently call for access to child care. In America, child care has historically been a source of inequity across gender and racial divides. Uneven burdens have been put upon women, and especially women of color. For example, in the 19th century, wet nursing and nannying became popular for white families in America. This allowed white women to have increased leisure time while black women, often enslaved, would care for and nurse white children ​as the mortality for their own children climbed and climbed​.

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New Opportunity

Offering child care benefits will allow women, and specifically women of color, to break into the workplace in a way that they were unable to before. It will enable fathers to help with childcare in a more meaningful way than what has previously been expected of men. If on-site child care is offered, it will allow child care workers, who are disproportionately victims of racism and poverty, access to full employment benefits. This would ​not necessarily be the case as private nannies or babysitters​. The fact that such a direct way to address social issues in America is affordable and accessible to businesses is a gift. So, it would be good for the conscience, the wallet, and the society to take advantage of it.

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