James G. Beierlein / James E. Van Horn
Professor of Agricultural Economics / Professor of Family Sociology
Agricultural Economics and Rural Sociology
Penn State University
During the past 30 years, America's labor force has undergone a dramatic change. In one generation, the ratio of men to women in the work force declined from 2:1 (1960) to less than 1.25:1 (1987) (Bureau of Labor Statistics). The Bureau of Labor Statistics estimates that the growth in the number of working women will continue into the next century, with women comprising 60% of all new entrants to the labor market.
The growing number of women in the work force not only influences how we work but also how we live. The traditional family of a working father and a stay-at-home mother now represents less than 13.5% of all households. Sixty-five percent of all women with children under 18 years of age are now working. It is estimated that the women who are most likely to join the labor market in the future are those with children under the age of six. This means that increasing numbers of employees are working parents who must find ways to cope with the often conflicting time demands of both work and child care.
There are two reasons why businesses should be concerned today.
First, problems with child care can adversely affect the job performance of working parents by increasing absenteeism, tardiness, turnover rates, and recruiting and training costs. These, in turn, can adversely affect productivity and work quality and ultimately the competitiveness of the businesses that employ these workers. A study done by AT&T of over 5,000 of its employees found that 57% of the women and 33% of the men with children under the age of 6 had lost time from work in the preceding month due to child care problems (Fernandez).
Second, in the past such problems with child care would be of little concern to employers since it affected just a few employees and there always seemed to be other workers willing to take the place of those that quit. But the labor market today and into the foreseeable future is radically different. The old problem of finding enough employment for rising numbers of workers is now being replaced by the new problem of locating enough workers to fill new jobs generated by an expanding economy.
If the anticipated labor shortfall does occur, it will be more important than ever that employers be able to attract and retain good, productive workers in order to stay competitive in the market. Given the changing composition of America's labor force and the impact child care problems can have on worker productivity, businesses should find employer-assisted child care a cost-effective way to control labor costs and enhance worker productivity.
Increasing numbers of businesses have already found that employer-assisted
child care is an effective way to attract and retain quality workers.
Ongoing surveys by The Conference Board, a respected New York
based non-profit business education firm supported by a number
companies, show dramatic increases in the use of such programs by its members from just over 100 firms in 1978 to 4,177 in 1989.
The Conference Board found businesses use a number of different
alternatives. Of those firms with an employer-assisted child care
program, only 7 percent operate child care centers, while 24 percent
provide Resource and Referral services. However, 62 percent of
the firms provide some form of financial assistance with flexible
benefits, child care discounts, and vouchers being the most popular
A broader survey of employer-assisted child care conducted by the Bureau of Labor Statistics shows that less than 5 percent of firms are involved in the operation of child care centers and other direct forms of parental assistance. However, 61 percent of all firms did offer flexible work rules as a way to assist working parents. The most popular forms of flexible work practices are flexible leave and flex-time. These options reflect business's response to the changing composition and needs of their workers and the realities of today's labor markets.
When businesses are asked why they do not do more to help employees
handle child care, the responses typically center on cost, cumbersome
government regulations, and the inability to see any benefit from
such efforts. But when pressed to discuss the options they examined,
few list more than operation of their own day care centers.
Clearly many businesses are not aware of the array of options to assist their employees in meeting their child care needs and the benefits that can result. Often community and group action by several firms can lead to an inexpensive yet effective solution.
While there is little cause-and-effect evidence on this subject, testimonials from firms that have instituted assistance with child care, generally identify four benefits: (1) enhanced ability to recruit employees; (2) lower labor turnover rates; (3) higher levels of labor productivity because of greater work experience, low absenteeism, and higher morale in the employees; (4) improved community relations. Each can give a firm ways to significantly lower costs, raise profits, and keep their competitive edge in today's highly competitive markets.
This manual was produced by a grant from the Department of Agricultural Economics and Rural Sociology, College of Agriculture, Penn State University. The U.S. Department of Labor Women's Bureau provided information for employee child care assistance options.
Extension home economists:
Ruth Anne Mears - Clarion County
Cheryl Miller - Clinton County
Amy Walters - Fulton County
Patricia Leach - Indiana County
Dawn Olson - Monroe County
Jane Mecum - Perry County
A. Joan Lamberson - York County
Department of Agricultural Economics and Rural Sociology:
James G. Beierlein - Project Director
James E. Van Horn - Project Director
Lyn C. Horning - Research Associate