The New Best Benefit? Day Care.

It’s costly and complicated. But firms facing labor shortages and wanting employees back in the office are giving the idea a new look.

The hiring manager didn’t know what to do: he was in a cycle of constant hiring, punctuated by job vacancies and few applicants. Then he got a lift he hoped would help his cause: a long-awaited company day-care center opened.

The shortage of younger workers in the labor market is extreme: the US workforce age 16 to 24 has decreased in size by 2.7 million (13%) over the last decade, according to the US Bureau of Labor and Statistics. But roughly half of hourly workers under age 30 are parents, and day care appears to be one benefit that dependably attracts them in droves. “It’s a huge asset,” says Jacob Zabkowicz, vice president and general manager for global RPO at Korn Ferry, who sees day care offered by a range of firms, from pharmaceutical to consumer brands to transport. “If employees have multiple job offers, parents take the one with childcare.”

Of course, childcare comes with potential liability and a host of logistical issues. Still, about 11% of 1,700 businesses surveyed late last year now offer day care, up from 5% prior to the pandemic, according to business network Best Place for Working Parents. Experts say labor shortages and return-to-office mandates have reignited focus. After years of working from home, parents returning to the office require new childcare arrangements. “Anything that an employee has to figure out creates a real obstacle to coming back to work,” says John Long, North America retail sector leader at Korn Ferry, who notes that—unlike carping about commute time and parking fees—childcare is a “100% legitimate concern.”

The growing interest comes on the heels of a US Commerce Department announcement that would require semiconductor firms to provide workers with affordable childcare in exchange for a portion of $39 billion in federal subsidies. For Emilie Petrone, managing partner in Korn Ferry's Global Human Resources, Life Science, and CEO Succession practices, it’s a change long overdue—one that smart firms are embracing.  "Companies have to be able to allow families to feel like they have a secure ability to care for their loved ones,” she says.   

While employers often assume that easy access to day care is most prized by hourly employees, experts say often all levels of staff enjoy it. Senior managers can come in at 7:30 AM if they need to, because they’re not waiting for an 8 AM opening time. Hourly workers can log shifts longer than 8 hours. Though increased productivity is a boon for the employer, there can also be problems with access. “I’ve repeatedly seen corporate day cares fill up quickly,” says Zabkowicz. “Who gets access? Is it just the executive team? Or is there a lottery?”

Still, experts say many companies shouldn’t rush into providing the benefit. A first step is to review parenting-related policies. “Our employees are going to have children. How are we supporting them?” says Ron Seifert, North America workforce reward and benefits leader at Korn Ferry. For example, a care benefit that provides either a sick-day nanny service or a place to drop off sick children can be greatly appreciated by employees and sharply reduce parent absenteeism. Most companies, he says, can reduce liability by outsourcing to a dedicated childcare provider—though he points out that some light reputational risk remains.

He emphasizes the positive messaging that comes with day care. By demonstrating that the company cares about young people in the community, particularly kids of employees, “it strikes a nice chord in the ESG world,” he says. “I would put it high on the list of things to think about, especially if you are interested in having a gender-balanced workforce.”


Learn more about Korn Ferry’s Total Rewards capabilities.