4 Childcare Benefits to Help Your Employees Save Money
January 14, 2020
Childcare costs are on the rise, no matter where your working parents turn for help. The average childcare center costs 14.5 percent more than it did five years ago. The average price for a nanny is up 26 percent. What about an after-school baby sitter? That costs has increased a whopping 34 percent since 2014.
The burden of childcare costs can force new parents to consider career changes that they wouldn’t otherwise consider. Over three-fifths of expecting parents say that childcare costs have influenced their career decisions, and one-third said they’ve changed jobs because of them. Fortunately, you can help! Here are four childcare benefits you can offer to boost retention and help your employees save.
Employees prefer tangible cost-saving benefits over ones that simply provide a fun work atmosphere, with one survey showing that they would rather have parental leave and good health insurance than on-site games and free food. To cater to your employees looking to start a family, join the two-fifths of employers who offer paid parental leave. It’s a trending benefit because more and more states are passing laws that require parental leave and because research shows that employers save money by providing it (which helps spare them the cost of finding and hiring new employees).
Some employers also provide fertility benefits, such as covering costs for in-vitro fertilization, fertility medications and genetic testing related to infertility issues.
Dependent Care FSA
One-fifth of employers are offering more generous health-related benefits than they did a year ago. That’s not surprising when you consider recruiting has become increasingly competitive due to historically low unemployment.
Flexible Spending Accounts (FSAs) remain a staple of employers’ health-related benefits. And there’s one type of FSA that’s tailored to the needs of parents who have childcare costs. Dependent Care FSA participants can save 30 percent or more on eligible expenses, which include eligible daycare expenses for children up to age 13 or a disabled spouse or dependent of any age. And our employers save (on average) $260 in FICA tax savings per Dependent Care FSA enrollment because contributions are made pre-tax, which reduces your FICA tax burden.
Three-quarters of millennial employees (whether they’re young parents or not) are in search of more flexible work arrangements. But, for the employees who are young parents, there are real savings benefits to flexible scheduling. For example, parents of school-aged children probably need to find before-school and after-school care in order to work the typical 8-to-5 schedule. On average, parents pay nearly $200 for weekly after-school care alone.
Due to these costs, some employers give their employees the flexibility of setting their own schedules or working from home when possible, which helps them fill the gaps created before and after school. If your workplace is one that requires employees to be on-site, make work schedules more predictable for your working parents and avoid meetings early in the morning or late in the afternoon.
If your employees can’t be home with their children while on the clock, consider bringing their children to your workplace! Roughly 4 to 8 percent of companies offer on-site childcare, and nearly one-fifth of Fortune 100 companies now provide it. Providing this option removes one of the biggest financial burdens for your working parents. And there is a tax credit available that lets you save up to 25 percent of facility expenditures.
Would you like to learn more about how you and your employees can save with an FSA? Complete the form below to get your free guide!