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Big Data: Building the Case for Employer-Provided Care Benefits

Patrick Ball on September 29, 2016 10:19 AM

A pair of new reports putting a spotlight on America’s mounting care crisis also shed light the importance of family-friendly employee benefits to both working parents and their employers.

The Care Index, a data and methodology collaboration between and the public policy institute New America, provides a first-of-its-kind comprehensive look at the cost, quality and availability of child care in all 50 states and Washington, D.C. The interactive data set delivers facts and figures that illustrate the conflict many families feel when trying to balance care and work responsibilities.

Further illustrating the America’s mounting care crisis is a recently released – and ominously named – report from the Center for American Progress, “The Cost of Inaction.” The CAP report details the billions in lost wages that families lose out on annually due to the lack of access to affordable child care and paid leave.

Let’s take a look at some of the staggering statistics and findings from these reports to see why business leaders need to take stock of America’s care crisis and how they can help employees … and themselves.

  1. Child Care Costs a Huge Chunk of Household Income
    The average cost of full-time care in child care centers in the U.S. for one child is $9,589 a year – that’s almost one-fifth (18 percent) of median household income, according to Care Index data. In-home care is even more expensive. The typical cost of using an in-home caregiver, or nanny, is $28,353 a year – equal to more than 50 percent of U.S. median household income.

    Care costs are even more overwhelming for low-wage earners. For an individual making minimum wage, the cost of full-time in-center care is about two-thirds (64 percent) of annual earnings. The average cost of a nanny is 188 percent of the income for an individual earning minimum wage. Given those statistics, it’s no wonder many of today’s parents ask themselves: Does it pay to work?

    Read More About How the Cost of Care Influences Parents' Career Choices 

  2. There Codependency Between Care and Work is Undeniable
    Both the Care Index and CAP report address the seismic shift in family composition and dynamics that has taken place over the past several decades. There’s no such thing as a “typical” American family anymore. In most households with children, there are no stay-at-home parents. More than 90 percent of dads and roughly 70 percent of moms work outside the home, according to the Bureau of Labor Statistics.

    These demographic shifts dictate that, for the majority of American families, there is a codependency between care and work. They need reliable care to be able to work, and they need to work in order to afford that care. For many families, finding that balance is easier said than done. Consider South Dakota: In 82 percent of the state’s households all parents work, yet it has the lowest availability of care, according to the Care Index. This suggests a lot of South Dakotan families rely on informal care arrangements. A dearth of quality, reliable child care could also mean South Dakota employers could see care-related absenteeism and other performance issues affecting bottom line results.

  3. A Cost to Us All
    The high cost of centers and nannies is not the only significant impact of our care crisis is significant. According to the CAP report, the U.S. loses out on at least $28.9 billion in lost wages due to the lack of access to affordable child care and paid leave. The breakdown attributes $8.3 billion in lost wages due to the lack of child care alone. This statistic cuts both ways. American businesses also lose tens of billions annually in care-related lost productivity costs, like absenteeism, presenteeism and turnover. 

    It’s not a stretch to see how those lost wages relate to lost productivity. In’s third annual Cost of Care survey, two-thirds of parents said the child care costs have influenced their career decisions. Taking second jobs, changing jobs and even leaving the workforce were among the most common responses parents gave to how care costs impact their career choices. For their employers, that can add up – turnover is a billion-dollar cost for American businesses. 

    Find Out How Family-Care Benefits Improve Employee Productivity 

  1. Only 11 Percent of Child Care Establishments are Accredited
    Accreditation is only one measure of quality, but it is a key initial indicator. The Care Index revealed that only 11 percent of child care centers and family child care providers are accredited by the National Association for the Education of Young Children (NEAYC) or the National Association of Family Child Care (NAFCC). Among mothers who do not return to work following the birth of a child, concerns about the quality of care her child will receive is frequently cited as a main factor in that decision.

  2. Parents Want Care Benefits, But They Remain Super Rare
    Eighty-five percent of parents say they wish their employer offered child care benefits. In fact, almost two-thirds of parents – and 83 percent of Millennials – say they’d leave a job for one with better family-care benefits. Hard to blame them when you see statistics like those in the Care Index and CAP’s reports.

    And yet millions and millions of American workers don’t have access to family-friendly benefits, like paid parental leave, child care assistance or even paid sick days. Less than 15 percent of private sector workers have access to paid family leave of any kind. According to the Society of Human Resources’ 2016 benefits survey, just 3 percent of organizations offer unsubsidized day care services, down from 9 percent in 1996.About 15 percent provide child care resource and referral services.

But enough of the doom and gloom already. There’s plenty of evidence that the tide is turning – from the dozens of companies who’ve announced new parental leave policies to the fact that presidential candidates from both major parties are talking about paid leave and the cost of child care. Using this data to take stock of where we are is a necessary step on the road to improving conditions for our families, businesses and the economy.

So what can business leaders do to support working parents? And why does it make good business sense?

  1. Provide Paid Parental Leave
    When parents have access to paid parental leave, it’s easier to make the transition from workaholic to working parent. Not only is it important recovery time for a mother after giving birth, but it’s vital bonding time for both parents to spend with their new child. Studies have shown there are also important long-term positive impacts on the child’s health, development, educational and professional outcomes.

    Introducing or expanding your parental leave program will require an initial investment, but one that should prove worthwhile. As long as the United States remains the only industrialized nation without a national policy providing paid leave for new mothers, employer-provided maternity and paternity leave benefits will be an effective recruiting and retention tool for companies. Progressive employers, like Google and Ryan, have experienced – and reported on – lower turnover following expansions of family-friendly programs like paid leave. Need more convincing? Optimizely has published its own financial model to advocate for more companies to provide paid parental leave.

    Check Out 7 Companies with Innovative Parental Leave Policies

  2. Introduce Family-Care Benefits
    We already told you that 85 percent of parents want child care supports, and that two-thirds of parents would leave a job for one with better family-care benefits. But that’s only part of the story.

    Nearly 3 out of 4 respondents (74 percent) in com’s third annual Cost of Care survey, reported their job has been impacted because their child care plans fell through last-minute. Most frequently, they’ve had to miss a day of work. These impacts to individual employees can quickly become impacts to a company’s bottom line if you allow care-related absenteeism, missed deadlines and lost productivity to pile up. However, when employees have access to backup care through a service like Care@Work, they’re able to work at least 5 more hours a week and as many as 7 additional days per year.

    As the Care Index data makes clear, reliable, quality care can be hard to find. But when an employer is able to provide access to center-based solutions and in-home options through a resource and referral service like Care@Work’s, then employees are able to be more confident in the care that their children are going to receive. Knowing their loved ones are well cared for enables those employees to be more present, productive and engaged while they’re at work.

  3. Get Flexible
    Believe it or not, working parents put flexibility at the top of their list when evaluating employment opportunities. That’s ahead of salary, retirement and company reputation, according to a new study by the career resource site Asked why they seek flex work options, most parents cited work-life balance (84 percent) and family (83 percent). In fact, more than 90 percent of working parents said having kids at home has affected their interest in flexible jobs.

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