BUSINESS INVESTMENT IN EARLY CHILDHOOD: POLICIES AND PROGRAMS

Support for quality ECD also leads to improved outcomes in the broader economy. Investments in every sector of ECD services have been shown to reap significant economic returns, resulting in gains for families, communities, and economies. Allowing millions of children to continue to receive inadequate care diminishes their future income, dampening GDP growth in forgone productivity. In some cases, the lost GDP growth from failing to support ECD services is equal to double the current total amount spent on health.

Investing in comprehensive ECD programs is an opportunity for businesses to both multiply the positive outcomes of existing investments in health and education and help to develop a more productive, skilled workforce. At the same time, investing in policies that support families and community in the workplace can have significant immediate benefits on employee productivity and performance.

• In the short term, implementing ECD-friendly policies reduces employee absenteeism and increases retention, morale, and loyalty; improves productivity; attracts the best employees; and increases company competitiveness.

• In the long term, investing in ECD contributes to the development of a skilled and healthy workforce, leads to better outcomes for children, and improves social and economic equity. It is also an investment that sees a high rate of return, improved gender equity, and improved company reputation in the local community.

Investing in early childhood development (ECD) makes good business sense. There are many simple ways for companies to do this through policy, practice, and direct investment in their communities. There are both short- and long-term benefits from making this investment.

EARLY CHILDHOOD DEVELOPMENT IS A SMART INVESTMENT THE EARLIER THE INVESTMENT,

THE GREATER THE RETURN

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Prenatal Programs

Programs targeted toward the earliest years

Preschool Programs

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WHAT IS EFFECTIVE ECD? WHAT ARE THE COSTS OF NOT INVESTING?

Effective ECD initiatives support healthy growth

by integrating all of the things that children, their

mothers, and their caregivers need, including

play, early learning, childcare, maternal and child

health, protection, and nutrition. Quality ECD

interventions lead to better school readiness

and academic achievement, and help develop

essential skills that are key to success both in

school and in the workplace.

Not investing early can have long-term negative effects on a child’s educational

achievement, health, mental and emotional well-being, and behavior, with

consequences for the development of a skilled workforce. In the developing

world, 250 million children under five are currently prevented from reaching

their full developmental potential by poverty, insufficient nutrition and health

services, and inadequate cognitive stimulation.1 UNICEF estimates that unless

ECD provision accelerates, by 2030 almost 70 million children may die before

the age of five, with children in sub-Saharan Africa 10 times more likely to die

before their fifth birthday than children from high-income countries.2

www.gbc-education.org | /GBCEducation | @gbceducation

• REDUCED ABSENTEEISM. Employees that have access to reliable

childcare options and workplace flexibility are significantly less likely to

miss work or arrive late.3

• IMPROVED PRODUCTIVITY. Employees that are less stressed about

childcare and feel they have more control over their work-life balance can

better focus on their work and be more productive, increasing employee

effectiveness4 and work quality.5 One study of a call center in China found

that productivity improved by 22% when employees were allowed to

decide their own work location.6

• ATTRACT THE BEST EMPLOYEES. Studies have routinely shown that job

candidates highly value family-friendly policies7 and are often willing to

sacrifice a lower salary in return for family-friendly benefits.8 One study

finds that nearly 50% of working parents report turning down a job that

they wanted because the situation would not work for their families.9 With

these policies in place, businesses become more appealing places to work

and therefore recruit the best talent.10

IMPROVED EMPLOYEE RETENTION. Family-friendly policies increase

employee retention and incentivize women to return to work after

maternity leave. The reduction in employee turnover lowers the costs

of hiring and training new employees and means companies retain the

knowledge, skills, and institutional memory of a veteran worker.11

• IMPROVED EMPLOYEE MORALE AND LOYALTY. Employees that feel their

employer values their work-life balance have better morale and loyalty

towards their company, resulting in greater productivity and job satisfaction

and lower turnover and burnout.12 Employee engagement has a significant

impact on the bottom line, as “employees most committed to their

organizations put in 57% more effort on the job — and are 87% less likely to

resign — than employees who consider themselves disengaged.”13

• INCREASED COMPETITIVENESS. Research has shown that “firms that

invest in their workforce with higher pay, fuller training, better benefits, and

more convenient schedules outperform their competitors.”14

Short-term Benefits of Business Investment in Early Childhood Policies and Programs

Long-term Benefits of Business Investment in Early Childhood Policies and Programs

• DEVELOPMENT OF A SKILLED WORKFORCE.15 Children who take part in

early childhood programs are more likely to enter primary school, less likely

to repeat a grade or drop out, and tend to earn higher grades and develop

better social-emotional skills such as teamwork and self-discipline.16

Investments in ECD lead to a more skilled, competent, and equitable

workforce that is better prepared to meet the professional challenges of

the 21st century and reduces the high costs of training necessary when

employees have received an inadequate education.17

• HIGH RATES OF RETURN. The earlier the investment in a child’s human

capital, the greater the return on that investment. In contrast, failure to

invest in quality ECD for all costs economies big, reducing GDP, depressing

adult wages, and depriving countries of human capital.

• BETTER OUTCOMES FOR CHILDREN. Paid leave, health benefits, and

parental involvement in the care of young children leads to better health

and development outcomes such as higher birth weight,18 deeper family

bonds, better school readiness, and increased family stability.19

• HEALTHIER WORKFORCE. Investments in health care, nutrition, water

and sanitation, and quality care programs lead to healthier pregnancies,

healthier children, and healthier employees.20 This improves worker

productivity and reduces the economic costs of poor health, including loss

of human capital and higher health care expenditures.

