Small Businesses Such as Red Rooster Now Offering Childcare To Retain Staff

It has been an ongoing challenge for U.S. parents to find sustainable and affordable childcare that allows them to attend work and make a living.

Parents in certain states are facing significant financial strains, with average annual childcare costs reaching as high as $10,000 per child, according to Business Insider. This financial challenge has led to some families making hard life-changing decisions, including relocating across the country in search of more affordable childcare options. A recent analysis from Bank of America has found that the United States ranks second-highest among developed nations in terms of rising childcare expenses, highlighting the challenges faced by families in balancing work and childcare costs.

The rising costs have led some parents to opt out of the workforce altogether, leading to a significant challenge for small businesses. In response to high turnover rates, some small businesses are tackling this issue head-on by offering on-site childcare as a practical solution.

Having dealt with a long commute to work, Zach Wiley, a 31-year-old resident of Virginia, had no choice but to resign from his role at Red Rooster Coffee in 2021. However, with the recent introduction of on-site daycare services at the coffee shop, Wiley has enthusiastically returned to the job he left. The availability of childcare at his workplace has not only streamlined his professional responsibilities but also empowered him to purchase a home closer to his workplace.

Wiley said, “The childcare is just huge. I don’t know what we would do without it. Our son loves it, and I never worry about him. He’s right through the next door.”

Based on details from the Virginia Department of Social Services, Wiley’s two young kids go to Red Rooster Coffee’s very affordable on-site childcare for $2 an hour per child. The center accepts kids from 1 month up to nearly 13 years old.

Companies that offer on-site childcare, stipends for childcare, or backup care, such as Etsy and UPS, have experienced more employee recruitment and retention. They argue that the benefits of offering childcare outweigh the costs linked to the service.

According to a study by the nonprofit Moms First, which campaigns to “make a historic investment in women’s economic recovery and empowerment,” company-provided childcare can significantly boost an employee’s earning potential and career advancement opportunities.

The Moms First study looked into five companies that offer childcare benefits: Esty, UPS, Fast Retailing, Steamboat Ski Resort, and Synchrony, and the findings showed that all of these companies experienced a significant return on investment from their childcare benefits, with the ROI ranging from 90% to 425%. This development with childcare benefits is particularly important for families with a real focus on women, who often have no choice but to leave the workforce because of the financial strain of childcare.

Reshma Saujani, founder and CEO of Moms First, said that the findings at these companies show that “childcare truly pays for itself.”

The report highlighted that almost 86% of employees surveyed stated that these benefits increased their likelihood of remaining with their current company. This figure is significant, especially when combined with the findings that the report also brought to light. According to a press release, “Retaining as few as 1% of eligible employees can cover the cost of providing childcare benefits for all of those who are eligible within a company.”