By some accounts, the vast majority of offices are set to bring workers back into physical offices within the next year. It’s a trend so prominent that it has its own shorthand in the HR space: return-to-office, or “RTO.”
Much has been made of the resistance by employees who enjoyed some degree of flexibility in the years since the start of the COVID-19 pandemic. A recent Integrated Benefits Institute survey found that 47% of employees would either call it quits or begin looking for a new job if their employers mandated a full-time RTO policy. Such policies compete not only with employees’ serviceable home offices but also with the convenience afforded by hybrid and remote work.
Caregivers may particularly benefit from flexible work options. A 2022 joint survey of employee caregivers by Care.com and benefits platform Mother Honestly found that 76% said remote work had improved their quality of life, and a nearly identical 77% said that remote work had made career advancement opportunities more equitable.
The inability to balance work and caregiving needs has consequences for both individuals and organizations. Caregiving — be it for an employee’s own child, a family member or acquaintance — is the primary reason why more than one-third of U.S. adults do not participate in the labor force, according to research published Sept. 1 by the Bipartisan Policy Center and Artemis Strategy Group.
The coming months may make things even more dire for employees who are caregivers for children. In what some commentators have described as a “child care cliff,” emergency funding for child care programs passed as part of the American Rescue Plan is set to expire at the end of the month.
While full-time remote work is set to go away for some workers, their caregiving needs will not. Child care concerns, specifically, have supplanted concerns about COVID-19 for many employers, said Cat Torres, health and welfare sales consultant at benefits administration firm Sentinel Group.
“Employees are using their voices right now,” Torres said, adding that Sentinel Group is increasingly fielding questions from clients about what options they have to support caregivers.
Dependent care FSAs could be lever to pull
Dependent care flexible spending accounts allow employees to bank pre-tax wages for certain caregiving needs, but they come with costs that some workers may not be able to live with.
FSAs have low utilization rates in part because they constitute a “double hit” on employees, Torres said. Workers fund the accounts prior to their use, reducing their take-home pay, but also pay their providers out of pocket before applying for reimbursement via their FSAs.
That dynamic has led some employers to consider contributing to dependent care FSAs in order to make the benefit more affordable to a greater number of workers, Torres noted. Employers can even structure their contributions so as to provide more funding for lower-income workers.
“If someone is earning more than $60,000 annually, they only get $50 per month,” said Torres, providing an example of how employers could structure FSA contributions. “Anyone below that receives a $1,000 contribution per month.”
That kind of funding could prove to be a difference-maker for caregivers. According to Care.com, the average weekly cost of day care in the U.S. was $284 for infants in 2023, up 53% from a decade ago, while the average weekly cost of family care centers was $229, a mark-up of 80% during that same period.
FSAs are subject to IRS contribution limits — for 2023, participants may contribute up to the annual maximum of $5,000 per household or $2,500 if married, filing separately — but employer funding can still serve to aid workers who require the most assistance, according to Torres.
“The majority of HR teams I speak with, they get it. They know the value of putting dollars into their employees,” she said. “They don’t have a hard time convincing their leaders either.”
Transportation, backup services on the radar
Dependent care FSA contributions have not frequently been leveraged as part of RTO strategies, Sander Domaszewicz, senior principal, total health management at Mercer’s MercerWELL practice, told HR Dive in an email. But the firm has seen more employers seek to relieve workers’ caregiving and financial burdens by making benefits more affordable and accessible.
Transportation benefits present one way to address needs relevant to RTO mandates. A recent Mercer survey of 721 employers found that 18% of organizations with 500 or more employees either currently provided a transportation benefit or would do so in 2024, including 21% of organizations with 5,000 or more employees.
Mercer also found that more than one-third of employers with 5,000 or more employees currently offer access to backup child care services or would do so in 2024, with a similar share saying the same of child care referral or consultation services. Other caregiver-specific offerings included special needs, tutoring and educational support; child care subsidies; and on-site child care.
“Understanding the unique needs of their workforce is critical for employers,” Domaszewicz said. “The objective is to maximize employees’ take-home pay, especially as returning to the office involves additional costs, like commuting or buying meals outside the home. Even if there’s a limited budget to enhance benefits, offering flexibility itself can go a long way in addressing financial stress.”