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The Benefits of Employer-Sponsored Child Care Benefits

The Benefits of Employer-Sponsored Child Care Benefits

Employee Benefit Plan Review

October 07, 2009

Employers with a nationwide, distributed workforce look for programs that offer equitable benefits to employees across the country.


Child care clearly benefits working parents. However, evidence is growing that this benefit’s advantages reach beyond working parents, and impact the organization and all of its employees.

Benefits to an employer’s entire employee population were studied by Bowdoin College professors Rachel Connelly and Deborah DeGraff in collaboration with a University of North Carolina professor Rachel Willis. Their study found that firms offering on-site child care saved between one-half and twice the cost of what they paid to maintain the benefit – including subsidies to employees and other costs – and this amount is on top of any savings realized through reduced turnover or increased productivity.

Other statistics over the years support the common claim that child care programs for employees pay off for the sponsoring organization in reducing turnover, reducing absenteeism, and improving morale:

    • According to the National Child Care Information Center, organizations that offer child care often top the lists of “Best Places to Work.” This benefit demonstrates a commitment to employees and leadership in the community, resulting in enhanced morale and company image, as well as an ability to attract new talent. In one survey, 85 percent of employers that offered child care programs reported more positive public relations.
    • In 2006, unscheduled absenteeism climbed to its highest level since 1999, costing some large employers an estimated $850,000 per year in direct payroll costs, and even more when lost productivity, morale, and temporary labor costs were considered. “Family issues” account for 22 percent of these unscheduled absences, according to the 2006 and 2007 Unscheduled Absenteeism Surveys by CCH Incorporated.
    • Research has also shown a child care center could save a business as much as $500,000 annually in turnover costs – 10 retained workers at $50,000 per worker.


Child care benefits are becoming more enticing as many corporations evaluate their social responsibilities to improve their communities. Studies have shown that children who attend quality preschool are more likely to graduate from high school, less likely to end up in jail, and are more likely to pursue advanced education, providing employers with a more highly-qualified workforce.

Poll: How do you feel about crying at work?

Poll: How do you feel about crying at work?