Last updated on May 27, 2024

How do you measure the return on investment of child care benefits?

Child care benefits are becoming more popular among employers who want to attract and retain talent, support working parents, and boost productivity and engagement. But how can you measure the return on investment (ROI) of offering child care benefits to your employees? Here are some steps and tips to help you evaluate the impact and value of your child care benefits program.

1 Define your goals

Before you start measuring the ROI of your child care benefits, you need to define what you want to achieve with them. Do you want to reduce absenteeism and turnover, improve morale and loyalty, enhance recruitment and retention, or foster diversity and inclusion? Depending on your goals, you will need to identify the relevant metrics and indicators that reflect your desired outcomes.

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Carl C. Schuessler, Jr., DHP, DIA, GBDS

Managing Principal at Mitigate Partners | Delivering EMPLOYER-Built Health Plans | I Build Trusted Partnerships by Customizing Competitive Benefit Plans, Reducing Costs by Up to 38% and Saving Clients Over $100K Annually
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This is much longer than the 750 word limit. Measuring the return on investment (ROI) of child care benefits involves assessing the financial impact of such benefits against the costs incurred by the employer. Here's a general approach to measuring ROI for child care benefits: Calculate Cost of Child Care Benefits: Determine the total cost of providing childcare benefits to employees. This includes expenses such as subsidies for childcare, onsite childcare facilities, referral services, or flexible spending accounts for child care expenses. Estimate Employee Productivity: Analyze how child care benefits impact employee productivity. This can be done by comparing the performance of employees who utilize the benefits with those who do not.

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2 Collect data

The next step is to collect data on your current situation and your child care benefits program. You will need to gather information on your employee demographics, needs, preferences, and satisfaction, as well as your costs, utilization, and quality of your child care benefits. You can use surveys, interviews, focus groups, or other methods to collect feedback from your employees and child care providers. You can also use existing data sources, such as payroll, HR, or benefits systems, to track your expenses and usage.

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Ania Halama

Founder of Xpansion Alchemy | Spiritual & Integration Mentor 🌿🍄✨ I empower busy professionals to overcome limiting beliefs & fears, opening their hearts to align with their true purpose for a life full of abundance.
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Doing the upfront data gathering is so crucial for really understanding the child care landscape at your company. You don't want to just blindly implement new benefits based on assumptions. I'd recommend kicking things off with some employee surveys and focus groups to get a sense of the demographics, needs, and wish lists. Are folks primarily looking for infant care, after-school programs, backup care? Getting that qualitative feedback is gold. From there, you can dig into the numbers side - crunching payroll data, utilization rates for any existing benefits, cost breakdowns, etc. Having both the human insights and hard data gives you a really comprehensive picture.

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3 Analyze the data

Once you have the data, you need to analyze it to calculate the ROI of your child care benefits. You can use different methods and formulas to estimate the costs and benefits of your program, such as cost-benefit analysis, cost-effectiveness analysis, or net present value. You will need to compare the costs of providing child care benefits, such as fees, subsidies, administration, or infrastructure, with the benefits of offering them, such as reduced absenteeism, turnover, or recruitment costs, or increased productivity, engagement, or diversity.

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4 Benchmark the results

To put your ROI results into perspective, you need to benchmark them against other similar organizations or industry standards. You can use external sources, such as reports, studies, or databases, to find comparable data on child care benefits and their impact. You can also use internal sources, such as historical data, projections, or goals, to compare your current performance with your past or future expectations. Benchmarking can help you identify your strengths and weaknesses, as well as opportunities and threats, in your child care benefits program.

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5 Communicate the results

The final step is to communicate the results of your ROI analysis to your stakeholders, such as senior management, employees, or child care providers. You need to present your findings in a clear, concise, and compelling way, using charts, graphs, or stories. You also need to highlight the key insights, recommendations, or actions that you derived from your analysis. Communicating the results can help you demonstrate the value and impact of your child care benefits, as well as gain support and buy-in for your program.

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6 Improve your program

Measuring the ROI of your child care benefits is not a one-time exercise, but an ongoing process. You need to monitor and evaluate your program regularly, using the data and feedback that you collect. You also need to update and adjust your goals, metrics, and methods, as well as your costs and benefits, to reflect the changing needs and preferences of your employees and the market. Improving your program can help you optimize the ROI of your child care benefits and ensure that they meet your objectives and expectations.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How do you measure the return on investment of child care benefits?

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1 Define your goals

2 Collect data

3 Analyze the data

4 Benchmark the results

5 Communicate the results

6 Improve your program

7 Here’s what else to consider

Employee Benefits Design

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