Child care has emerged as an important issue for both employers and employees in recent decades. Indeed, a mid-1990s U.S. Department of Labor study observed that, during that period,

"America has become a society in which everyone is expected to work—including women with young children. But many of society's institutions were designed during an era of male breadwinners and female homemakers. What is needed is a …reform of the institutions and policies that govern the workplace to ensure that women can participate fully in the economy and that men and women have the time and resources to invest in their children." Researchers, child care experts, and working parents have been heartened by the success that some businesses have experienced in their efforts to assist their employees in this area, but the consensus remains that many child care arrangements are inadequate for working parents. This problem is even more acute for single parents who do not have partners who can carry the childcare load in emergency situations. It is also more prevalent in certain industries; studies indicate that working women in professional occupations (typified by high levels of education and salary) are two or three times more likely to receive child care benefits from their employers than are women who work in service, production, and agricultural occupations.

Child care problems have repercussions for employers as well; analysts have pointed out that problems with child care can be a significant drain on worker productivity, and in some cases can even result in the permanent loss of valued employees. According to some experts, small businesses are particularly vulnerable to such losses, since they often do not have the financial resources to install the on-site child care centers that have proven beneficial to some larger companies in addressing this issue. But observers contend that small business enterprises have a variety of options at their disposal to help their employees deal with the child care issue.

Of course, the first priority for working parents is ensuring that their children are placed in a child care environment that protects them and attends to their physical and emotional needs. "Working parents may differ in family situations and child care needs, but they all immediately voice the same concern," confirmed Personnel contributor Bob Smith. "Parents want their children to be cared for in a safe environment, shielded from the potential dangers and abuses that the media often expose in graphic and horrifying detail. When parents believe their children are safe in another person's care, they feel a sense of relief, the lifting of a burden so prevalent among today's career mothers and fathers."

But Smith noted that while safety is the paramount issue in selecting a child care provider, "they also look at other tangible quality factors such as cleanliness, licensing, staff certification, and curriculum. But parental concerns go beyond the immediate classroom surroundings. Many parents said that they expected day care to be a practical learning experience for their youngsters." Unfortunately, the state of professional child care in the United States all too often leaves much to be desired. As David Whitman remarked in U.S. News & World Report, "the warped dynamic of the child-care market is all too plain: There are too many parents chasing too few day-care openings in settings where there is too much turnover of providers who receive too little training and pay." This state of affairs naturally serves to further exacerbate the concerns of working parents seeking to juggle home and office responsibilities.

INTERGENERATIONAL CARE Changing demographics in the United States have also created a situation wherein increasing numbers of working people find themselves dividing their time, energy, and financial resources between two sets of care demands. On one end lie small children, while on the other can be found elderly parents. This phenomenon has given rise to the still modest but growing success of socalled "intergenerational care" centers, in which working parents who also have obligations to care for their own elderly parents can place both categories of dependents in a single facility, where they will be cared for. Most experts expect that, given the continued rise in participation by women in the work place—and the track record of success enjoyed by intergenerational care programs in hospitals, nursing homes, and child care centers—the concept of intergenerational care will continue to increase in popularity in the business world. In fact, some studies indicate that demographic trends practically ensure the continued growth of intergenerational care facilities.

Given all of these considerations, observers believe that businesses looking to provide some measure of child care assistance to their employees will factor the elder care issue into their analysis of options with increasing frequency. "Companies that aren't doing anything at all probably could not envision doing on-site intergenerational care, or even elder care," admitted one executive—whose company opened an intergenerational care facility for its employees—in an interview with HR Focus. "But we're finding that companies that are either planning or thinking about on-site child care now are rethinking their space [to accommodate elder care in the future]."


Discussions of child care nearly always center on the desired benefits of such programs for working parents and their children. But some analysts believe that employers can also reap significant benefits from good child care arrangements. This accounts for the steady growth in the percentage of companies that offer some manner of child-care assistance to their employees. In 1999, for instance, Hewitt Associates conducted a survey of U.S. employers that indicated that 90 percent of respondents offer child-care assistance to workers.

