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4 ways companies can help solve the childcare crisis

Many childcare centers never reopened since the pandemic started, and parents have been struggling ever since. Here’s how companies can help ease the burden.

4 ways companies can help solve the childcare crisis
[Photo: monkeybusinessimages/iStock]
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As employees get ready to return to work, many parents are struggling to find day care. Nearly half of childcare providers closed their facilities during the COVID-19 shutdown, according to a 2020 survey by the National Association for the Education of Young Children (NAEYC). As of April 2021, one-third of childcare centers remain closed, causing parents to cobble together childcare arrangements that often lack reliability.

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“The way people piece together childcare is like a game of Tetris,” says Nina Perez, national director of early learning at MomsRising, an online organization focused on increasing family economic security and ending discrimination against women and mothers. “Even if you appear to be winning, you eventually lose.”

In fact, the U.S. Chamber of Commerce Foundation, recently studied childcare in six states—Arizona, Alaska, Arkansas, Missouri, West Virginia, and Texas—and found that from 2019 to 2021, there was a 39% increase in the number of people missing work because of childcare issues. “The pandemic took things to a whole other level in terms of employers really understanding what their employees need,” says Cheryl A. Oldham, senior vice president of education and workforce at the U.S. Chamber of Commerce Foundation.

The problem is twofold: Reliable childcare is hard to find, especially for families of color, and childcare is expensive. The average childcare costs are higher than in-state college tuition in 30 states and the District of Columbia, according a 2019 report from Child Care Aware.

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To help employers support working parents, the U.S. Chamber of Commerce Foundation released an executive briefing earlier this year that outlined ways businesses could address the childcare needs of parents who have unpredictable schedules outside the core hours of 9 a.m. to 5 p.m., typically parents who work in retail, nursing, and manufacturing. The report suggests employers focus on providing predictable scheduling, temporary backup care, and subsidies to make childcare more affordable. “On-site employee childcare is not the only option for supporting working parents,” Oldham says.

In fact, on-site day care is difficult for employers to provide. “It requires much more than an extra conference room,” says Alessandra Lezama, founder and CEO of TOOTRiS, an online platform for finding local, on-demand childcare in 22 states. “You need to have the infrastructure to support a full-day program to deliver value to parents.” Not to mention the landlord needs to approve adding an on-site day-care program, and the employer would need to acquire extra insurance as well as hire and manage childcare personnel, which is outside their core business, she says.

Several California employers, including Dr. Bronner’s, a soap manufacturer, and University of San Diego Business School, recently partnered with TOOTRiS to offer employees on-demand childcare services. Parents can search the 122,000 providers in the online platform to find childcare near their home or work, including temporary or drop-in slots, Lezama says. “Employers can provide childcare as a benefit without having to take on the liability of on-site day care or have to manage a company that isn’t part of their core business,” Lezama says.

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Here are four additional ways employers can help parents find affordable and reliable childcare.

Provide flexible and predictable scheduling

According to the Marshall Plan for Moms, a report that outlines what parents need from their employers to return to work, 58% of Black and Latina mothers want more regular and predictive work schedules. “As companies design their return to work, they should be doing more around predictable scheduling for lower-wage workers,” says Reshma Saujani, leading activist and founder of Girls Who Code and the Marshall Plan for Moms. “For parents working in retail, it’s not uncommon to be suddenly called into work without any adults or childcare center nearby to care for your children.”

To help its call center employees balance work and family during the pandemic, Synchrony, a consumer financial services company in Stamford, Connecticut, has allowed its hourly associates to work split shifts. Associates can divide their workday into two parts and work four hours in the morning, take a two-to-three hour break to take care of their families, and then work a second four-hour shift later in the evening, says Claudine Hoverson, Synchrony’s senior vice president, chief talent officer. Associates also can work a 30-hour week and still receive their full benefits, she says. “Our call center associates can work different schedules and find the balance they need, especially with childcare and school schedules,” Hoverson says. Nearly 70% of Synchrony’s hourly associates are women, she adds.

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Arrange for backup care

According to the Marshall Plan for Moms, 60% of moms want their employers to provide backup childcare, with 76% of Black, Latina, and Asian moms expressing the highest need for emergency day care. “Women of color are overrepresented in jobs, like retail and nursing, where they are required to be on call,” Saujani says.

Although Synchrony has offered backup care since 2014, prior to the pandemic, employees could only access up to 10 days of emergency childcare. In 2020, the company expanded that benefit to up to 60 days, which includes access to thousands of licensed professionals for in-home care or at a center through LifeCare for up to 25 days of free backup care. Employees also have access to a new childcare reimbursement program, and they can choose to use LifeCare or the childcare reimbursement or a combination of both, Hoverson says.

The advantage of the childcare reimbursement is it can be used to pay any caregiver—a neighbor, family member, or babysitter, Hoverson says. The company will reimburse employees up to $100 per day for children up to age 5, and up to $50 per day for children ages 6 through 11 or older for special-needs children, she says.

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“During the pandemic, childcare centers weren’t open, so we needed to be creative,” Hoverson says. “Many of our employees asked HR if they could pay a neighbor or family member to watch their children, so we created a solution that allowed them to obtain the childcare they need.” In 2020, employees used approximately 13,620 days of emergency backup care, and since July 31, 2021, they have used 6,750 emergency backup days, she says.

Offer subsidies to make childcare more affordable

Companies that can’t afford to give their employees vouchers or reimbursement could offer employees flexible spending accounts for childcare, allowing parents to save money in tax-free accounts to pay for childcare, Saujani suggests. “Money provides the flexibility for moms to solve their own childcare dilemma,” she says.

However, only about 43% of employees have access to a child-and-dependent-care flexible spending account, according to the Bureau of Labor Statistics. This benefit is more widely available to higher-compensated employees at larger establishments than to low-wage workers, according to the Bureau of Labor Statistics.

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Provide after school and summer camp support

Childcare needs don’t end when children start elementary school. Most working parents need help caring for their child after school and during the summer. Last summer, AXIS Capital turned to Outschool, an online platform that offers interactive classes for children ages 3 to 18, to help employees balance work and childcare when most summer camps were closed. AXIS Capital now offers Outschool as a year-round benefit to families with children ages 3 to 18, allowing them to access as many online courses as they want throughout the year, says Noreen McMullan, chief people officer. Class choices range from reading and math tutoring to fun activities, such as guitar lessons and video game design. Since last summer, more than 100 families have enrolled in more than 2,300 courses, McMullan says.