The Economic Impact on Businesses

Recruitment and Hiring Challenges

Low unemployment rates and a plateaued population size continue to present challenges for employers with regard to recruitment, hiring and retention of employees. Seven out of 10 jobs in Oregon were hard to fill at any given time between spring 2021 and spring 2022 and more recently, employers reported difficulty filling 58% of winter 2024 vacancies.

Employer-sponsored child care is an increasingly in-demand benefit for the modern workforce. According to a Parent Confidence report, 68% of working parents believe employers should offset the cost of child care for their employees, and 81% find a company’s child care benefits important to their job consideration process.

Attracting and retaining talent is increasingly difficult without family-friendly policies. In competitive job markets, businesses that fail to offer child care support risk losing qualified candidates to companies that do. Family-friendly policies, such as flexible work schedules and on-site child care, have become vital in retaining talent. Businesses with robust family support systems report higher employee satisfaction and retention rates.

Retention

Employee turnover due to child care challenges is another hidden cost. Replacing an employee can cost a business up to 20% of that employee’s salary, which includes recruiting, hiring, and training new employees. This disrupts business operations and continuity, hindering a company’s ability to maintain consistent service levels and meet strategic goals.

Absenteeism and Productivity

Child care breakdowns often result in employee absenteeism and tardiness. These absences may decrease productivity, as well as lead to colleagues increasing their workloads to compensate, often resulting in increased overtime expenses.

According to research conducted by Child Care Aware, U.S. businesses lose approximately $4.4 billion annually due to employee absenteeism related to child care issues. In Oregon, this translates to decimated productivity as employees struggle to balance work and child care responsibilities. Women accounted for 82% of all child care-related absences in November 2022, significantly impacting productivity and raising operational costs.

The Impact on Working Families — Especially Women

High Cost of Child Care

Child care expenses in Oregon are among the highest in the nation. The average annual cost for an infant in a child care center in Oregon is about $23,250, representing 35.41% of the median household income. For many families, this represents a vast portion of their income, creating substantial financial strain.

Lost Wages and Career Opportunities

The high cost of child care forces many parents, particularly mothers, to reduce their working hours or leave the workforce entirely. This decision has long-term financial implications, including lost wages and career advancement opportunities. Mothers in the U.S. lose approximately $64.5 billion annually in wages due to lack of child care. Over time, this contributes to gender pay gaps and limits economic mobility for families.

Broader Social and Economic Consequences

Reduced Workforce Participation

Lack of affordable child care reduces labor force participation rates, especially among women. The labor force participation among women with young children is significantly lower than that of their male counterparts. This gap hinders economic growth, as a substantial portion of the potential workforce remains underutilized. Increasing access to affordable child care can boost our GDP by enabling more parents to work.

The Role of Businesses in Supporting Child Care

Benefits of Employer-Supported Child Care

Employers providing child care support experience numerous benefits. Companies like Patagonia and SAS have implemented on-site child care and flexible work policies, resulting in lower turnover rates and higher employee satisfaction. These companies report increased productivity and a stronger company culture. Additionally, businesses can take advantage of tax incentives for offering child care support, further reducing costs.

How can you help?

Advocacy and Policy Changes

Advocating for policy changes at the state and federal levels is a must. Businesses and individuals can support initiatives like the Child Care for Working Families Act, which aims to make child care more affordable and accessible. Engagement in local and national advocacy efforts can drive policy changes that benefit the entire community.

Community and Business Collaboration

Partnerships between businesses, government, and community organizations can address child care challenges. Collaborative initiatives, such as the Oregon Early Learning Division’s public-private partnerships, have successfully increased child care availability and affordability. These partnerships leverage resources and expertise from multiple sectors to create sustainable solutions.

How to Support Child Care Works

Child Care Works, an initiative of Oregon’s regional Child Care Resource & Referral agencies (CCR&Rs), advocates for accessible, quality child care for all Oregon children. Supporting Child Care Works involves participating in advocacy efforts, volunteering, and contributing to programs that enhance child care resources. Businesses and individuals can get involved by visiting the Child Care Works website (https://www.childcareworksfororegon.org/) and joining our efforts to improve child care accessibility and quality in Oregon.

Conclusion

The hidden costs of inadequate child care support in Oregon are far-reaching, affecting businesses, families, and the broader economy. By addressing these challenges through policy changes, business support, and community collaboration, Oregon can create a more robust and inclusive workforce, benefiting everyone involved.