Childcare Benefits More Than Pay for
Themselves at US Companies
MARCH 26, 2024
By Emily Kos, Kelsey Clark, Nicole De Santis, and Tyler Joseph
READING TIME: 8 MIN

Steamboat Ski Resort, situated deep in the Rocky Mountains, is an ambitious organization with 750 yearround employees and another 1,200 seasonal workers. But when the COVID-19 pandemic shuttered criticalchildcare options in its hometown of Steamboat Springs, Colorado, the company’s ability to attract and keep
great people was put to the test. That’s when Morgan Bast and Loryn Duke, who lead the company’smarketing and communications departments, combined their resources to create a new childcare facility for
Steamboat families—a bright onsite space for kids from eight weeks to seven years old that includes licensed
caregivers and preschool teachers, indoor and outdoor play, and easy and flexible drop-off and pickup.

© 2024 Boston Consulting Group1

Today, with startup costs funded equally by the resort and the State of Colorado, the Steamboat Child Care
Center is bustling with 35 children and managing a waiting list. And Steamboat Ski Resort, a unit of Alterra
Mountain Company, is way ahead. Its working parents, who pay a subsidized rate for the service, say that theymight have quit their jobs without it, and they are more focused and effective because they’re free of extra
worry in a region that qualifies as a “childcare desert.” The company is forging deeper relationships with thetown by offering some childcare spots to nonaffiliated families, and in 2023 it won a Governor’s Citizenship
Medal for the program.

Childcare Benefits Are a Smart Investment
US companies that have added childcare benefits to their employment packages are seeing quick and lasting
rewards in recruiting, retention, and productivity, according to a study we conducted in fall 2023. In fact, wefound that offering childcare benefits can pay off so quickly that it should be a no-brainer for employers in acompetitive hiring landscape to do so.
Our study examined the value and consequences of providing help with childcare to working parents at fivecompanies—Etsy, Fast Retailing, Steamboat Ski Resort, Synchrony, and UPS. These companies vary in sizeand employee mix, and represent five different industries—e-commerce, retail, hospitality, financial services,and supply chain management. The research, which we carried out in collaboration with Moms First, anonprofit organization that focuses on advancing equality for women in the workplace, encompassed
financial analysis, survey responses from approximately 1,000 employees, and personal interviews.

The results debunk a widespread perception that employer-sponsored childcare benefits are strictly a costcenter. Instead, we found that all five companies obtained a positive return on investment (ROI)—from 90% to© 2024 Boston Consulting Group2

as high as 425%. (See Exhibit 1.) They reported ROI gains whether the childcare benefits went to salaried orhourly workers.
Corporate leaders who have considered this kind of expense but haven’t drilled down to identify the potential
positive returns could reimagine childcare benefits as an investment that merits serious consideration.
Research by Care.com has shown that such benefits attract and retain working parents at least as much as
health care and retirement benefits.
Parents miss far less work when they can count on reliable, available childcare. Those surveyed said that they
avoided up to 13 work absences a year when they no longer had to juggle childcare disruptions. (See Exhibit2.) Their responses are consistent with data from a pilot program at UPS, which added onsite emergency
childcare in one Northern California facility from October to December 2022. UPS reported that it avoided anaverage of three employee absences a day during that brief period. The company, which processes 5 billion
packages a year and employs nearly 500,000 people, is expanding its childcare experiment to eight sites in six
states by the end of 2024.

Given the high cost of recruiting and training new workers, every company in our study recouped the fullannual expense of its childcare benefits by preventing just a few departures. We calculated that retention
breakeven point—the number of employees that the company needs to retain annually to cover the cost ofproviding childcare benefits—as the total cost of providing the benefits divided by the average expense ofreplacing an eligible employee. The figure ranged from just under 1% to 12% of the total number of eligible
employees for each company. (See Exhibit 3.)© 2024 Boston Consulting Group3
“This was truly uncharted territory, but we created a solution that makes a difference in the lives our offrontline employees,” said Nando Cesarone, executive vice president and president of domestic operations atUPS. “This program offers a true childcare backup option, giving parents the flexibility they need, particularly
when life has its unexpected turns.”
At Etsy, the Brooklyn, New York–based e-commerce company with $2.7 billion in revenue last year, employees
may qualify for up to $4,000 a year in childcare credits, which they can spend with a contracted provider thatoffers onsite or at-home care options, or on their own private care plan. Of the eligible Etsy working parents
we surveyed, 82% said that childcare benefits were an important factor in selecting their employer. Maureen
Sitterson, who recently received a promotion to senior director of global product marketing, has two kids—
and she plans to stick with Etsy. “Even if another company offered me more money tomorrow, I wouldn’t evenconsider it,” she said.
The lack of affordable, high-quality childcare for 50 million working parents is an overwhelming problem in
the US economy. More than half of Americans live in a census tract with three times as many children who
might need day care as there are slots with licensed caregivers. This is the “childcare desert” scenario.
Meanwhile, good care is expensive, especially for infants. Research by Care.com indicates that 60% of US
households pay more than 20% of their annual income for childcare. Among parents leaving the workforce,26% cited the high cost of childcare as a primary reason, according to a 2022 survey by the US Chamber ofCommerce.
Just 12% of all US workers have access to childcare benefits through their employer, a figure that drops to 6%
for people who work part-time or in the lowest income quartile. “Deskless workers,” who occupy 70% of US
jobs, have the greatest need for help with childcare and, often, the most at stake when their arrangements fallapart. Still, more than 75% of companies don’t design their benefits to meet the needs of deskless workers.
This may represent a missed opportunity for corporate leaders coping with substantial turnover in those kindsof jobs.
Our study covered an array of childcare benefit strategies, including onsite or near-site facilities for regularuse, backup services such as on-demand or drop-in care, and stipends to help parents pay for their own© 2024 Boston Consulting Group4

