When Retention Is the Strategy, Childcare Matters
Across industries, many organizations are quietly adopting a “low hire, low fire” approach to talent. With economic uncertainty lingering and the true cost of replacing experienced employees becoming clearer by the day, companies are hiring cautiously and doing everything they can to avoid unnecessary turnover. That reality shifts the strategic question from How do we attract talent? to How do we retain the people we cannot afford to lose?
Retention, not hiring velocity, has become the defining workforce challenge of this moment.
What drives retention? Many will start with pay. Of course, compensation matters. However, decades of workforce research show that once pay is fair and competitive, compensation alone rarely determines whether a worker stays. In fact, only a small share of workers – one in eight – leave a job primarily because of pay. More commonly, people change jobs because of poor management, a lack of flexibility, or an inability to integrate work with life responsibilities.
This pattern holds across sectors. McKinsey & Company’s research on frontline workers shows that meaningful work, schedule reliability, autonomy, and supportive management consistently outrank pay as predictors of retention, particularly in healthcare, education, manufacturing, and service industries.
At LINC, we encourage employers to think about retention through five core drivers:
- Fair, predictable compensation
- Schedule flexibility and autonomy
- Opportunities for growth and advancement
- A culture of trust, belonging, and respect
- Support for life outside of work
The fifth driver, support for life outside of work, can be vague. But for working parents, it is anything but abstract. Childcare is the number one cost for working families living paycheck to paycheck. Therefore, when it comes to attrition, caregivers naturally ask themselves, “Can I reliably care for my family and keep my job?”
Is addressing childcare needs a retention driver? The data is unequivocal: yes.
Caregiving pressures, especially access to affordable childcare, are among the leading reasons people leave the workforce altogether. According to Catalyst, a nonprofit focused on women at work, caregiving was the number‑one reason women exited the workforce in 2025, cited by 42 percent of women who left, compared with just 17 percent who cited pay as a main factor. That distinction matters. These are not employees shopping for better offers; they are being forced out by structural barriers.
Furthermore, a KinderCare survey cited in a 2024 report by KPMG “found that 72% of respondents say that if they knew they would always have quality childcare coverage, they would be able to focus better on their work.”
The cost of underinvestment in childcare amounts to $6.65 billion in lost earnings, productivity, and revenue in Pennsylvania, according to Investments in Caring PA, an initiative of the Pennsylvania Early Learning Investment Commission. Despite this, American workers’ access to employer-sponsored childcare is low. According to the Bureau of Labor Statistics, as of March 2023, only 13% of full-time and 6% of part-time private industry workers have access to employer-provided childcare benefits.
It is not that employers do not want to help. Most Pennsylvania employers are interested in helping working families address childcare needs, but 70 percent don’t know about available resources or how to get started.
In the past year, the policy landscape around employer-supported childcare has shifted, creating new possibilities for working families if employers act.
In 2026, the federal Employer‑Provided Child Care Credit (I.R.C. § 45F) was significantly expanded, making employer-supported childcare more accessible and financially attractive.
For organizations operating in the current low‑hire environment, this matters. Replacing an experienced employee routinely costs 50 to 200 percent of their annual salary. By contrast, investments in flexibility, caregiving support, and retention infrastructure now carry meaningful federal incentives that reduce financial risk.
At LINC, we see the strongest results when employers stop treating childcare as a fringe benefit and start recognizing it for what it is: workforce infrastructure. Like transportation, technology, or training, it determines whether employees can show up consistently and envision a future with their organization.
The Lehigh Valley has long prided itself on hard work, generosity, and strong family values. The opportunity before us is to align those values with strategy. Fostering a strong, resilient workforce rests on our community’s ability to ensure childcare needs are met for all families, including working families.
Support your employees by removing barriers to full workforce participation for caregivers in your organization. The time is now.
LINC is a Lehigh Valley-based nonprofit that envisions communities and workplaces where everyone feels welcome, gets rooted, and thrives. LINC partners with employers to attract and retain talent from diverse backgrounds from all over the world. To learn more, visit www.linc-lv.org. Compliance note: Consult your tax advisor before committing funds to ensure eligibility, documentation, and alignment with forthcoming IRS guidance. The IRS is expected to release additional guidance on the enhanced credit.
