Human Resources: Executive Summary: Caring for Children

Escalating childcare costs - along with intensified work schedules driven by global competition - are among the most pressing issues facing working parents today. In this context, smart business planners recognize that quality childcare and work/life benefits not only stoke the productivity of working parents in the short term but they also represent an investment in the development of children, who constitute our future workforce.

The value of childcare perks to business productivity is evident from a study cited in the Harvard Business Review. More than 50% of 178 employers polled said on-site childcare services resulted in a 20% to 30% reduction in staff absenteeism. Though many U.S. firms remain reluctant to take on the financial and legal risks associated with on-site daycare centers, the 2006 SHRM Benefits Report reveals gradual increases in corporate willingness to answer key childcare needs. Some 57% of companies polled now offer flextime benefits, while emergency/sick-child-care benefits doubled since 2003, from 7% to 14%, and prenatal programs skyrocketed to 82% from 25% in 2005.

As they hone work/life strategies, companies will want to stay informed of broader childcare issues. Formal childcare enrollments in the U.S. have risen over the last decade, as more single mothers enter the workforce and the number of dual-income families continues to expand. The National Child Care Information Center reports that for every 10 children in the U.S. under the age of five with employed mothers, three are enrolled in some type of private or public center-based care, including before- and after-school programs. Working parents worry about the impact on their children of time spent in day care, which studies have linked to behavioral problems and child obesity.

Spiking childcare costs and increased time spent looking for quality childcare services have become major hurdles for middle-income working parents - and a crisis for poor families. A Runszheimer International survey showed an average 6.4% hike in childcare costs throughout 75 cities, with a 3%-to-5% rate increase in 2002 alone. Other studies show that average childcare costs now meet or exceed the cost of sending a student to a public university, becoming the second-largest expense for households with young children, after rents and mortgages.

The U.S. Census Bureau reports that single mothers with children under the age of five pay out almost double the share of family income for child care that married mothers pay. But analysts insist full childcare subsidies can increase work availability for poor and low-income mothers - including those moving out of welfare - by as much as 15%.

The growing demand for high-quality preschool education, along with attendant salary requirements and credentialing fees for teachers, is bound to push childcare costs even higher, effectively shutting down preschool enrollments for children in disadvantaged populations. The resulting deficits in high school completions, skill development and workforce participation, analysts predict, will have a significant impact on national productivity and the replenishment of skilled labor pools. Most affected will be the growing numbers of children of color, as well as those in immigrant families and foster care. Whether universal preschool, currently a topic of heated political debate, will eventually close the "opportunity gap" remains an unsettled question.

As business investment in childcare issues evolves, some firms are banking on the idea that partnerships with schools, health organizations and an array of social initiatives can make a difference. By helping protect, grow and channel young talent, many companies hope to ensure robust skilled labor pools well into the future.

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The Institute for Corporate Productivity (i4cp, inc.) improves corporate productivity through a combination of research, community, tools and technology focused on the management of human capital. With more than 100 leading organizations as members, including many of the best-known companies in the world, i4cp draws upon one of the industry’s largest and most-experienced research teams and Executives-in-Residence to produce more than 10,000 pages annually of rapid, reliable and respected research and analysis surrounding all facets of the management of people in organizations. Additionally, i4cp identifies and analyzes the upcoming major issues and future trends that are expected to influence workforce productivity and provides member clients with tools and technology to execute leading-edge strategies and "next" practices on these issues and trends. i4cp is a for-profit company with offices in St. Petersburg, Florida.