Latest / The Diversity Career Podcast with Fexingo: Inclusion, Equity, and Underrepresented Professionals / How One Firm Paid for Child Care to Retain Working Mothers
Transcript
- Lucas: There's a stat that I've been turning over in my head for a few days now. A mid-size accounting firm — Bennett Advisors, about 800 employees — decided to offer a flat $500 monthly child care subsidy to every employee with a child under six. No income cap, no waiting list. Just a direct payment. Luna: And I'm guessing the reason it caught your attention is that it actually moved the needle on retention among working mothers. Lucas: Exactly. Their numbers are public because the managing partner presented them at a conference last fall. Before the subsidy, annual turnover for mothers with kids under six was 28 percent. Two years in, it's down to 17 percent. That's an 11-point drop. Luna: Twenty-eight percent is rough. That's more than one in four women in that demographic leaving every year. Lucas: And it's not like Bennett Advisors had a toxic culture. Their overall turnover was about 15 percent, which is normal for accounting. But the mothers-with-young-kids cohort was bleeding out at nearly double the rate. The firm did an exit survey and the number one reason was child care cost and unpredictability. Luna: So they didn't try to fix culture or flexibility first — they went straight at the financial friction. Lucas: Right. And the way they funded it is kind of fascinating. They reallocated 5 percent of the partner bonus pool. So instead of a year-end bonus that gets split among about 40 partners, they put that money — roughly $1.2 million a year — into the subsidy program. Luna: That's a bold move. I imagine some partners weren't thrilled about taking a pay cut. Lucas: The managing partner said in the presentation that there was pushback initially. But he made the case that replacing a senior manager costs $35,000 to $50,000 when you factor in recruiting fees, training, and lost productivity. The firm was losing about 30 women a year in that cohort. That's over a million dollars in replacement costs annually. Luna: So the math basically forced itself. Spend $1.2 million on subsidies, save over $1 million in turnover costs — and that's before you account for the institutional knowledge walking out the door. Lucas: Right. And the actual cost per retained employee works out even better. They initially budgeted for about 200 eligible employees. Take-up was around 160 in the first year. So the firm spent about $7,500 per participating employee. But the saving per retained employee — well, if you keep even 10 more women who would have left, that's $350,000 in avoided turnover costs alone. Luna: And what about the employees? How did they use the money? Lucas: The firm didn't track that, which I think is smart. It's a flat payment, no receipts required. Some used it for a nanny share, some for after-school care, some for summer camp. One employee said she used it to pay her mother-in-law to watch the kids two afternoons a week so she could work late during tax season. Luna: That flexibility is key — $500 a month doesn't cover full-time daycare in most cities. But it can plug the gaps. Lucas: Exactly. And that's the insight, I think. The firm didn't try to solve child care completely. They just removed a specific pain point — the unpredictable expense that makes a working mother say 'I can't justify this job anymore because after child care I'm netting barely anything.' Luna: Let's talk about scalability. Bennett Advisors is mid-size, they have margin. What about a 50-person firm? Lucas: That's the question I had too. The managing partner actually addressed it. He said a smaller firm could do a sliding scale — maybe $250 per child for staff, $150 for associates — and fund it by trimming one partner's bonus or even a portion of marketing spend. He also suggested a cohort model where three small firms pool their subsidy funds. Luna: Or they could partner with a local daycare chain for a discounted rate. That's not a subsidy, but it's a similar effect. Lucas: Bennett actually explored that too. They found that a group discount didn't work because employees lived all over the metro area. Cash was simpler. Luna: I want to ask about the impact on men. Did the subsidy affect retention of fathers as well? Lucas: The data is less clear. The firm said turnover for fathers with young kids was already low — around 10 percent — and it didn't move much. But the interesting thing is that the number of fathers taking parental leave went up by 15 percent after the subsidy was announced. The managing partner thinks it signaled that the firm 'gets' caregiving, which made men feel more comfortable using the leave policy that was already on the books. Luna: That's a nice spillover effect. The subsidy acted as a cultural signal, not just a financial one. Lucas: Exactly. And it's consistent with research from the National Bureau of Economic Research. A 2023 paper found that when companies offer child care support, the largest retention gains come from women, but men also report higher satisfaction and lower burnout. It's not a zero-sum thing. Luna: So what's the downside? Why don't more firms do this? Lucas: The managing partner said the biggest barrier was simply that no one had ever proposed it. The partners had thought about flexible hours, remote work, lactation rooms — but nobody had said 'let's just give people cash for child care.' It wasn't on the menu of standard benefits. Luna: So part of the solution is just changing what we think of as a normal benefit. Lucas: Right. And the cost-benefit analysis is usually done wrong. Firms look at the $500 monthly per employee as an expense. They don't look at the turnover cost they're already incurring. Bennett's CFO built a model that showed the subsidy was break-even at 18 months if it retained just 12 women who would have left. They retained 18 in year one. Luna: That's the kind of concrete number that should make any CFO sit up and pay attention. Lucas: Exactly. And I think this model can apply beyond accounting — law firms, consulting, tech. Anywhere you have a high-skill workforce where training is expensive and turnover hurts. Luna: It's also interesting that they didn't tie it to performance or tenure. It was universal for all eligible employees. That probably reduced any stigma of 'I'm only getting this because I'm a parent.' Lucas: Absolutely. And the managing partner said that was intentional. He said 'we don't want people to feel like they're receiving charity. This is a business tool that helps us retain talent.' Luna: I want to circle back to something you mentioned — the exit survey that pointed to child care cost. How do you think that kind of data gets overlooked in so many firms? Lucas: I think companies do exit surveys, but they aggregate the data. They see 'compensation' as a top reason and assume it's about salary. But when Bennett's HR team broke it down by gender and parental status, the child care cost answer jumped out. It was specific to mothers with young kids. If you lump everyone together, you miss that signal. Luna: So the lesson is segment your data. Look at subpopulations. Lucas: Exactly. And then act on it. Bennett's story is a case study in listening to a specific pain point and designing a targeted, simple intervention. No new software, no consultants, no huge policy rewrite — just a check every month. Luna: It's almost frustratingly simple. But I think that's the point. A lot of DEI efforts get complicated and expensive, and sometimes the most effective thing is the most direct. Lucas: And if a listener is thinking about making a case to their own leadership, Bennett's ROI model is on their website. It's a public document. You could literally download it and use it as a template. Luna: That's a great resource. We'll link to it in the show notes. But before we wrap, I want to mention something that's top of mind for us. If this show has helped you think differently about your career or your team's retention strategy, we'd love your support. Lucas: We keep the podcast ad-free, and listener support is what makes that possible. If you're able, you can chip in at buy me a coffee dot com slash fexingo. No pressure at all — just a way to keep this conversation going. Luna: And every bit helps us keep digging into stories like Bennett's. So thanks for considering. Lucas: Alright, back to the takeaways. I think the biggest one is this: if you're a leader looking to retain women in your workforce, look at the specific financial friction that hits hardest for the subgroup that's leaving. It might not be salary. It might be child care. Luna: And the beauty of Bennett's approach is that it's replicable. The numbers work. The cultural signal is strong. And it's a concrete step, not a vague promise. Lucas: Exactly. I'll be curious to see if other firms follow suit over the next year or two. The data is out there. The template is out there. The question is whether leadership will look at the math and decide it's worth the reallocation. Luna: That's a question worth revisiting. Thanks, Lucas. Lucas: Thanks, Luna. And thanks to our listeners. See you next time.