This increase in child-care assistance can be directly traced to concerns that employees who are grappling with child care issues are less productive than those who are so unencumbered. These workers spend sometimes large amounts of company time on the issue (calling about possible providers, checking on the well-being of sick children, etc.), may fall victim to tardiness, and typically miss several days of work each year due to child care situations. Indeed, studies conducted in the early 1990s indicated that one out of three sick days taken by a working parent is actually due to child-related illnesses that preclude the child's presence at school or their usual day-care provider, and that other child-care problems can siphon off another seven or eight days of employee attendance on an annual basis.

Some businesses, meanwhile, allow parents to occasionally bring their children to work with them when child care plans fall through. In some business environments, this may not result in dramatic reductions in productivity, but in other settings—such as office environments—this can result in significant productivity downturns for both the parent (who has to divide his or her time between work and child supervision) and co-workers, who are often distracted by the presence of the youngster. Finally, some businesses permanently lose valuable workers who decide, after having a child, that the expense and hassles associated with day care make returning to the workplace a questionable strategy.

Given the above factors, many experts believe that small and large businesses alike should investigate ways in which they can help their employees secure acceptable child care arrangements. By doing so, they may well reap increased benefits in the realm of worker productivity. In addition, they are likely to find that having a program of child care assistance in place can be a tremendous boon in recruiting efforts, and that child care provisions can help companies retain employees who might otherwise stay at home or leave for a competitor that offers meaningful child care benefits.

Finally, companies may find that providing child care programs to workers is not nearly as expensive as they believed, since the provision of child care assistance is tax-deductible to employers. "From a company standpoint, assisting your employees with their child care needs is good business," summarized Smith. "Child care saves a company more money than any other employee benefit. It allows a company to recruit employees more effectively, improves turnover, reduces absenteeism, and increases the productivity of employees."


Prior to settling on a methodology by which to help working parents in their employ, businesses should first do some research to learn which alternatives will do the best job of meeting the needs of both the company and its workers. HR Focus contributor Karen Matthes wrote that before doing anything else, "employers should take a close look at their organizations and determine what their corporate goals are, what type of corporate culture exists, and how much money they're willing to spend." A child care plan that does not adequately integrate these considerations will almost certainly perform inadequately or fail. In addition, small business owners should make sure that child care is a pressing issue before investing time and money into finding solutions for it. "Make sure that you have a problem in the first place," wrote Dayton Fandray in Workforce. "And if you find that a problem exists, measures its dimensions in terms that you can quantify—before you try to fix it."

Employers should consider disseminating a questionnaire or find some other means of assessing the needs and desires of their work force. In addition, business owners and managers should take a good look at the demographic make-up of their employee roster. After all, a company that employs relatively few people under the age of 40 is far less likely to need a comprehensive child care assistance plan that is a business that employs large numbers of women under the age of 35. "Ask how many would be involved in some kind of child care arrangement, the ages of their children and their current arrangements for having those children taken care of," one management consultant told Nation's Business. Employee impressions of various child care options and the amounts they are willing to contribute to employer-assisted child care programs should also be solicited.

From there, said Matthes, businesses should investigate the community in which they operate: "Companies should check out what programs the surrounding communities already have to offer, as well as determine both the resources and barriers to starting new ones." As one executive told HR Focus, "It doesn't make sense to reinvent the wheel. If there's already really good existing services in the community, take advantage of them or subsidize them. Work with the community to build the infrastructure." Finally, companies should try to find ways to accurately evaluate return on investment in their child care policies. This return on investment can take many forms, from increased loyalty and productivity to growth in employee retention rates.


In the past, business enterprises have associated child care almost exclusively in terms of on-site centers, which have been viewed as excessively expensive to build and operate. But proponents of such facilities contend that those opinions are based partly on misconceptions. In addition, child care experts and business consultants alike point to several other options that may be viable for employers, including those of small size. These options include company consortiums, outside referral services, salary reduction plans, and reimbursement plans.

ON-SITE FACILITIES Providing on-site child care facilities is the most expensive option for businesses. It requires significant up-front costs and in some cases increased operating costs in such areas as payroll (states have various guidelines on the necessary qualifications of day care facility managers/professionals, which may necessitate hiring new personnel), utilities, and liability insurance (although companies in some areas may be able to avoid increases in this area). But this option also usually provides the greatest peace of mind to employees, who can visit their children during lunch breaks, etc., and dramatically reduces logistics complications that workers face with off-site facilities (routine drop-offs and pick-ups, picking up kids who are sick, etc.). Moreover, the presence of an on-site day care facility is a terrific attraction to prospective employees. And as mentioned above, the expense of establishing an on-site facility can be deducted from taxes. Understandably, however, most of these types of arrangements have been established by larger companies with healthy bottom lines rather than smaller businesses with more modest assets.