arrangements. In all scenarios, returns were positive. Some programs involve government support in the formof funding, coordination, or policy change. That is consistent with the perspective that longer-term, systemic
childcare solutions will require commitments from both the private and public sectors.
Our study did not factor in separate family leave policies that support new parents and babies, such as paid
time off to recover from childbirth and hybrid work arrangements to help employees coordinate work andfamily responsibilities.

The Financial and Cultural Advantages of Childcare
Benefits
Our research indicates that companies that take direct action to help employees with childcare may gain acompetitive advantage. For each company in our study, we calculated the percentage ROI from the company’s
childcare program as the net financial impact from retention savings and improved productivity versus the net
cost to administer the program. ROI, for our purposes here, is a yearly cost-avoided metric. Companies don’t
receive these investment returns directly; rather, they achieve them by avoiding costs that they would otherwise
incur.

Some important intangible advantages of corporate childcare benefits are harder to quantify, yet survey
participants widely discussed them. (See Exhibit 4.) In numerous interviews, employees described thesebenefits as a billboard of positive corporate culture—something that they could point to and say “I know mycompany cares about me.” Up to 86% of respondents said that they were more likely to stick with theiremployer because of its childcare benefit. As many as 78% said that the resulting peace of mind had given
their careers a boost. They appreciated having coworkers and managers who understood their family needs,
and they felt more ambitious, productive, and open to accepting tougher assignments.

© 2024 Boston Consulting Group5That’s true of Suleyka Basil, a store manager in New York City at Uniqlo, a clothing retailer with about 4,800
US employees that’s a unit of Japan-based Fast Retailing. When she learned that she was pregnant with twins,
Basil prepared to quit her job to take care of the babies because she didn’t think she could afford childcare.
But then the company announced a new childcare stipend of up to $1,000 a month for 36 months for
management-track employees. “It truly saved us,” said Basil, who feels more committed to her job than ever.
Fast Retailing childcare benefits pay for themselves by averting just 15 departures among eligible employees
each year.
At Synchrony, Gleydis Gonzalez, a former teacher, takes advantage of up to 60 days a year of backup carereimbursements for her three children, now ages 3, 7, and 9. She joined the Stamford, Connecticut, company,
where her husband is also employed, three years ago and works as a recovery specialist. She’s so satisfied
with Synchrony that she has since recruited two other working parents from her immediate network to join thecompany. About 24% of its US employees have children under the age of 12.
“Our childcare benefits are making Synchrony a leading employer of choice while strengthening ourworkforce,” said Carol Juel, the company’s chief technology officer and chief operating officer.

This report is the fourth in a BCG series on the US care economy, a vast ecosystem valued at almost $6 trillionof economic activity a year, including unpaid work. In December 2022, we forecasted that the US will lose
about $290 billion in GDP a year by 2030 by failing to confront an evolving crisis in care that has two key
components: too few care workers, and too many productive people leaving their jobs—whether they want toor not—to handle care obligations in an inefficient and disorganized marketplace.
Many US companies so far have refrained from offering childcare benefits, even as they have grown andinnovated in their other human resources offerings.
Our research over the past two years demonstrates that society as a whole is diminished when it fails torecognize that high-quality, affordable care—including childcare, elder care, and care for the sick—are integral
to the smooth functioning of the whole economy. Many women and an increasing number of men must cut
back on paid work or leave the workforce altogether to handle their care responsibilities. The integrity of theworkforce rides on the strength of the care economy.
The corporate sector has a significant role to play in enabling parents to remain in the workforce. This latest
research offers evidence that providing childcare benefits make sense both financially and strategically.
Childcare benefits pay for themselves in myriad ways—most notably by preventing employee absences anddepartures year after year. The rest is upside.
The authors thank their BCG colleagues Monica Campos and James Hinckley for their contributions to the research andanalysis in this article. They thank Lisa Kassenaar for her writing assistance. They also thank Joe Fuller, Misty
Heggeness, and Emily Oster for reviewing and advising on the methodology.

© 2024 Boston Consulting Group6Authors
Emily Kos
MANAGING DIRECTOR & PARTNER
ChicagoKelsey Clark
MANAGING DIRECTOR & PARTNER
DallasNicole De SantisPRINCIPAL
AustinTyler Joseph
CONSULTANT
AustinABOUT BOSTON CONSULTING GROUP
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