Mar 9, 2023
Companies Eye Cutting Benefits for Working Parents as Recession Looms
(Bloomberg) -- About half of US companies plan to cut employee benefits this year to prepare for a potential recession, according to a recent survey.
Adoption and fertility-assistance programs were the perks companies said they were most likely to eliminate, while parental leave and child-care benefits were also on the chopping block, domestic-services website Care.com said in a report Thursday. In December the site asked leaders from 500 companies in the US about their plans for the year and almost all said they expected to adjust employee benefits in some way.
The reductions will add to the strain parents have faced for years, which worsened due to the Covid-19 pandemic. The cost of child care is rising while the workforce participation rate for workers in the sector has yet to fully recover. In January there were about 992,000 people employed in child care, compared to more than 1 million in February 2020, according to the US Bureau of Labor Statistics.
In total, 47% of companies surveyed said they were planning to cut certain employee benefits this year. Only 9% said they were planning on expand the benefits they provide workers.
Care.com said that food and hospitality, retail and manufacturing and construction businesses were the most likely to report benefit cuts.
“Without care and child care, people cannot work,” said Virag Khara, the head of care for business at Care.com. When companies provide family care benefits, employees are less likely to miss work and they save an average of $1,700 per year in expenses. Employers also win, Khara said, because of loyalty such benefits build.
After adoption programs, commuter benefits and home-office stipends were the top perks companies planned to slash. Less than half said they planned to prioritize child care more in 2023 than they have in previous years.
According to a February report from the nonprofit Council for a Strong America and the business-advocacy group ReadyNation, 26% of parents surveyed said they’d quit a job due to child-care issues and 23% say they’d been fired.
The lack of child-care options has forced parents to show up late or leave early from work and caused them to pass up additional training, promotions and even new jobs. Mothers are more likely to take on the burdens of child care compared to fathers and are more likely to opt out of the workforce altogether.
“Family care benefits are no longer ‘nice to have,’” said Khara. “Any employer who wants to retain their best workers, that wants to increase productivity, they need to invest in care”
(Updates with quotes from Care.com executive, starting in 6th paragraph.)
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