While the Biden administration’s pledges to improve access to affordable childcare options have run into Congressional stalemates for years, a new federal requirement may pave the way for some movement on employer-sponsored childcare.

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The Commerce Department last week unveiled provisions of its funding application for the CHIPS Incentives Program, which provides federal funding to semiconductor manufacturers; the CHIPS and Science Act was enacted last summer to, in part, address widespread semiconductor shortages. In the announcement, the department stipulated that companies seeking at least $150 million would need to outline a plan by which they would offer employees access to affordable, quality childcare. The terms are flexible and can include options like subsidies for childcare centers or the creation of on- or near-site childcare.

The move comes after the childcare crisis hit an inflection point at the start of the pandemic—with millions of Americans, largely women, exiting the workforce to manage caregiving duties. And as employers increasingly call workers back to the office—some, like Disney, for up to four days—employees’ ability to access affordable, quality childcare could become a differentiator in the recruiting and retention game.

However, the CHIPS Act provision is likely too narrow to generate significant movement on the issue, says Dr. Pam Cohen, chief research and analytics officer at WerkLabs, the data and insights arm of The Mom Project.

“The move itself is likely too limited in scope to prompt any massive change in the way employers approach employee childcare,” Cohen says, noting that, if instead, the mandate applied to all federal contractors, for instance, it may carry more weight. This initial step, however, could serve as a pilot program—testing the viability of a childcare mandate for contractors.

Dr. Pam Cohen, WerkLabs
Dr. Pam Cohen, WerkLabs

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The CHIPS Act provision, however, is complicated by the fact that many employers are going to struggle to meet the eligibility requirement. Given widespread childcare deserts, Cohen says, many manufacturers would need to create their own on-site childcare, which will be a challenge without proper infrastructure in place—particularly for smaller manufacturers.

“There needs to be a much larger policy shift—most likely with targeted federal subsidies—to address the massive problems associated with the availability of childcare,” she says.

A spokesperson for Intel—the world’s largest semiconductor manufacturer—told HRE that the organization already provides “best-in-class benefits packages,” including tuition discounts at local childcare centers and emergency backup resources.

“At Intel, we believe that embracing diversity and inclusion is key to innovation and growth. Diversity and inclusion are not a program or a campaign; it’s how we do business,” the spokesperson says. “We work to create an environment that allows employees to bring their whole self to work and cultivate a sense of belonging for everyone. Access to affordable and reliable childcare is an important part of this goal.”

See also: Why flexibility is just the start to draw women back to the workforce

Indeed, Cohen says, the availability of childcare is a critical factor in the workforce participation of parents, particularly women. WerkLabs’ recent research found that childcare cost is consistently one of the top drivers of parents leaving the workforce or putting their careers on pause.

The crisis is most salient among Black women. In a recent survey of more than 300 Black moms, the organization found that 50% report that meeting childcare costs is “extremely challenging” and nearly half struggle to even find quality childcare.

And currently, employers aren’t doing enough.

“The vast majority of employers do not provide any childcare-related benefits,” Cohen says.

But the business case for doing so is clear. WerkLabs found a direct link between affordable, accessible childcare and better business outcomes—particularly, workers with adequate childcare options report more organizational satisfaction, tied to better loyalty, productivity and readiness for advancement.

“Providing greater access to childcare pays long-term dividends,” Cohens says.

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