CEOs doubt the ROI of childcare benefits — how can HR change their minds?

Ever-rising childcare costs and shortages of options put a major strain on today’s working parents — especially as they’re being asked to work from the office more days a week. HR professionals know this, but other executives aren’t as acutely aware, according to a new report.
Nearly 80% of CHROs have struggled to convince the C-Suite to expand employer-sponsored childcare benefits and the potential return on investment, according to a small survey from Kindercare conducted by the Harris Poll, including responses from 152 CHROs, CPOs and vps.
Some 80% of CHROs stress that childcare benefits help reduce turnover and better attract new talent while also boosting productivity, key challenges they are tasked with handling. But they’re up against budget constraints and ultimately a lack of clarity about employees’ situations to effectively convey the need to company executives.
“As HR leaders, we’ve figured out how to story tell around the importance of healthcare benefits to support, attract and retain talent and ultimately, drive the business forward. We now need to apply that approach to truly showcase the importance of employer-sponsored child care benefits,” said Jessica Harrah, CPO at KinderCare.
Ultimately, nearly all Fortune 500 companies offer some form of childcare benefits, ranging from subsidies to back-up care options to on-site childcare offerings, according to the report. And as roughly 90% of HR leaders plan to expand their child care offerings in the next five years, they’ll need to strengthen their arguments to get staff a better range of needed support.
Talent retention and attraction
One key argument is around talent attraction and retention. Some 60% of working parents believe their employer should offset childcare costs, and about the same share said they consider childcare among the top three reasons to stay at their current job, just behind healthcare and paid time off benefits, the report found. Offering an array of benefits can be a competitive advantage for employers seeking to hire top talent.
A 2024 report from Boston Consulting Group analyzed five companies offering childcare benefits — Etsy, Fast Retailing, Steamboat Ski Resort, Synchrony, and UPS. All saw a positive return on investment — ranging from 90% to as high at 425%. Those ROI gains occurred among both salaried and hourly workers, that report found.
“You’re losing a viable part of your workforce when you don’t offer these benefits,” said Priya Krishnan, chief digital and transformation officer at Bright Horizons, a major operator of child care services for employers
Productivity
When working parents have reliable childcare, they are far less likely to miss work, arrive late or depart early, or deal with scheduling changes and conflicts. That results in increased productivity and fewer disruptions to workflows. Those surveyed in the BCG report said they avoided up to 13 work absences a year when they didn’t have to juggle childcare disruptions.
Oftentimes, schools will have holidays while companies do not give workers those days off. Ensuring back-up care options exist to help working parents though that is an emerging area of interest. Last summer when schools were closed, Bright Horizons hosted a pop-up summer camp for employees’ children to attend, as one example.
Making the argument
One way to gain more clarity around staff needs and provide actionable insights for the C-Suite is through internal surveys. On those surveys, staff can confirm whether they are a caretaker, lending CHROs stronger evidence about the needs of their employee population.
Tying the need for benefits to RTO plans is also a way to make the issue more pertinent. Beyond subsidies and backup care offerings, some employers like Walmart have rolled out on-site childcare options for staff as they return to offices. Walmart recently opened a massive childcare facility at its headquarters in Bentoville, Arkansas, that accommodates over 500 children, from infancy to pre-K.
One key reason for building the center was an internal survey. When Walmart unveiled plans for the new campus in 2020, on-site childcare was number one on the list of requested amenities from staff.
Another effective way to make the case for expanding benefits is to present results from existing benefits, Krishnan added.