CONSORTIUMS Consortiums are among the most popular child care alternatives for small businesses with limited resources that nonetheless want to assist their workers in securing good care for their youngsters.

In these programs, several small companies in a geographic region pool their resources to support an off-site day-care center that is operated by a qualified day-care provider. By combining resources, companies can realize significant cost savings while also meeting the child care needs of their employees. They simply pay for a certain number of slots and make the openings available to their employees (unused slots are usually made available to parents who are employed outside the consortium).

OUTSIDE REFERRALS Companies that pursue this option contract with an outside agency to provide their employees with community day care information. This information includes rates, locations, and openings at various licensed facilities. This "information clearinghouse" approach is obviously the least expensive option for businesses, but it may also be the least satisfactory for parents who must still research these various options.


A favorite of business owners, who like its minimal expense, salary reduction plans call for the establishment of a flexible spending account that permits employees to reduce their pre-tax incomes by a specified amount and place that money in an account that is used to reimburse them for child care expenses. Reimbursement plans, meanwhile, call for tax-deductible payments that are either paid directly to the child care provider or to the working parents by the company.

In addition to these child-care assistance options, business owners can institute other policies that can have a beneficial impact on their employees' ability to balance work and family responsibilities. Flextime, job sharing, work-at-home options, and extended maternity or paternal leaves have all been touted as policies that can be helpful to working parents.


In recent years, American companies have discovered that new child-care (and other family-oriented) policies for working parents have not been universally embraced by their employees. Certainly, these sorts of programs have been applauded by workers who benefit from them, and they are increasingly popular in virtually every industry. But some single and childless employees have expressed resentment over this state of affairs. In fact, a 1996 Confederence Board survey of companies with "family-friendly" policies in child care, etc., reported that 56 percent of the companies admitted that childless employees feel resentment about perceived bias in favor of employees with children.

This point of view should not be ignored by small business owners, because it can negatively impact morale just as surely as perceptions that their company is not family-friendly. And the majority of the work force is actually comprised of single or childless employees who do not benefit from child care packages. As Forbes reported in 1999, more than 60 percent of America's labor force have no children under the age of 18, and women with children under the age of 6 represent only 8 percent of the labor force (of course the percentage of parents —men and women—in the labor force with children under the age of 6 is much higher).

The primary complaint of these single/childless employees is that they are expected to work longer hours and accept lower levels of compensation (in the form of fringe benefits) than co-workers with children. As Dan Seligman explained in Forbes, "The tales are of singles who have plans for the evening but are expected to alter them and cover for the mother whose child has a temperature, and are expected not to ask for the prime-time summer vacation slots, and don't benefit from day care centers, and take it for granted that th emoney invested in the centers is ultimately coming out of their own pockets."


Allen, Eugenie. "Home Sick No More: When Mom and Dad Simply Have to Be at Work, Where Do Their Sick Children Spend the Day?" Time. April 24, 2000.

Fandray, Dayton. "What is Work/Life Worth?" Workforce. May 2000.

"Few Employers Provide Direct Childcare Help." IRS Employment Trends. September 15, 1997.

Leveen-Sher, Margery. "Flexibility is the Key to Small Business Benefits." Washington Business Journal. February 16,1996.

Matthes, Karen. "A Coming of Age for Intergenerational Care." HR Focus. June 1993.

Reece, Barry L., and Rhonda Brandt. Effective Human Relations in Organizations. Boston: Houghton Mifflin, 1993.

Seligman, Dan. "Who Needs Family-Friendly Companies?" Forbes. January 11, 1999.

Smith, Bob. "On the Outside Looking In: What Parents Want From Childcare." Personnel. September 1991.

Vaeth, Elizabeth. "Child Care Presents Challenge, Expense for Working Parents." Atlanta Business Chronicle. September 6,1996.

Whitman, David. "Waiting for Mary Poppins." U.S. News & World Report. November 24, 1997.

SEE ALSO: Career and Family ; Flexible Spending Accounts

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