Virginia Employer Child Care Solutions: Employee Benefits That Improve Recruitment and Retention
Looking for employer child care solutions in Virginia?
Thrive Birth to Five helps employers identify practical, cost-effective child care benefits that strengthen workforce recruitment, improve employee retention, and support working families. Whether you’re exploring the Virginia Employee Child Care Assistance Program, employer-sponsored child care, tax incentives, or partnerships with local child care providers, our team serves as a regional connector—helping businesses assess their workforce needs, navigate available resources, and connect with the right partners to implement solutions that fit their organization.
From small businesses to large employers, we make it easier to develop a child care strategy that supports your employees while strengthening your workforce and the regional economy.
Employer Child Care Benefits: Key Takeaways for Virginia Businesses
✅ Virginia employers report child care challenges affecting hiring, retention, employee work hours, and workforce stability.
✅ More than 70% of Virginia children under age six have all available parents in the workforce.
✅ Virginia has a new program for 2027-2028 called the Employee Child Care Assistance Program that enables the state, employer, and employee to all contribute to the cost of a child care spot for an employee.
✅ Employer-supported child care can generate measurable returns on investment through reduced turnover and absenteeism.
✅ You do not need to build an on-site child care center to support employees. Options range from referral services and stipends to cost sharing.
✅ Federal and Virginia tax incentives can significantly reduce the cost of employer child care investments.
✅ Thrive Birth to Five can help employers assess workforce needs and identify practical child care solutions.
How Child Care Affects Employee Recruitment, Retention, and Productivity
Child care is not just a family issue—it is a workforce solution and an essential part of the economic infrastructure that supports businesses, employees, and communities.
More than 70% of Virginia children under age six have all available parents in the workforce.1 When employees cannot find reliable, affordable child care, employers experience increased turnover, absenteeism, recruitment challenges, and lost productivity. Across Virginia and the nation, businesses are recognizing that investing in child care support can strengthen workforce stability while improving employee satisfaction and retention.
In Virginia:
- 81% of employers report child care impactshiring and retention 2
- 65% of employers reportworkers reduce hoursdue to inadequate child care options 2
- 86% of employers report employees struggle with child care expenses 2
- It costs families an average of $17,004 to access child care. To meet the Department of Health and Human Services’ 7% affordability threshold, a family of 3 would need to earn approximately $243,000 to afford care for one child at this cost. 2
Employers are not only affected by the child care crisis; they are uniquely positioned to be part of the solution. Offering child care support is a powerful talent recruitment and retention strategy with measurable return on investment — in some cases, up to 425%. 3
The question is not whether child care impacts your workforce.
The question is: What solution makes strategic sense for your business and workforce?
Learn more about child care supply and demand in your community:
1: Ready Regions ECCE Supply/Demand Dashboard, 2024, [Dataset], Virginia Early Childhood Foundation.
2: Virginia Early Childhood Foundation, Virginia Chamber Foundation, & Federal Reserve Bank of Richmond. (2025, December). Child Care is the Foundation of Virginia’s Economy.
3: Moms First & Boston Consulting Group. (2024). The Employee Benefit that Pays for Itself
Employer Child Care Solutions: Options for Every Business Size
Employers often assume that supporting child care requires building an on-site center. In reality, employer child care solutions can range from low-cost referral services to reserved slots and consortium models. The right approach depends on your workforce needs and size, business goals, location, and available resources.
| Strategy | Description | Employer Cost | Employer Effort | Employer Impact |
|---|---|---|---|---|
| Resource & Referral Service | Funding for services for employees to receive support and guidance when searching for child care | $ | Low | Low |
| Child Care Cost Share | Employer contribution toward cost of employee child care | $ – $$ | Medium | Medium |
| Guaranteed Slots | Employer underwriting tuition costs of child care slots at local operator for employee use | $ – $$ | Medium | Medium |
| Employee Dependent Care Flexible Savings Account (FSA) | Employer offering of and contribution into Flexible Savings Account for employees to use for child care | $ – $$ | Low | Medium |
| Child Care Pooled Fund or Regional Trust | Employer contribution of funding and/or real-property into pooled fund or regional trust to build child care supply for region’s workforce | $ – $$$ | Medium | High |
| Co-located Child Care | Employer repurposes existing or develops new facility space for on- or near-site child care for employees | $$ – $$$ | High | High |
| Employer Consortium Model | Multiple employers within the region funding a shared child care center for their employees | $$ – $$$ | High | High |
Source: Virginia Business Roundtable for Early Education (VBREE). (2026). Playbook for regions.
