Let’s set the context on care before we talk about employers. So when I think about care, I think about it as a trifecta of what parents want: access, quality, and affordability. Access would mean availability - where is it located? Is it close to home, in the community, or close to work, or on the commute route? What are the working hours?

Quality and affordability have a direct correlation, the higher the quality, the higher the costs. You have more spacious centers, better ratios, better attention to education, the higher the costs would be. From an affordability standpoint, we’ve always thought that there are two parties who can support the cost of care beyond the family - the government and the employer.

For Bright Horizons, we have a strategy of working in markets where one of the two payors, if not both, are vested and interested parties. By addressing the affordability of care, we address the quality of care.  As a mom, I will say this - I will not settle for less and I will always want more than what I can provide at home and I would perhaps grudgingly settle for equal.. So the key question is, when you want to provide quality care, how will you address the affordability dimension?

This question is where we see employers come in and play an outsized role in supporting affordability and quality of care, especially in the United States.

At Bright Horizons, we have about 1,400 clients across the board and most of them are fairly forward thinking in that they are not thinking about benefits as a tick box, but benefits as a differentiator. Benefits go a long way in terms of attracting and retaining talent and a lot of our clients reflect very hard about this.
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In order for employers to attract and retain more women in the workforce, I have this theory that you have to have inequity in benefits for more equity in the workforce.

You can’t just think about the needs for women in the workforce and say that it has to be equitable as a benefit. It isn’t going to work as the needs of women as a primary caregiver might be different from what her male counterpart needs. Or if the male is the primary caregiver, his needs might be different. Same gender couples, single moms, multi-generational families under one roof, are all forms of family these days.

Then, if you’re trying to attract a racially diverse population e.g., Asians, Hispanics, African Americans, care is culturally different in those communities. So there is a nuance in terms of how you have to think about it. You have to ensure that your solution takes into account different employee populations. Employers are already thinking through this, and entrepreneurs need to have the agility to keep up with their thinking and considerations.

Child care is still front and center in terms of a care solution, followed by elder care. But if we look beyond a solution standpoint and look at this from a customer centricity experience, the question becomes - how do you create solutions which allow people to be anchored  at home to enable employees to be productive at work? So what are those pieces that employees struggle with? It could be care, education, medical, mental health, etc. These various aspects will come forward at a certain point in time that results in a drop off from the workforce.

An employer’s agility needs to be directed towards that - what is the stated reason for an employee’s drop off and how are we going to solve for that at the moment?

The challenge for most employers is how to balance costs. Once you provide a benefit, you can’t just say, “Sorry, it’s no longer relevant and I’m going to pull this back.” So how do you play the balance of saying what am I providing in the moment vs. what am I providing as an ongoing support? Covid was a great example of having almost full freedom to say, as an employer, I can do something and hopefully, I can pull it back at the end of the event or when the context changes..

We haven't seen pullbacks yet. The reality is that benefits are such a small portion of the spend. Most employers will look to keep their benefits packages complete for their employees rather than reduce costs here. That’s my hypothesis right now. If we are headed into a deep recession, perhaps that will change but for now, we haven’t seen a pull back. What we have seen is employers wanting to be creative with solutions, cautiously.

Family concierge, for example, is a solution that Bright Horizons came up with during COVID-19 to help employees develop a care plan to maximize their benefits at any life stage.

Most employees are not even aware of a lot of benefits that are provided. Employees pay attention to medical and to dental, because those are seen as almost need-based, but there are other benefits one might forget about.
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We also had other clients who were trying to get creative around hybrid solutions. As they have been strategizing around the return to the office, many are trying to figure out how they can incentivize people who are in the office vs. people who are working remotely. Using benefits as a strategy for desired employee behavior is an interesting one.

I think that the three payors can work in tandem. It’s ideal. Singapore is a really good example of how the government provides different subsidies for infants and toddlers, and then in preschool it goes down. It’s also tiered based on income levels so that there is always affordability. In most of the Singapore Prime Minister’s speeches, he will talk about child care, which is really important because that then drives the government agenda towards saying, “How are we gonna invest?” Australia is a similar situation where the employer can always top up over and above what the government and families pay for.
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Our biggest challenge as an industry is that people still think of everything in the HR space as a cost. It’s almost ironic that we say that people are our assets, but we don't think of annual maintenance and all the things that you would attribute to assets.

You have an asset that’s valuable over its lifetime, so how do you do annual maintenance around it?

This notion of ROI associated benefits is still not fully seeped in. Ironically, you will see the knowledge working firms lapping up benefits much quicker. But these are the highest paid jobs and those people can actually afford care. Let’s say that a woman lawyer started in a law firm when she was 22. She had her first child when she was 32 as most women are having their children later, so she’s had 10 productive years in the firm. For someone to retrain and replace her is significantly higher, so the case to pay for three years of child care is very quickly justified in that environment, even though she has probably been paid enough at 32 to be able to afford the care herself.

That is not necessarily the case with more blue collar and frontline workforces. How do you actually extend the case?

This is where the government plays a role. So the three working in tandem is critical to find the balance of where and which kind of subsidy is required. When employers are looking at a minimum wage journal, most employers might have had to shift that $17/ hr to say $24/ hr if you start putting on the cost of care. It eventually seeps into consumer pricing and employers will have to pass on the costs at some stage. If anything, this is the place where the government has to play a role - how do we create affordable child care and mechanisms for people to access child care?

It’s very difficult for the employer to offer care to this workforce. It’s not tenable from a cost standpoint. If you take retail as an industry, you can think about the margins that they operate with. Anything that you are loading onto employee costs is going to come out of price or margin. In the inflationary and recessionary environment that we are in, it becomes a cyclical thing.

Quality has to be paramount.
Every family whose child, adult, or pet you are looking after is a unit of one. So how do you scale while retaining that quality of the unit of one. I think that this is a conundrum that most entrepreneurs in the space go through. There is no room for error and you have to get it right 100% of the time. You can’t say that I fulfilled 150,000 care sessions, but I got 10 sessions wrong. For those 10 people, it is their loved ones and their lives. It’s like healthcare, when it’s right, it’s powerful, but when it goes wrong, it’s fairly hyperbolic because it’s so personal and deeply emotional.

I’ve always seen this as a benefit for a care entrepreneur. There is so much you can do with a consumer who is so deeply engaged, which is a very different starting place from most other types of brands. Once you gain the trust of a consumer, you will have them for a very long period of time. It is a deep connection.