In an effort to combat staffing problems and reduce turnover rates, a growing number of businesses in high-turnover industries are turning to child care services as a solution. Companies such as Red Rooster Coffee, United Parcel Service (UPS), Home Depot, Patagonia, and Marriott have recognized the value of offering subsidized child care to their employees.

Zach Wiley, a former employee at Red Rooster Coffee, left his job due to the long commute from Roanoke, Virginia. However, less than a year later, he returned after the company introduced subsidized on-site child care. The availability of affordable child care sealed the deal for Wiley, who now pays only $2 per hour for his toddler son and infant daughter's daycare. Not only does he appreciate the convenience of having his children nearby, but the child care facility has also provided him with peace of mind knowing that his son is in good hands.

According to a survey conducted by the Society for Human Resource Management, 32% of companies surveyed in 2023 reported offering backup child care, a significant increase from 26% in 2019. This increase reflects a growing recognition by businesses that providing child care services can help reduce churn and the costs associated with searching for and retraining replacements.

Child care has long been an issue for working parents in America, particularly since the surge of women entering the labor force in the second half of the 20th century. The COVID-19 pandemic has further exacerbated child care concerns, leading to disruptions in staffing. The labor-force participation rate in March 2023 was 0.6 percentage points below the prepandemic level in February 2020.

UPS, with approximately 414,000 employees across the United States, introduced backup child-care services for its evening-shift workers in a California sorting facility during the pandemic. The program has since expanded to two other facilities in Ohio and Pennsylvania. Employees like Danielle McQueen, who works evening shifts auditing parcel sizes, have found the backup child care services to be invaluable. It has allowed them to continue working when their usual child care arrangements fall through.

The implementation of child care services has proven beneficial for companies like UPS, as it has led to reduced absenteeism and a lower employee turnover rate. Danelle McCusker, president of UPS's human-resources group, highlighted that the program also helps counter the stigma associated with parental absences due to child care responsibilities.

While the cost of subsidizing child care services may concern some businesses, the benefits of reduced turnover and improved employee satisfaction outweigh the expenses. Implementing on-site child care facilities does come with its own challenges, such as licensing and finding qualified staff. Additionally, companies with a nationwide workforce must navigate varying state and local regulations.

Unlike in many developed economies where child care is subsidized, the United States largely leaves the responsibility in the hands of employees and, increasingly, businesses. In 2019, the U.S. government contributed only $900 per toddler toward care, compared to $9,000 in France and $16,100 in Sweden, according to the Organization for Economic Cooperation and Development (OECD). Economists and experts argue that government investment in child care is crucial to address the ongoing challenges faced by working parents in the United States.

Recognizing the importance of affordable child care, the Biden administration has taken steps to encourage businesses to provide such benefits. Under the Chips Act, semiconductor businesses applying for federal loans are expected to outline plans for affordable child care for their workers. The administration has also called for increased federal funding to expand access to free preschool.

Red Rooster Coffee began offering subsidized child care services in 2018, recognizing the needs of its growing number of employees who were starting families. Owner Haden Polseno-Hensley took the initiative to set up an on-site child-care facility, subsidizing 70% of the operating costs. Having an on-site child care facility has proven to be an investment in the staff, benefiting both the employees and the company.

While access to child-care benefits remains limited across the United States, there has been a gradual increase, with 12% of U.S. workers having access to such benefits in 2023, up from 10% a decade earlier, according to the Labor Department. The rising cost of child care is often cited as a reason for workers opting to stay on the sidelines. Bank of America Institute reports that the average child-care payment per household has risen by over 30% since 2019, putting a strain on parents' finances.

The growing trend of companies offering child care services demonstrates the significance of addressing child care concerns in the workplace. As businesses recognize the positive impact on employee retention and productivity, the provision of affordable child care is likely to continue gaining momentum as an essential employee benefit in today's workforce.