Virginia Employer Child Care Success Stories
Across Virginia, businesses of all sizes are discovering that employer-supported child care is more than an employee benefit—it’s a workforce strategy that improves recruitment, strengthens employee retention, reduces absenteeism, and helps employers stay competitive in today’s labor market. From hospitals and universities to manufacturers and small businesses, these Virginia employer child care examples demonstrate how organizations are partnering with child care providers and community organizations to create solutions that meet the needs of working families. Explore these real-world success stories to see how Virginia businesses are implementing employer child care benefits and achieving measurable results.
Employer Spotlights
On-Site Child Care: Bon Secours Family Centers
Challenge: Beginning in the late 1980s, Bon Secours Mercy Health noted recruitment and retention concerns for their clinical associates, due to challenges finding affordable child care that met their workforce’s needs.
Solution: For more than 30 years, Bon Secours Mercy Health has provided a variety of options for their working families on staff. In Virginia, the hospital system’s 3 on-site child care centers provide care for the clinical associate’s children and grandchildren. Bon Secours also offers flexible scheduling, back up child care, scholarships for lower-wage associates, extended hour care with dinner service, school age camps, assistance in coordinating services to meet children’s developmental needs, and a teen volunteer program.
Result:
- Over 300 children currently enrolled at Bon Secours Family Centers
- Reduced turnover for the clinical associates who utilize the Family Centers
- Positive impact on associate experience
For additional information, contact Samara Musselman, Administrative Director Bon Secours Family Centers at 804-594-4997 or Samara_Musselman@bshsi.org.
Child Care Partnership: Virginia Tech
Challenge: As the university’s population size increased, 76% of employee and student respondents said they needed or used some form of child care.
Solution: The university utilized a multipronged approach: 1) partnerships with 5 local child care centers to reserve spots for children of employees 2) offering backup child care 3) advancing the early educator workforce pipeline 4) providing a caregiving portal for families to find resources and sign up for programs.
Result:
- 247 children enrolled at child care centers
- 707 employees enrolled with a backup care partner
- Reported improvements in employee satisfaction and positive feedback on the increase in resources available to employees
Key Takeaways:
- Leverage existing local child care centers to partner with your business
- Mixing and matching solutions can be the best option for your workforce and business
Learn more: Community Child Care Partnerships at Virginia Tech
On-Site Child Care: Red Rooster Coffee Roasters
Challenge: A 48-employee company in rural Virginia struggled with workforce retention due to child care shortages.
Solution: The small business created an on-site child care provider, Yellow Hen Child Care, with the employer covering 70% of costs.
Result:
- 16 children served, with 65% of employees utilizing the benefit
- Recruitment and retention advantage in rural labor market
- Stable workforce operations
Key Takeaways:
- Small businesses can lead innovative solutions
- Rural child care investment is possible with the right partnerships
- Employer cost-sharing dramatically increases retention
Learn more: Red Rooster Case Study: On-Site Child Care for Securing Staff Loyalty
Innovative Programs
The City of Richmond made a historical $1,000,000 investment in the City of Richmond Early Childhood Care and Education Trust Fund, administered by Thrive Birth to Five to expand access to quality child care for families living in Richmond.
Click here to learn more about how the Trust Fund was initiated and how localities and businesses can replicate this model:
Virginia’s Employee Child Care Assistance Program
Virginia’s newly funded $25 million Employee Child Care Assistance Pilot Program offers employers a similar opportunity to support employees with child care costs without shouldering the full expense alone. By leveraging state funding, employers can strengthen recruitment and retention, reduce turnover, and demonstrate a commitment to working families. Funding is available on a first-come, first-served basis. Contact us at info@thriveb5.org to learn how your organization can participate in the program and incorporate child care assistance into your workforce strategy.
Employer Incentives
Federal and Virginia Tax Credits for Employer Child Care Investments
Recent expansions to the Federal 45F tax credits significantly reduce employer costs.
- Up to 50% credit for small businesses (gross receipts <$31M), $600,000 annual cap
- Up to 40% credit for medium to large businesses, $500,000 annual cap
- Employer coalitions and intermediary services now eligible
- Virginia also offers 25% tax credits up to $25K to establish child care facilities primarily for employees
- Bottom line: employers no longer need to build or operate their own child care facilities to qualify for federal child care tax credits.
Example: Large business (2,000 employees)
- Child care stipends for employees: $200,000
- Resource & referral: $50,000
- Total cost: $250,000
- Federal tax credits: 40% facility, intermediaries, and contract + 10% referral = $85,000
- Federal tax liability: $4,000,000 – $85,000 = $3,915,000
Example: Small business consortium
- Multiple small businesses sign a joint agreement with child care center to reserve and purchase slots for employees’ children and fund extended evening care
- If each business contributes equally: $30,000 for slots
- 50% credit rate for small businesses: $15,000 tax credit per business
Learn more about leveraging federal tax incentives for business child care solutions:
Thrive Birth to Five does not provide legal or tax advice. Consult an attorney or qualified tax professional for more information on or assistance with respect to the section 45F employer-provided tax credit.
