Tight US Labor Market’s Latest Worker Benefit: Paternal Leave, Help With Childcare Costs

October 16, 2018 by Paul Ausick

Employers are being forced to get creative in their efforts to attract and keep workers. The U.S. unemployment rate of 3.7% means that nearly every American who wants a job now has one.

The usual way for employers to deal with this is to raise wages, and many have done just that. The National Federation of Independent Business reported early this month that 37% of businesses it surveys had increased employees’ pay in the past three months, an all-time record.

While many employers are doing the same thing, others are seeking more unusual approaches to find and keep employees. Employer help with family leave and childcare expenses are two such tactics.

Andrew Challenger, vice president of global outplacement and executive coaching firm Challenger, Gray & Christmas, commented:

In the last year, many companies took the initiative to help working parents by adding childcare and more expansive parental leave to their benefits packages. … Right now, the job market is so tight, job seekers are leaving offers on the table. Companies are struggling to find qualified workers. If employers fail to offer perks that resonate with the talent it seeks to attract, workers will look elsewhere.

Challenger noted that General Mills recently extended both paid maternity and non-birth parent leaves to its employees, and Walmart now offers its full-time hourly employees the same parental leave benefits as its salaried employees. The General Mills plan includes 18 to 20 weeks of fully paid time off for birth mothers and 12 weeks for spouses or adoptive parents. Walmart’s benefit includes 10 weeks of fully paid leave for birth mothers and six weeks for other new parents.

Starbucks has taken a different approach, offering 10 days of paid child or adult care for those occasions when parents or caregivers are in a bind. Employees will pay just $1.00 per hour for the backup care or $5 a day for in-center care. With childcare costs running at an average of $211 a week according to Care.com, two full weeks of childcare for $10 or $50 is a significant benefit.

From Care.com’s July report on U.S. childcare costs:

One in three families (33 percent) spend 20 percent or more of their household income on child care; 19 percent of families spend 25 percent or more; and a whopping 71 percent spend at least 10 percent of annual income. The U.S. Department of Health and Human Services defines affordable child care as costing up to 7 percent of household income.

Andrew Challenger summed it up:

If companies are specifically looking to attract and retain Millennials and members of Gen Z workers, they need to pay attention to values – especially those related to family planning. A compelling benefits package featuring childcare and substantial leave might help to attract top talent and improve employee satisfaction in the process.

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