Employers are desperate to hold onto working parents and they’re building more childcare centers in the office

The U.S. is in the midst of an ongoing childcare crisis as costs continue to skyrocket. Many working parents, especially mothers, face pressure to leave the workforce or scale back to part-time positions to take care of their family. In an attempt to attract and retain employees with children, more employers are now offering benefits including flexible work arrangements and backup or emergency care support. 

And although it’s still an uncommon benefit, some employers are also providing on-site childcare to eligible employees. Around 13.02% of all businesses affiliated with Best Place for Working Parents, a business network aimed at supporting companies and caregivers, had an on-site childcare policy in 2023—a 47% increase since 2019, according to new research based on input from more than 2,000 companies. Businesses join the network after earning a “best place for working parents” designation.

Currently, large businesses employing 1,000 or more workers are most likely to offer onsite child care, with 15.8% doing so, according to the study. But so-called “micro businesses” with one to 24 workers were second most likely, followed by 10.02% of small businesses employing 25 to 200 workers, and 7.58% of medium-sized businesses with 201 to 999 employees. The top two sectors with business most likely to offer in-house care services were education, as well as agriculture, forestry and wildlife.  

“It’s exciting to see employers across the country leaning into onsite childcare,” says Sadie Funk, national director at Best Place for Working Parents. “We see a variety of industries leaning in, and…showing that it can be available for everyone.”

While opening a care center can be costly—startup rates for an independent center accommodating 76 children typically cost $95,000, according to childcare management software provider Procare—employers can access government funding to do so, including the Federal employer-provided childcare credit which gives companies a tax credit of up to $150,000 annually to cover qualified costs related to operating a childcare facility.

Businesses offering on-site childcare have seen an impressive improvement in employee engagement and attrition rates. A previous Best Place for Working Parents report found that companies offering on-site care saw 7.4 times higher worker retention rates and 8.9 times more loyal employees. 

But opening an on-site care center isn’t the only option available to employers who want to support working parents, Funk says, noting that 75% of all U.S. employees have some form of caretaking responsibilities, including for their children or parents. Working parents-friendly benefits, including flexible work arrangements like remote work or the ability to make hourly schedule accommodations, and parental leave are also ways that companies can hold onto workers with care responsibilities.

“Whether that means [employees are] caring for the young children, or maybe their aging parents, this is such a critical role in thinking about: How do we offer a wider range of options for parents that supports their ability to really bring their whole selves to work and still have enough to bring their whole selves home?” says Funk.

Paige McGlauflin
paige.mcglauflin@fortune.com
@paidion

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