How Employers Can Stop Failing Parents

Dual dangers are threatening the national workforce: a child care crisis and a mental health crisis. The connection between the United States’ inadequate child care system and parents’ mental health struggles is so significant that the U.S. Surgeon General highlighted it in an advisory released in August on the mental health and well-being of parents. But employers that support employees experiencing child care issues have an opportunity to address a key factor affecting employee mental health and positively impact their business as a result.

In a recent report, McKinsey identified stress as a modifiable driver of health that employers can target to improve workers’ lives and asserted that doing so could have a return in economic value as high as $11.7 trillion globally. While focusing on stress reduction in the workplace may seem to be a logical strategy for addressing the problem, programs designed to directly affect stress levels have had mixed results. However, targeting a key source of stress for working parents — child care precarity, the state of unreliable and insecure child care — will have a real impact.

Stress is a psychological hazard in the workplace: It accounts for higher turnover, reduced productivity, increased accident rates, acute physical illness and mental health issues, and absenteeism. In a May 2022 survey, 68% of working mothers said they were experiencing burnout. The stress of child care issues, especially in the context of a worsening child care crisis in America, further contributes to parental mental health decline. Day-to-day child care precarity has a long-lasting health impact on mothers, increasing the risk of negative mental health outcomes for years. Working mothers’ health is already worse than that of any other employee category, and a continued lack of child care will only expand the gap.

Employees experiencing mental health issues often have reduced attention, a reduced capacity to focus, and diminished performance due to fatigue. In addition, long-term disability leave related to mental health can account for as much as 60%-70% of an organization’s overall disability-related costs. Adding to these expenses, employees with fair to poor mental health have approximately 12 days of unplanned absences over the course of a year, costing the U.S. economy over $47 billion in lost productivity annually.

Parental Support: Better for Health, Better for Business

Child care is preventive health care, and it should be perceived and economically supported in the same way that employers approach other preventive health care benefits. Employers can and should drive change with the goal of improving both health and business outcomes.

Executives have an opportunity to lead the way by recognizing the stress their employee-parents are facing and taking steps to ameliorate that burden. In doing so, their companies can benefit both culturally and financially.

Recent studies highlight that employers see a return on their investments in child care. According to a recent report, for each dollar employers invest in caregiving benefits and culture, they see an almost eighteenfold ($18.93) return on every dollar of investment. Another report, from Moms First and BCG, calculates that the ROI of child care benefits ranges from 90% to 425%. So it pays for businesses to care — literally.

Many companies across the U.S. already offer some degree of care benefits, but a one-size-fits-all solution does not exist. These actionable solutions, currently in practice, allow for a mix-and-match approach. Consider the benefits and pitfalls of each type of intervention:

1. Onsite child care. Onsite child care can ease the burden for parents whose employers provide it, but discontinuing these benefits, as companies often do, can also create high levels of stress. Employers must consider the downsides of eliminating such a benefit before committing to its creation.

2. Child care stipends. Payment for child care offers another supportive pathway. Employers can provide stipends in the form of core health care benefits, not just supplemental “emergency” care offerings. That’s not to say that an organization shouldn’t offer emergency child care solutions, as many already do, but alone they are insufficient to reduce child care-associated stress. One option for funding child care stipends as a core health care benefit is to redirect funding from wellness programs, which can have limited ROI in terms of dollars and health.

3. Flexibility. Flexibility in work hours and/or location enables more women to stay in the workforce, with a majority reporting less fatigue and burnout as a result of this workplace benefit. Greater flexibility can benefit a range of employees, including caregivers; however, flexibility may not be possible in all work environments and roles, and, therefore, other options might need to be offered to effectively alleviate child care-related stress.

4. Shortened work hours. Shortening the workweek can be another avenue of support. At the close of a pilot four-day workweek study in the U.K., workers reported 39% lower stress, 71% less burnout, and 40% fewer sleep issues. Additionally, 92% of participating companies said that they would maintain a shorter workweek. Shorter workdays also partially address the mismatch between work and school schedules, which costs the U.S. $55 billion annually in lost productivity.

5. Respect and acknowledgment. Respect for caregiving responsibilities and needs promotes a psychologically safe environment. Of note, establishing such a culture requires leaders to speak up about their own caregiving roles and support others to do the same. Child care benefits also enhance job satisfaction, as generous family policies lead to increased happiness for working parents, with no downside for nonparents.

6. Commitment to change. Employers must make a commitment to and advocate for change at the national level. Reliable, affordable, and accessible child care is associated with better health outcomes, and every American should have access to such benefits. To achieve this, we must all continue advocating and pushing for federal investment in child care and early education. In addition, employers must recognize that the child care crisis will continue to worsen before it improves and that their workers need more support in the immediate future. While employers can — and should — provide near-term solutions to alleviate child care burdens and associated stressors, government involvement is necessary for a long-term, sustainable solution. By committing to change internally and advocating for change for all at the national level, executives can support the organizational and cultural changes required to address our dual child care and mental health crises.

With immediate investment in child care, employers have a variety of options that can jump-start the critical work of shifting the national culture toward one that values and improves health. Those who make investments in addressing our dual crises will create the case studies and data to help shift national consensus. Consider the pathway Henry Ford took in 1914, when he led the way to reduce the workweek for his employees from 48 to 40 hours, 24 years before the Fair Labor Standards Act set federal standards. His action catalyzed the policy change that would ultimately have an impact on workers nationally.

Better health creates better business returns. Organizational leaders have the power to create the broader changes we need, right now. There are real opportunities for leaders to step up and create change within and beyond their own organizations to address the mental health and child care crises. Leadership starts by acknowledging the problems with child care and their impact on employee mental health, and initiating key cultural shifts to recognize and support the needs of parents and caregivers.

Now is the time to invest in support structures for employee caregivers, recognize the value of a healthy workforce and the impact that child care has on health, and align with the movement to create long-term sustainable change. It’s time to lead the way. Your employees are not-so-patiently waiting for you to do it.

“The MIT Sloan Management Review is a research-based magazine and digital platform for business executives published at the MIT Sloan School of Management.”

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