Offering childcare benefits is critical for growth. Here’s how businesses can do it.

Providing childcare benefits not only helps employees. It significantly contributes to a company’s growth. That’s the conclusion from a recent survey of almost 1,300 small business owners by Goldman Sachs.

The report found that 77% of survey respondents would support policymakers increasing federal funding programs to help employees better access affordable childcare. More than half, 55% of small business owners, said that access to affordable childcare has not been sufficiently addressed by presidential candidates this election cycle.

“We have always had the philosophy and the approach that employees need to be able to bring their whole selves to work,” said Nicole Schaeffer, the chief people strategy officer at Insmed, a 1,100-person biotechnology company in Bridgewater, N.J. Insmed offers an annual stipend to its employees to offset childcare costs, among other benefits. “We can attract better talent when we help our people tackle the challenges they face both in their professional and personal lives, and a big part of that in many people’s lives is some sort of dependent care.”

But the federal government is unlikely to take action anytime soon. Earlier this month, the U.S. Senate rejected a tax bill that would have expanded the available childcare credit for families, and politicians remain split on how to provide this funding.

Here’s what businesses can do to help employees access affordable childcare:

One strategy is to contract with an existing childcare provider and share these costs with your employees.

At Cozen O’Connor, a law firm in Center City, employees can leave their children at a childcare facility for a nominal daily price, with the rest of the cost being subsidized by the firm. It’s not intended to be used daily, but it’s there as a backup plan when other childcare options fall through. Employees who want to use the service long-term can do so with a higher co-pay.

“We offer this benefit through a contracted child care partner,” said Erin Bushnell, the firm’s chief human resources officer. “It’s for the times when an employee’s childcare falls through or a school has a random day off and a sitter can’t be found.”

Bushnell adds that the program can also extend to after-school tutoring services and summer camp.

“It goes beyond just the backup childcare piece,” she said.

Working parents are often faced with unexpected demands — school meetings, doctors’ appointments, sick children — that conflict with their jobs. That’s why it’s important for employers to offer more flexible paid-time-off plans so that their workers can balance both family demands and work responsibilities.

Even before the pandemic, Insmed created a “professional judgment” vacation policy, where employees are allowed to take time off whenever and for as long as they need, with a supervisor’s approval. That policy is still in effect.

“With professional judgment, we’re treating people as adults,” said Schaeffer. “We originally tried it as an experiment, but it’s been very well received and very well respected.”

Schaeffer said that because her firm is flexible with paid time off, employees can feel more comfortable taking the time they need to care for their children as long as their work is getting done.

“Our policy is to take care of yourselves and take care of your family first, and that way you’ll be better able to do your jobs,” she said.

Even small companies can do a lot to help their employees with childcare benefits. In addition to pretax contributions made to Flexible Spending Accounts by employees, employers can also provide reimbursements for childcare expenses up to $5,200 per year per employee.

And smaller businesses can partner with each other to share costs. There are also tax credits available to help pay for contracted childcare facilities and even for offering paid leave.

There are also some generous tax credits and deductions available for workers who are eligible. But navigating them can be complicated, so you can help your employees by offering consultations with a financial or tax adviser to help them leverage the benefits.

Cozen O’Connor offers a “family concierge” service to all employees to help them figure out care options for their children, as well as financial incentives ranging from firm reimbursements to tax credits. The firm also offers counseling to parents who need help transitioning back from parental leave.

“Getting back to work after having a child isn’t easy for some,” said Bushnell. “From an employer perspective, we provide this support to our parents because a big law firm setting can be stressful with long hours and being able to provide somebody that can help them through those challenges is very important for us.”

In the Goldman Sachs survey, 62% of business owners said that being able to offer a childcare benefit to their employees would have a positive impact on talent recruitment and retention. But this kind of benefit goes well beyond that.

Both Bushnell and Schaeffer agree that a company can’t get the best from their people if their personal lives aren’t in good shape. Like all other companies, their products and services are dependent on their employees’ intellect and time, and if their people are not able to be at their peak performance because they’re worried or distracted by childcare issues, that impacts a company’s quality and growth.

“More importantly, it’s also the right thing to do,” said Bushnell.