As Child Care Challenges Threaten the American Workforce, Business...

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As Child Care Challenges Threaten the American Workforce, Business Leaders Call for Action

By David Tobenkin     Jul 26, 2022

As Child Care Challenges Threaten the American Workforce, Business Leaders Call for Action

Many business leaders are asserting that a lack of child care solutions for American employees is a key business challenge that’s threatening the workforce and limiting U.S. businesses’ bottom line performance. Many are also taking action to address child care challenges at their organizations and nationally, after the pandemic brought greater attention and awareness to the issue.

In May, Indra Nooyi, former CEO of PepsiCo, called for increased child care solutions at Child Care Aware of America’s 2022 Symposium in Arlington, Virginia. “The way we accommodate child care, and time for our loved ones, is both the greatest challenge and the greatest economic opportunity of our time,” Nooyi said, adding that it is a core challenge for employers. “Now, in the arch war for talent—particularly in today’s tight labor market—smart employers can no longer ignore this issue… On-site and near-site child care for working parents is a game changer. We did it at PepsiCo, and the benefits were immediate and lasting.”

Also in May, Marshall Plan for Moms, a non-profit organization focused on women’s economic empowerment and promoting public and private sector policies that support mothers, organized a national business coalition for child care with the aim of expanding child care support for employees. Among the signatories were large companies that included Athletes Unlimited, Care.com, Patagonia and Synchrony. Coalition members have expressed an interest in pursuing solutions that equitably provide child care supports for employees such as increasing transparency by sharing their child care policies, data and best practices, and speaking out publicly on the importance of child care to U.S. economic health and competitiveness, noted Reshma Saujani, founder and CEO of Marshall Plan for Moms in an interview.

“It’s no secret that the pandemic disproportionately and adversely affected women and their ability to succeed in the workforce,” says Carol Juel, executive vice president and chief technology and operating officer at Synchrony, a consumer financial services company that has more than 18,000 employees. “At Synchrony, 60 percent of our workforce are women. We believe offering flexibility, child care support and progressive benefits will help us win the war for talent; drive equity, diversity and inclusion in our workforce; and ultimately drive strong business results.”

Synchrony has conducted listening sessions and surveys with employees at all levels, including call center employees, to find out pressing child care needs. That has led the company to expand its child care benefits. Synchrony, for example, now offers 60 days of backup child care, up from 10 days of backup care prior to the pandemic, says Angie Hu, vice president of corporate communication and public relations. Synchrony also offers virtual summer activities and online learning for the children of employees, flexibility in hours and the opportunity to work from home. Virtual summer camp was also born out of pandemic, created in response to summer camp and child care center closures, Hu adds.

Marshall Plan for Moms also released a new report in May, with McKinsey & Co., on the impact of the U.S. child care support system on employees and workers, which found that expanded child care benefits could further companies' efforts to attract, retain and advance women and help bring women back to work, following their exodus from the labor force during the COVID-19 pandemic. An accompanying survey of more than 1,000 parents found that 69 percent of women with children under age 5 would be more likely to choose an employer that offered on-site child care or benefits to help pay for child care, and 83 percent reported that child care benefits would be an important factor in deciding whether to stay with their current employer or make a move.

The report also offered a four-step process by which businesses can create their own child care benefits and five solution areas for companies to help improve child care options. It noted the benefits most in demand by women with children aged 0-5 seeking a job include flexible working arrangements, predictable work hours and scheduling and assistance with the financial cost of child care.

Solution areas include subsidies for child care costs, on-site care, flexible hours and working arrangements, predictable work schedules and conducting a child care census to understand employee needs and ensure quality.

Business leader associations and advocacy groups are also pushing for child care solutions. In September 2021, 52 existing and former CEOs who are members of a non-profit business leader member organization, ReadyNation, a component of the larger non-profit Council for a Strong America, sent a letter to Congress calling for it to pass legislation to increase federal support for child care, including grants, flexibility to use existing resources, child care incentives and tax credits. Among them were current and former business leaders at Pizza Hut, Yahoo!, Park Hotels & Resorts, Kaiser Permanente, Cessna Aircraft Co., Xerox and Macy’s.

The letter reflected the sentiment of a much larger group, says Barry Ford, president and CEO of Council for a Strong America.

“ReadyNation is a group of more than 2,400 business leaders all over the country, who have said, by joining us, that investments in early childhood supports are really important,” says Ford.

A 2019 ReadyNation study on the child care crisis found an annual economic cost of $57 billion in lost earnings, productivity and revenue as a result of the infant-and-toddler child care crisis. The report’s accompanying survey of 812 working parents with children under age 3 found that 86 percent of primary caregivers said securing child care hurt their efforts or time commitment at work.

“Even larger companies that do offer child care on premises or subsidies to support their employees are finding that no care is available because child care facilities shut down in droves during the pandemic,” Ford notes in an interview. “We think child care is a business model that can only work with substantial public investment and so we are asking our business members to be advocates of public investment in this space.”

One of the signatories to the ReadyNation letter to Congress, Hugh Welsh, president and general counsel of DSM North America, the North American subsidiary of a Netherlands-based health, wellness and bioscience company, says his sense is that support by business leaders for action to improve child care delivery across the country is increasing.

“I think awareness is increasing quickly as one million women have left the workforce since the onset of the pandemic, many because of child care challenges – businesses are dealing with the labor shortage as a consequence,” says Welsh, who is co-chair of the ReadyNation CEO Task Force.

Members of local and regional Chambers of Commerce across the country are also addressing the child care issue, says Aaron Merchen, director of policy and programs at the U.S. Chamber of Commerce Foundation's Center for Education and Workforce.

“Child care is an essential component to a competitive workforce,” Merchen notes. “And we've seen in the last two years, especially during the pandemic, that it's really become a top priority for business leaders, chambers, policymakers, and obviously, working parents, because child care was a sector in an industry already operating on razor-thin margins. There were already issues within the structure of the sector and so when the pandemic came, that really exacerbated and highlighted a lot of those issues. And so what we're seeing is from small employers all the way to CEOs of multinational corporations is a realization that we can't really have a full recovery without fortifying and strengthening the child care sector.”

In March, the foundation released a roadmap for employers on how they can approach assisting their employees with child care, Merchen notes. “It's not necessarily policy recommendations because the policy that works in Pittsburgh may not work in rural Arizona, but we have found that there are supports and benefits that individual employers can offer that can help support their working parents, and we leave that to those employers to figure out which supports would benefit their employees the most by talking to their employees and by looking at how much they can contribute to child care benefits,” Merchen says.

In addition to the momentum among companies, some states are also leaning in. In April, Maine joined Best Place for Working Parents, a growing national partnership that assists employers of all sizes with assessing, identifying, and adopting family-friendly policies, and earning recognition for their efforts.

Through the partnership, Maine businesses can access tools to evaluate their organization’s support for working parents against regional and national assessments of businesses of similar size and in similar industries. Through an online confidential assessment, businesses can determine whether their organization qualifies to earn a designation as a “Best Place for Working Parents,” or actions they could take to do so.

While approaches differ, many businesses are increasingly realizing that while they cannot bear the entire child care burden themselves, failure to intervene in some way likely will mean that many of their employees will fail to secure child care solutions, which will impact their bottom lines.

 

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