Helping employees with family care

Monthly Labor Review, Sept, 1990 by Stephanie L. Hyland

of the more noteworthy recent developments in employee compensation practices has been an increase in the number and types of benefits offered by employers. In the postwar period, companies have offered a fairly standard package of benefits emphasizing health and life insurance, retirement income plans, and paid leave such as vacations and sick leave. Several other common benefits such as severance pay and employee discounts have a long history, but these items are often of secondary value to the employee. In the work environment of today, however, employers are beginning to recognize another need among their labor force: the need for child care and related benefits to assist working parents.

These developments reflect several labor force trends. The increasing presence of women in the work force and the rise in the proportion of families in which both parents work outside the home have led to greater emphasis on providing family-related benefits, such as child care and parental leave. In a related development, the aging of the population and advances in medicine have led to increasing numbers of workers who must care for elderly dependents. New benefit plans are also reflecting these trends.

This article analyzes several employee benefits that have recently grown in importance at least partly as a result of these labor force developments. Data are from the Bureau of Labor Statistics' annual Employee Benefits Surveys. The most recently completed survey, for 1989, provides representative data on 32 million fulltime employees of private industry establishments employing 100 workers or more.(1) Data are collected on the incidence and characteristics of a variety of employer-sponsored benefits, including health care coverage, life insurance, retirement and capital accumulation plans, disability coverage, and leave benefits, in addition to the benefits discussed in this article.(2) (See table 1.) Labor force developments In the past, there was little need to include family-related benefits in a compensation package, as the spheres of work and home were kept separate. The typical American family consisted of a husband, a wife, and several children. The man was the breadwinner, while the woman remained at home and took care of the children. The structure of the American family has been changing, however, and the traditional distinctions between work and home have been blurring. In 1980, both the husband and the wife worked in 52 percent of families; by 1988, that proportion had risen to 63 percent. For these families, arrangements must be made for the care of the children during the day. Additionally, the number of single-parent households has risen 23 percent since 1980.(3) In these cases, the head of the household, usually a woman, has no choice but to work. Reliable, affordable child care becomes a necessity.

The number of women in the work force, especially those with children, is increasing steadily. In 1975, there were 13 million women with children in the labor force. By 1988, that number had risen to more than 20 million. Almost three-quarters of these women were working full time. Eight million had children under 6 years of age-too young to be in school during the day.(4) And not only are more women working, but their relative presence in the labor force is growing. In 1976, women represented 40.5 percent of the labor force. That proportion grew to 45.0 percent in 1988 and is projected to increase to 47.3 percent by 2000. Furthermore, projections indicate that women will account for two-thirds of the net increase in the labor force in the next 10 years.(5) Child care assistance As more women enter the labor force, and the demand for child care increases, employer-assisted child care may become an increasingly powerful incentive for jobseekers to choose one firm over another. In 1985, only I percent of full-time employees in medium and large establishments offered child care assistance. By 1988, that number had risen to 4 percent and in 1989, to 5 percent.

There are a variety of ways companies can provide child care assistance, each with its own advantages and disadvantages. One way is to allow employee flexibility on work schedules. In 1989, 11 percent of workers covered by the Employee Benefits Survey had the choice of flexible work schedules. These flextime plans enable the worker to vary the number of hours worked each day. Generally, employees must work a core of hours during midday and may vary the time they begin and end work. Allowing the employee to come in earlier or later than normal working hours helps many parents trying to juggle the demands of family and work.

Employers may choose to become directly involved with the provision of child care in a number of other ways. One approach involves employer oversight of the establishment and operation of a day care center for the employees' children. The availability of these centers, which can be either on the employer's premises or offsite, is thought to improve productivity and morale, reduce absenteeism, and solve problems with the accessibility and quality of care. This option is not suited to all employers, however, because of the considerable financial investment and administrative burden involved.(6)