New Program To Provide Low-cost Childcare For Employees

An online education company is getting ready to launch a new program that will provide low-cost childcare for employees. This program could fundamentally transform the way some companies do business.

Edalta, a Boston-based online learning provider offers this program that helps students develop the skills they need to succeed in school and in life. As part of Edalta’s “Family Matters” perk, employees who work a certain number of hours per week at their organization can enroll their children in the subsidized daycare at no cost. The company hopes to have 10 percent of its workforce enrolled by 2019.

“We know that career advancement and professional success requires the whole individual: mind, body, and spirit,” says Edalta’s CEO Laura Berf. “Our goal is to build an organization where all of our employees have the support they need to thrive at work and outside of work.”

According to a recent report by economists at Boston College, offering childcare subsidies could provide as much as $10.4 million worth of additional lifetime income for every 1,000 workers. That’s because women who have access to affordable childcare are more likely to re-enter the workforce than those who don’t. Uninterrupted careers also tend to make more money when they do return.

And if women earn more money, so do the families they support.

More than 60 percent of low-income families are headed by single parents. Two-thirds of all U.S. children are being raised by a single parent. And one in three children lives below the poverty line. Many of them are with working parents where it’s almost impossible to get ahead without financial help from others.

Affordable childcare could help alleviate some of those problems.

It’s a win-win opportunity because businesses need to be able to attract and keep highly qualified workers to compete in the global marketplace. And as parents gain access to high-quality care, they can work smarter, not harder. Thus, companies will have easier access to talented workers — ones who will stick around longer too. That’s especially important as companies are trying to figure out how they can build a workplace where employees feel valued and engaged. 

Something as simple as affordable childcare can go a long way toward solving those problems. Not to mention improving our society while we make our way through the Farther Front of the Fourth Industrial Revolution. It’s just one example of how innovators are thinking about how they can improve workplaces for everyone. By this, people have a chance to compete and succeed in the New Reality.

What is the importance of low-cost childcare for employers?

For one thing, giving employees access to affordable childcare could go a long way toward solving the problem of “maternal mortality,” or having women dying in childbirth.

The World Bank estimates that 100 million women are unable to access adequate and affordable healthcare because they live in poverty. The overwhelming majority of them live in developing countries and are often considered untouchable by the public health systems because they’re marginalized members of society. And sadly, medical system often deliberately ignores them.

In fact, 76 percent of the international aid budget was spent on treating specific diseases like tuberculosis; malaria; and AIDS, rather than on trying to address these issues at their root cause (in this case poverty). Just $3.7 billion was spent on public health initiatives that are designed to ultimately eradicate those same diseases.

And nowhere is the problem of maternal mortality more acute than in sub-Saharan Africa, where poor women have a one-in-16 chance of dying during pregnancy. That puts them at higher risk of dying from childbirth than women in Afghanistan, Iraq, or Syria. Or even the United States, for that matter.

Thankfully, there are some companies — NGOs; startups; and universities — who are starting to think differently about how they can attack these problems by thinking outside the box when it comes to solving them.

What’s so special about Edalta’s childcare program?

One of the challenges that these organizations face is they can’t just use their existing resources for these problems. It takes time, money, and creativity to move things forward in a way that’s sustainable in the long term.

Fortunately, there are some innovative organizations out there who are trying to turn these problems on their head. They are finding ways to increase access to quality services for all while still maintaining financial sustainability. One of those groups is Edalta.

Edalta is a children’s education startup that offers affordable, collaborative online learning. They’ve been giving students access to the resources they need to succeed in school and in life for over 20 years. Also, they’re doing it in a way that’s beneficial for both the students and their families.

And now, as part of their family-friendly benefits package, they’re trying to offer their employees more opportunities by piloting a low-cost childcare program. This program will hopefully expand when it’s ready for full-scale launch within a year or so.

The program will be available to employees who work 26 or more hours a week, and it’ll provide four weeks of care for children up to age 5, with the full-time equivalent of five days per week. That’s roughly equivalent to the cost of public childcare — which is typically around $12 per day in the United States.

And obviously, everyone wins here. Employees will have new options when it comes to finding childcare. Parents will also have access to affordable childcare from their employer. This helps them make ends meet and rejoin the workforce to help them build a better life for their families.

But in addition to the obvious benefits, the program will also help Edalta attract and retain talent. Their research indicates that families are concerned about childcare costs; and if they’re not, they’re at least interested in finding out about what kinds of solutions their companies have to offer.

Offering something as beneficial as this could give companies a much-needed edge over their competition too. This is especially important during these times when finding talented workers is so difficult. That’s especially true for staffing firms, where access to childcare can be a major stumbling block for business expansion and growth (not to mention retention).

Is it enough?

While programs like Edalta’s are promising, they only scratch the surface of the problem. Many new parents have to miss work when they’re on maternity leave. This happens even in countries like Sweden, where there’s a good amount of family-friendly policies in place.

Many job sites are starting to offer more family-friendly benefits because they’re not attracting and retaining employees effectively anymore. This doesn’t mean this is anywhere close to being a universal problem.

A report from the Center for American Progress found that three-quarters of working mothers in the United States receive no paid time off or sick leave. Only 20 percent of employers offer family-friendly benefits, which include parental leave and part-time work options for parents.

Meanwhile, a study by the Families & Work Institute found that 41 percent of parents who have a child under age 3 want to return to work. The problem is that their employer won’t let them take paid parental leave despite wanting them to.

As long as this continues to be the case, companies like Edalta will have lots of opportunities with their affordable childcare program. It’s a step in the right direction — but we need to go beyond that.

It’s becoming more common to hear from companies like Facebook, which offers its employees 16-weeks of paid leave. However, not everyone gets this kind of access. So the more companies you hear about, the more potential impact this could have on working parents and their families.

With any luck, it’ll start to make an impact in other areas too. It’s great to see some additional funding for maternal health initiatives from the United States government. But, it would be even better if things like maternal health and children’s education were receiving funding as well.

And it’s not just about funding here. There are plenty of issues surrounding these problems that have to be addressed. Issues on education, transportation, the gender pay gap (in case you forgot), and more.

There’s also a huge opportunity to make a difference by investing in startups and nonprofits working on solutions. However, these are organizations that need resources. The problem is large enough to warrant some serious attention from mainstream investors who can tackle these challenges head-on.

It’s an added bonus that Edalta’s program could help them do so while still keeping their commitment to employee benefits intact — which is important as startups tend to be cash-strapped when it comes to providing more than bare-bones benefits packages.

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