Benefits and Compensation, Recruiting

Employer-Supported Child Care—A ‘How-To’ Guide to Retain Talent and Boost Performance

Working parents consistently rank childcare benefits a top priority from employers, particularly in the post-COVID environment. Working parents, especially working moms, continue to leave the workforce at an unprecedented rate, citing child care as a major concern and often the key deciding factor in staying with an employer or in the workforce at all.

working parents benefits

The data is clear: Supporting working families is an effective strategy to promote loyal, productive employees and, in turn, positively impact a company’s bottom line. Executives and HR professionals are therefore giving greater consideration to the benefits and costs of making their workplaces more family-friendly.

As organizations begin this process, it is important to understand employees’ caregiving status and childcare requirements. Utilizing tools such as caregiver employee resource groups (ERGs), employee surveys, and open discussion sessions will help determine employees’ unique childcare needs. Employers should use a range of questions to uncover insights about possible childcare options that would benefit their employees and their business.

So You Have the Feedback… Now What?

Once the discovery process is complete, evaluate the collected data, and compare it with the current childcare policies, benefits, and resources in place to determine what gaps, if any, need to be filled.

While every business is different and there is no one-size-fits-all solution, there are several standout benefits your business can offer that can make all the difference for working families while building a stronger, more loyal and engaged workforce.

Here are six child care benefits to consider:

1. Flexible Work Schedules

Taking care of a child no longer fits the traditional 9–5 workday, and rigid schedules that tie parents to the office can make juggling those responsibilities even more challenging. Supporting working parents with flexible work environments is one of the most cost-effective and culture-defining strategies available that can attract and retain top talent. In fact, of the 30% of credentialed women who leave the workforce, 70% say they would have stayed if they had access to flexibility.

Flexible schedules may differ from company to company, depending on the employee base, work requirements, and employee needs. A few examples of policies that help create flexible work environments include no-meeting hours during school drop-off or pickup schedules, 4-day workweeks, remote work, and job sharing, among others.

2. Dependent Care Flexible Spending Accounts (FSAs) for Child Care

Dependent care FSAs or dependent care assistance plans (DCAPs) are pretax accounts used to fund the care of children under 13 years old. Parents can withhold money from their paychecks before it is taxed to pay preschools, nannies, and transportation costs. A company can also match its employees’ contributions. This way, businesses contribute to employees’ child care without mandating how they spend their money, which can have a massive impact on business performance. According to a study by Cornell University, employers that offer dependent care FSAs can save up to $382.50 per employee.

3. On-Site and Contracted Child Care

Sufficiently subsidized and high-quality on-site company child care tends to have the greatest perceived value to employees and one of the highest returns to the company. According to Bridgecare, when businesses provide child care for employees,employee absences decrease by 30% and job turnover declines by as much as 60%. Additionally, on-site child care offers a valuable tax benefit for companies. Similar to other childcare benefits, this must be open to all employees to receive the tax credit. If this benefit is feasible, on-site child care can have major benefits for talent retention and attraction, drastically boosting business performance.

4. Backup Child Care

Whenever child care falls through, it is expensive for working parents to find backup care, and they often end up using their sick or vacation days to take care of their family.

With backup childcare assistance, employers can provide or subsidize backup child care as a supplement to existing childcare arrangements, allowing caregivers to rely on emergency childcare services when an unexpected gap occurs.

The provision of backup care to employees has an immediate return on investment (ROI) because it allows parents to continue working. Data from the Early Care and Learning Council shows that an average business with 250 employees can save $75,000 per year in lost work time by subsidizing care for employees’ sick children.

5. Childcare Resource and Referral Services

Through the Employer-Provided Child Care Facilities and Services credit, businesses are eligible for a valuable tax credit of 10% of the expenses they pay to a contractor to assist all of their employees in locating child care, up to $150,000.

Businesses such as,, and offer a range of employer-driven programs to assist with finding child care, which can be a membership or free service. This type of resource gives employees access to search for and vet an appropriate childcare provider.

6. Subsidies for Child Care

Eighty percent of employed workers have trouble paying for child care, and 78% of unemployed parents need child care to return to work, according to data from the Early Care and Learning Council. Supporting employees with childcare costs can lower absenteeism, reduce turnover, increase recruitment, and boost employee productivity.

Subsidizing childcare costs creates an effective and moderately inexpensive way to offset the rising price of child care and ease the financial burden for working parents. Employers can offer childcare subsidies through direct payments to employees with children or provide partial care center subsidies that partially subsidize the cost of child care with select care centers or childcare workers.

Meeting Employee Needs

Child care is a major concern for many working parents, especially women, making it one of the leading reasons employees leave the workforce.

Businesses that step up to offer childcare support tailored to their employees’ needs will benefit in several ways, including increased productivity, improved employee retention, and the ability to attract top talent.

For HR professionals who are unsure of where to begin, reviewing and researching childcare resources and guides can be a great starting point. By offering childcare support, businesses can create a win-win situation for both employees and employers by retaining some of the top talent in the country.

Sadie Funk is the Director at The Best Place for Working Parents, a collaborative and growing network of businesses across the United States dedicated to providing support for working parents through evidence-based strategies, proving that family-friendly is business-friendly. Sara Redington is the Director of Strategy and Communications for The Miles Foundation, a private foundation that supports The Best Place for Working Parents through a public-private partnership.

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