On Sept. 30, federal funding that had been allocated to US childcare providers during the Covid-19 pandemic expired.
The end of these funds—which totaled close to $24 billion—is expected to negatively affect both childcare providers and the Americans who have relied on their services. Some 70,000 childcare programs are expected to close as the US reaches this “childcare cliff,” according to an estimate from The Century Foundation. As a result, it is anticipated that some working parents will cut down on their hours or drop out of the workforce altogether.
The cliff poses a threat to gains made by working women during the pandemic; about 70% of mothers with children under the age of five are now in the labor force, five percentage points higher than the decade prior to Covid-19.
Sadie Funk, the director of the Best Place For Working Parents, offered tips for HR pros to support employees likely to be affected by this cutoff.
Assess and respond to workers’ needs. Funk’s organization is a network of businesses and regions that advocate for research-based strategies to support working parents. In light of the cutoff of these pandemic-era funds, she recommended that HR first survey employees to assess their childcare needs, if they haven’t already.
“Once you’ve heard from your employees about whether or not childcare is an important issue for them, you can start to think through strategies,” Funk said.
She recommended HR departments consider the following to alleviate childcare concerns among their workforce:
Flexibility and predictability. Funk noted that a lack of flexibility can drive working mothers out of the workforce. And flexibility can take different forms: In addition to allowing for remote work, employers can be open to later arrivals or early dismissals for working parents dealing with school pickups and drop-offs.
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She added that predictability is key for workers “to be able to plan out their childcare needs, whether that be at a center, at home, or even with a family member.” This is particularly true for employees in industries like hospitality and manufacturing, whose roles are less compatible with remote-work arrangements.
A range of benefits. There are a number of different benefits employers can consider investing in to address gaps in childcare access. Funk highlighted dependent care FSA accounts, which allow employees to contribute up to $5,000 (pretax) each year for caregiving needs. Some 57% of companies surveyed by SHRM offer this account to employees, according to the organization’s 2023 benefits survey.
Other companies like Chobani and Amazon have partnered with networks such as Upwards (formerly WeeCare) to subsidize childcare for employees.
And some employers have taken their investments a step further by building a childcare center onsite. Tyson Foods recently broke ground on a center located at their Humboldt, Tennessee headquarters. The $5 million investment is expected to support more than 100 children who are five years and younger.
Look into funding resources. Funk recommended looking into funding grants that may be available at the state and federal level to support childcare investments. The federal CHIPS and Science Act, for example, is offering financial incentives to semiconductor manufacturing firms that plan to offer affordable and high-quality childcare services to their workers.
“Look towards your local workforce boards or early childhood business associations that may have some of that funding available and can really come alongside you as a consulting partner,” Funk added.