Most parents would probably agree that workplace childcare initiatives are helpful to them personally, but relatively little is known about these initiatives’ effects on organizations as a whole.

New research by Matthew M. Piszczek at Wayne State University, recently published in the Journal of Management, reveals organizations do benefit, as childcare initiatives are associated with lower collective turnover rates for women in years following their introduction. The results also show that higher female collective turnover rates are associated with a higher likelihood of an organization adopting a childcare initiative in subsequent years.

In other words, organizations that need to retain women are more likely to create childcare initiatives—and these initiatives are likely to work.

Organizational childcare initiatives are defined as “practices designed to mitigate the financial, temporal, or emotional demands associated with being a child caregiver.” Such initiatives include free or low-cost on-site childcare, childcare subsidies for third-party care, and referrals to childcare services. Previous research on work-family practices has largely focused on individual employees as opposed to organizational performance. Few studies have tested the effects of childcare initiatives in particular and are largely inconclusive.

In his paper, “Reciprocal Relationships Between Workplace Childcare Initiatives and Collective Turnover Rates of Men and Women,” Piszczek explored the relationship between organizations’ childcare initiatives and collective turnover rates of men and women by assessing turnover in German organizations between 2002 and 2012. He utilized context-emergent turnover theory, which is a theory that explains how individual turnover affects collective human capital quality and quantity at the unit level.

“Most relevant to this paper, the theory helps explain how childcare availability affects collective turnover, even among employees without children,” he explained.

The study examined 1,428 establishment-year-level observations of a childcare initiative in place, making it one of the only large-scale studies of childcare initiatives across multiple industries and throughout an entire economy. In light of the results, companies should consider options to facilitate childcare for their employees, especially if turnover is high, Piszczek said.

“The study provides some evidence that employees value this benefit enough that its presence can predict collective turnover,” he explained. “Organizations should be sure that these benefits are accessible to employees. Some companies have scaled back their childcare initiatives, and this is sure to frustrate employees who depend on them. While the study is at the establishment level, I think it speaks to the broader need for managers to help employees manage their work and family demands. Research has shown time and time again that managers hold a lot of authority—both formally and informally—about how employees can manage these often conflicting demands. Signaling to employees that you can help support management of these conflicts is important, even to the employees who are not actively experiencing role conflict.”

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