Managing the cost of care is a problem many working parents face, and when working families struggle with work-life issues it can be a problem for their employers as well.
When nearly 70 percent of employees say the cost of care influences their career decisions, it’s in a company’s best interest to help their employees manage these costs and to understand that employees’ lives outside of work impact performance in the office.
“We are a nation of working caregivers,” says Anne Weisberg, senior vice president of the Families and Work Institute. “Most households with kids have all adults working outside the home. If you want your people to be fully engaged at work, then you need to understand that for them doing that means not having to worry about what’s going on at home.”
Just how expensive is care? Care.com’s 2015 Cost of Care Survey found 28 percent of families pay more than $20,000 annually for childcare. Employers today are realizing that helping employees manage the cost of care is an investment in protecting their own bottom line. Here’s a look at seven employee benefits that can help employees cope with the cost of care.
- Dependent Care Assistance Programs
Dependent Care Assistance Programs (DCAPs) allow employees to deduct dependent care expenses from their paychecks on a pre-tax basis and provides reimbursements for up to $2,500 annually (for married couples the annual amount is $5,000) for the cost of care. Employers have to work with a third party on DCAPs, so there is a small processing fee. But it’s a relatively small investment for employers to pass on a meaningful savings to working parents.
- Child Care Resource and Referral
Whether it’s finding long term child care or helping parents in a pinch, supporting employees through a child care resource and referral service, like those offered through Care@Work, can help reduce costs by providing parents with a range of options to meet their unique care needs.
- Flexible Schedules
Allowing some flexibility in their schedules can be a low-cost or no-cost way to help limit child care costs for families. Take parents of school-aged children, for example. These working moms and dads often have to find caregivers for a few hours in the morning before school and in the afternoons during the week. This adds up – parents pay an average of $196.80 for weekly after-school care, according to the Cost of Care survey. But if these parents were able to shift their schedules to make their work fit around life, rather than life fitting around work, it could save thousands over the course of a year.
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- Child Care Subsidies
In the current landscape of work-life benefits, employers are eight times more likely to offer scholarships or tuition assistance than they are to offer child care subsidies. But when child care is more expensive than college tuition in most states, those subsidies – when they are offered – can really take the sting out of the largest household expense for many families. Ditto for discount plans for employees utilizing company-partnered child care facilities, where those are available.
- Flexible Spending Accounts
FSAs allow employees to set aside pre-tax dollars to pay for not only eligible out of pocket healthcare expenses, but also work-related day care expenses. These expenses not only include day care but also include also include before- and after-school care programs, preschool and summer day camp. FSAs can help families save up to $2,000 per year on child care expenses, yet many employees don’t realize they can be used to offset the cost of care.
- Back Up Child Care Assistance
Finding back up childcare when school is closed, an employee’s child – or their nanny – is sick can certainly be difficult on a working parent … not to mention expensive. More and more companies are realizing that helping employees fill these emergency care gaps can reduce absenteeism, presenteeism and other productivity-draining distractions. And, of course, from the employee’s perspective, having employer-subsidized backup care is cheaper than having to pay for a week at a child care center during school vacation and certainly it’s better than losing a day’s wages if missing work were the only option.
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- Onsite Child Care Centers
While onsite child care centers aren’t always an option for companies – and in fact companies are increasingly moving away from the brick-and-mortar model – some still offer this center-based benefit for employees. While they provide a solution for some employees, center-based models are often constrained by space and admissions quotas.
HR Leaders Also Read:
- What to Look for in a Backup Care Program
- 9 Ways Child Care Costs Impact Working Parents' Careers
- 15 Times When Working Parents Need Backup Care
- 15 Companies with Work-Life Benefits Your Employees are Dreaming About
- How Work-Life Benefits Impact Employee Performance