Steps to Implement Employer Child Care Benefits
Employers engage in child care solutions at different levels based on workforce needs, geography, and business capacity. Thrive Birth to Five is available as a regional resource as you explore what may be appropriate for your organization.
Step 1: Assess Your Business Need & Capacity
Complete this 3-minute questionnaire to learn more about which child care benefit solution may be best for your business: https://employerchildcarenavigator.org/questionnaire
Step 2: Assess Your Workforce Need
It is critical to gather basic information about your employees’ child care experiences and challenges. You may start with a brief questionnaire or internal discussion to better understand how child care is affecting attendance, retention, and productivity.
If helpful, Thrive Birth to Five can share sample survey tools and examples used by other employers or help you implement your own employee survey to confidentially assess workforce child care needs. Understanding demand — including ages of children, schedules, and geographic patterns — can help clarify which options may be most relevant.
Survey Examples: Pulse Survey, Employee Child Care Navigator, Tootris Sample Survey
Step 3: Review Available Resources and Incentives:
As you consider possible approaches, review available federal and state tax incentives, public-private partnership opportunities (such as the Employee Assistance Pilot Program), and ROI tools.
To see how offering child care solutions benefits your business, implement Mom’s First employee survey and complete the ROI calculator: Mom’s First Survey & ROI-Calculator.xlsx
Step 4: Select the Right Strategy for Your Business.
Based on your business and workforce survey data, you may explore options such as:
- Flexible scheduling
- Child care stipends
- Contracted slots with local providers
- Participation in a multi-employer consortium
- On-site or near-site child care models
- Cost sharing via the Employee Child Care Assistance Pilot Program
Thrive Birth to Five does not promote a single model but can help provide context about what has worked in similar communities for comparable businesses and how various approaches may strengthen the overall child care system.
Step 5: Implement with Regional Support
Connect with Thrive Birth to Five, which serves as a regional coordination partner — connecting employers with providers, resources, and implementation support to ensure your child care investment is both strategic and sustainable.
Child care is not a perk.
It is a workforce investment strategy that strengthens recruitment, retention, and regional economic growth.
Thrive Birth to Five helps Virginia employers identify affordable child care strategies that improve recruitment, reduce turnover, and support working families. Whether you’re interested in the Employee Child Care Assistance Program, employer partnerships, tax incentives, or employee surveys, our team can help you identify the best solution for your workforce.
Schedule a conversation with us by contacting info@thriveb5.org.
Frequently Asked Questions About Employer Child Care Solutions
Why should employers care about child care?
Child care challenges affect employee attendance, productivity, recruitment, and retention. When employees struggle to find reliable care, businesses often experience increased absenteeism, turnover, and workforce disruptions. Supporting child care can help strengthen workforce stability and improve business performance.
What are employer child care benefits?
Employer child care benefits are programs designed to help employees access affordable, reliable child care. Examples include child care stipends, dependent care FSAs, resource and referral services, contracted child care slots, consortium models, and on-site or near-site child care.
Do employers need to build their own child care center?
No. Many employers choose lower-cost solutions such as referral services, partnerships with local providers, guaranteed child care slots, dependent care FSAs, or participation in a shared employer consortium.
Can employer-sponsored child care improve employee retention?
Yes. Child care support can help reduce workforce disruptions, lower employee turnover, improve attendance, and increase employee satisfaction, making it a valuable recruitment and retention strategy.
Are there tax incentives available for employer child care investments?
Federal 45F tax credits and Virginia state tax incentives may help offset the cost of eligible employer child care investments. Employers should consult qualified tax professionals or legal advisors for guidance related to their specific circumstances.
How do I know what type of child care support my employees need?
Employers should begin by surveying employees to understand child care challenges, scheduling needs, ages of children, and barriers to accessing care. This information helps identify the most effective support strategy.
How can Thrive Birth to Five help employers?
Thrive Birth to Five serves as a regional partner connecting employers to child care resources, providers, workforce assessment tools, implementation guidance, and information on available incentives and partnerships.
What is the return on investment for employer child care benefits?
Research indicates that employer-supported child care can generate measurable returns through reduced absenteeism, lower turnover costs, improved recruitment, and increased employee productivity. ROI varies depending on the strategy selected and workforce needs.
Employer Child Care Resources and Tools:
The Business Case for Child Care
Virginia Employer Child Care Survey Findings
Childcare Innovation Through Public-Private Partnerships
U.S. Chamber Foundation Solutions Bank
ECCE Gap Analysis Story Maps: Access to Child Care in Ready Region Central
Investing in child care: How U.S. businesses can unlock up to $70 billion by providing child care benefits
The Employee Benefit that Pays for Itself
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