The provision of childcare support for small businesses as well as any businesses has evolved into a critical concern that parents and employers can no longer overlook. Harvard Business Review highlighted that, even prior to the pandemic, insufficient childcare led to working parents losing $37 billion in annual income, while employers suffered a $13 billion annual loss in productivity. For small business owners, offering childcare support isn’t just a cost-saving measure; it can also enhance talent attraction, employee retention, and give your company a competitive advantage in the industry.
There are several cost-effective ways to provide childcare support for small businesses, which we’ll explore below.
Offer flexible schedules and remote work
The most straightforward and immediately implementable change is to grant parents and caregivers the option to work remotely and with flexible schedules. Consider this: During the official 10-month school year, the average school is closed for 29 days. Coupled with summer vacations and the misalignment of school hours with the workday, these periodic closures can result in childcare gaps. “Just providing your workforce with the chance to work from home, adopt flexible work hours, and manage their children’s school drop-offs and pickups without negative consequences could significantly enhance employee retention for a company,” as stated by WeWork.
Subsidize child care costs
As reported by the Center for American Progress, the average monthly expenditure for infant care stands at $800 when opting for a home-based day care and $1,230 when choosing a child care center. For many families, this cost is prohibitively high. To address this issue, major corporations like Starbucks and Best Buy are introducing child care assistance as part of their employee benefits. Smaller businesses can emulate this approach by either subsidizing their employees’ child care expenses or negotiating discounted rates with local child care providers. This financial support can be disbursed as a one-time payment or integrated as a regular monthly stipend included with employees’ wages.
WeWork highlights that employers can provide up to $5,000 per child to employees without it being counted as taxable income for the recipient.
It’s worth noting that if you are subsidizing your employees’ child care costs, you may be eligible for the Employer-Provided Childcare Facilities and Services tax credit (Form 8882). This tax credit amounts to 10% of the expenses incurred to provide child care resources or referral services to employees, with an annual cap of $150,000.
Offer day care at work or backup child care
Many families reside in “child care deserts,” which are locations where daycare facilities or other child care options are simply nonexistent. Lack of child care options causes nine or more lost work hours each week, especially for families of color. Offering on-site childcare will allow your company to recoup that time.
According to Harvard Business Review, companies that band together to provide superior on-site or nearby childcare services for workers would benefit from more productive and devoted workers.
The money spent to set up an on-site childcare facility at your small business may also be eligible for the tax credit described above.
Alternatively, some businesses are exploring alternative solutions, such as investing in backup child care. This involves covering or subsidizing the expenses related to emergency child care in cases of illness or unforeseen child care disruptions. Services like WeeCare, Care.com, Bright Horizons, KinderCare, and UrbanSitter.com are available to provide backup care for your employees during urgent situations.
Integrate other family-oriented benefits
The term “child care” holds different meanings for different employees. Some prioritize the need for daycare services for their toddlers, while others require flexible scheduling to accommodate their teenagers’ extracurricular commitments.
When constructing your employee benefits package, it’s essential to take into account these diverse needs. Options like paid parental leave and adoption leave are straightforward choices. Offering discounts with a breast milk shipping company, such as Milk Stork and Milk Expressed, can be appealing to certain employees. Meanwhile, creating a workplace support group where parents can connect and exchange advice for dealing with adolescents’ mood swings may be appreciated by others. Seek policies that are inclusive and promote a healthy work-life balance for both parents and non-parents alike.
Bottom Line
SW HR Consulting has been helping companies to build their teams and values for over 10 years. Contact us to find out more about our unique hr outsourcing services and see how our expertise can benefit you.
