Will investment in childcare bring women back to work?

U.S. infrastructure plan would encourage companies to construct onsite daycare

April 27, 2021

Millions of women have left the workforce in the past year, in many cases due to the pressures of childcare and remote schooling.

The U.S. government is betting that onsite childcare could help bring them back.

A proposed US$2.3 trillion infrastructure bill includes US$25 billion for a new Child Care Growth and Innovation Fund, which would provide cash to states to upgrade childcare facilities and build new ones in underserved areas. It would also create an expanded tax credit to encourage companies to build onsite facilities.

The issue is a timely one for many companies, which amid the gradual reopening of offices are looking at hybrid work models and flexible policies as one way to encourage parents to return to the office. Onsite childcare is a way to take that a step further to help retain and attract female talent.

“Many working mothers are challenged by a lack of childcare, pandemic or not,” says Julia Georgules, Director of Research, East and Canada, JLL.

While some women prefer the benefits of an office environment – in part because “face time” is often key to career advancement – others want and require greater flexibility.

“Onsite childcare solves both those problems,” she says.

Incentivizing investment

Government support for childcare can vary widely across countries. It’s mostly privatized in the U.S., and tends to be more centrally regulated in Europe. The Austrian government, for example, allocated €442 million (US$530 million) for the expansion of childcare services from 2008 to 2018. But the scale of the U.S. fund could be a game changer.

In the bill proposed by U.S. President Joe Biden, companies would receive half of the first $1 million they invest in construction, so up to $500,000 in tax credits.

Because daycare is typically at the ground level, and many office buildings are multi-tenant, it would be helpful to have incentives aimed at developers, Georgules says.

“JLL is working with a developer who is building a mixed-use office project with a daycare center,” Georgules says. “They’re betting on the idea that onsite daycare will be a very valuable amenity. When the space is leased, multiple companies could have the opportunity to subsidize daycare for their employees — a great company benefit.”

 As more companies focus on attaining environmental, social and corporate governance (ESG) targets, developers are more aware than ever of the "social” part of those investments. This could also help fuel childcare construction.

This is especially true considering that many centers shuttered during the pandemic. In Boston, for example, 20 percent of childcare centers impacted by COVID-19 haven't reopened, creating a dearth of options for working parents that can't afford nannies, Georgules says.

“ESG is a focus, and developers are trying to meet goals around carbon neutral footprints,” she says. “But diversity and inclusion — which includes equality for women in the workforce — is set to become part of the broader social impact criteria.”

Flexible culture

To prevent more women from leaving the corporate world, companies are realizing how important flexible work policies have become, says Julie Wilkinson, Global Product Manager, Workplace Experience, JLL.

 “As we talk to clients about reopening their offices and potentially adopting a hybrid work program, one of the issues that keeps coming up is the sheer number of women who have left or are leaving the workforce,” she says. “In order to retain women, it’s important not only to offer flexibility in theory but also to create an environment that nurtures it. For example, our Experience Anywhere product, a platform for wellness content distilled down into very short well-being breaks scheduled directly into people's calendars, creates a culture of break-taking.”

Onsite childcare is a further step.

“Everyone wants to reduce commute time,” Wilkinson says. “Onsite childcare significantly lessens the stress on parents and makes the commute more palatable because they’re eliminating part of that drive.”

Take Patagonia, which has offered on-site childcare since 1984.

“Patagonia has integrated children into the company culture,” says Amy Sjursen, Director, Architecture, Big Red Rooster. “It’s super common for parents to have lunch with their kids every day. They have after school programs once the kids age out of daycare and encourage spending time with kids during the day. All of it serves work life balance and gender equality.”

Looking for more insights? Never miss an update.

The latest news, insights and opportunities from global commercial real estate markets straight to your inbox.