Childcare is a growing workplace problem. Here's what employers can do

• Key Insight: The real reason childcare has overtaken retirement benefits as a top priority for parents.
• What's at Stake: Employers facing massive productivity losses and turnover if parental childcare struggles remain unaddressed.
• Forward Look: Brace for enhanced federal tax credits raising maximum employer childcare credits in 2026.
  Source: Bullets generated by AI with editorial review

As summer winds down and kids head back to school, working parents may be trading one set of childcare challenges for another. 

A new KinderCare Confidence Index finds that unreliable childcare is fueling burnout among working parents, who spend more than one-third of each month feeling completely burned out. Sixty percent say growing parenting pressures are hurting their mental health.

The childcare scramble remains particularly difficult for parents of children under 5, who are more likely to struggle to find consistent, high-quality care. Among more than 2,500 parents surveyed, 81% said they are constantly thinking about childcare gaps, while 76% expressed extreme frustration with the lack of support available to parents in the U.S.

The strain doesn't stop at home. A recent study from nonprofit Moms First found that 90% of parents have experienced a workforce disruption because of childcare challenges, costing U.S. businesses as much as $70 billion annually through lost productivity, turnover and absenteeism.

For employers, the data points to a growing opportunity to support working parents. Nearly 8 in 10 parents said they would be more loyal to an employer that offered stronger support, while more than one-quarter said they have considered quitting or left a job because of childcare challenges.

"When an organization offers childcare benefits, they demonstrate that the employer understands the needs of today's workforce and is committed to helping employees succeed both professionally and personally," said Dan Figurski, president of KinderCare for Employers and Champions.

Here are some other issues and trends shaping the childcare industry:

Childcare a top workplace perk

Childcare has overtaken retirement benefits as a top workplace priority for working parents, according to KinderCare's 2026 Confidence Index. While 85% say dependent care benefits should be considered essential, only about one-third of employers offer them.

The lack of reliable care is also disrupting work, with parents reporting missed days, reduced hours, and career changes. For employers, stronger childcare support could be a retention tool, with 79% of parents saying they would be more loyal to a company that better supported them as a parent.

Read more: Summer's here: Time to highlight these helpful benefits

What working parents want from their child care benefits

From child care desert to on-campus school: An employer's solution for working parents

45F tax credit gets a boost

The enhanced federal 45F Employer-Provided Child Care Tax Credit could make childcare benefits more affordable for employers in 2026 and beyond. The changes raise the maximum credit to $500,000, or $600,000 for eligible small businesses, and increase the share of qualifying expenses that can be credited.

Benefits leaders can also explore combining the federal credit with potentially stackable state credits and pairing childcare support with parental leave benefits. The goal: make care more accessible while strengthening retention and easing employees' return to work.

Read more: Expanded child care tax credit a game-changer

At this childcare center, time off is mandated to ensure employees unplug

How off-hours care options help working parents remain present all day

As parenting support fades, how employers can fill the gap

The "village" that once helped working parents manage childcare is shrinking, according to Bright Horizons' 2026 Modern Family Index. Eighty-one percent of working parents say their support network has declined compared with previous generations, while 65% want employers to play a larger role in providing childcare resources.

The need is compounded by rising costs and competing caregiving responsibilities. Full-time childcare can cost $6,552 to $15,600 per child annually, and 25% of working parents are also providing unpaid care for an older parent or relative. Employers can help fill the gap through benefits such as on-site and community-based childcare, backup care and other caregiving support — potentially easing employees' stress while improving productivity and retention.

Read more: From child care desert to on-campus school: An employer's solution for working parents

'Anyone can offer a child care benefit': Why KinderCare wants child care for all

8 mistakes that make employee child care benefits programs expensive and ineffective