• INCREASED ECONOMIC GROWTH. Children at risk of poor development

due to poverty could lose an average of 26% of their adult income every

year, trapping families in the cycle of poverty. Moreover, the costs of not

improving early childhood development outcomes for all children are

estimated to be up to twice the amount of governmental expenditure

on health.21 Investments in children’s healthy development are therefore

investments in long-term economic growth and poverty reduction.

• IMPROVED SOCIAL AND ECONOMIC EQUITY. Children from

disadvantaged backgrounds benefit the most from early years

interventions, gaining developmental ground not only in nutrition and

health outcomes but also in cognitive development, school achievement,

and noncognitive skills. Investment in early childhood development

therefore helps to close the achievement gap and to prevent the potential

loss of talent and economic production that occurs when children are ill or

malnourished, die young, or are excluded from learning.22

• IMPROVED GENDER EQUALITY. Access to affordable childcare and

preschool options allows mothers, grandmothers, and older sisters to

work and attend school rather than staying home with young children.

Investment in early childhood development offers the opportunity for more

girls and women to become educated, enter the workforce, and contribute

their skills to the local economy, helping close the gender gap in health,

education, and professional achievement.23 Additionally, better-educated

girls tend to raise healthier children and earn more as adults.24

• BETTER STANDING IN THE COMMUNITY.25 By supporting local early

childhood initiatives and investing in better quality of life for young

children, businesses improve their reputation, leadership, and relationship

with local communities26 and can increase brand visibility and customer

loyalty.27

2 www.gbc-education.org | /GBCEducation | @gbceducation

3

WHAT CAN BUSINESS DO TO SUPPORT EARLY CHILDHOOD?IMPLEMENT FAMILY-FRIENDLY POLICIES

Balancing work and home responsibilities is a significant challenge for working caregivers. Concerns over childcare — whether it be undependable daycare options or the sudden need to care for a sick child during a work day — are a significant source of stress for parents and reduce employee focus, productivity, and effectiveness. Employers can institute a wide range of family-friendly policies to support working parents and ensure young children receive the care they need for healthy growth, while simultaneously improving employee retention and performance. Further, studies have shown the benefits of these policies balance or outweigh their costs.28 The diverse range of options means that all companies, small and large, can choose policies that work for both them and for their employees.

Create leave policies and flexible working options that help working parents balance professional and personal responsibilities.

Educate employees on safe pregnancy, breastfeeding, and early childhood development.

Provide space and time for working mothers to breastfeed or express milk.

Offer quality health benefits to employees and their dependents.

Support employees’ access to quality, affordable, dependable childcare.30

• Offer paid maternity, paternity, and adoption leave.• Offer paid sick leave for parents to go for a routine doctor visit, care

for a sick child, or bring a child to the doctor for urgent care.

• Offer flextime or compressed work options.29

• Offer telecommuting options.• Consider part-time or job-sharing arrangements for new parents.

• Through posters, leaflets, brown bag lunch seminars, and health resources, ensure parents are well informed about health care during and after pregnancy, the importance of breastfeeding, and local

parenting and community resources.31

• Educate managers on how to best support pregnant women and working parents. Without full buy-in from management and a supportive attitude from supervisors, employees may not feel comfortable utilizing family-friendly policies.

• Provide clean, private lactation rooms where mothers can nurse children or express milk.

• Give employees paid breaks to breastfeed.

• Foster a company culture that encourages and promotes breastfeeding.

• Offer a variety of high-coverage plans, where employers cover a large percentage of the cost or offer employees options to save and offset out-of-pocket costs.

• Support maternal and paternal health by providing in-house access to nutritious food, exercise facilities, and other wellness services.

• Invest in improving and expanding local childcare facilities in the community, so parents have affordable, quality options available.

• Partner with a local care provider or nonprofit to subsidize or guarantee spots for employees’ children.

• Issue childcare vouchers to employees that subsidize care at the provider of the employee’s choosing. This offers greater choice for parents on program and location.

• Create an on-site care center, either free for employees or fee-based. On-site care is extremely convenient for employees and can conform to the specific working hours of the business.

• Companies that cannot afford to create a care center on their own can pool resources to jointly establish or support one.

INVEST IN ECD IN LOCAL COMMUNITIES

Businesses can also support ECD through investments in local communities or even globally. Businesses have a myriad of options for engaging in early childhood in local communities, which can be tailored to the company’s size, industry, and desired level of involvement. Early investments not only offer the best opportunity for maximum impact, they also lead to healthier communities, support better learning outcomes, diminish poverty and inequality (and their economic costs), and foster a more skilled future workforce. Further, by going into communities to assess what services are needed, companies establish themselves more firmly as part of the community, which deepens their relationship with communities and fosters positive brand image and customer loyalty.

Invest in development, maintenance, and running of high-quality childcare facilities and preschools in local communities.

Invest in missing elements of early childhood development services.

Ensure business practices are child friendly.34

• Support facility construction, expansion, and maintenance.• Invest in teacher training and salaries.

• Subsidize fees for low-income and marginalized children.• Support creation and purchase of play and learning materials.

• Invest in play and learning materials for health clinics, daycare centers, preschools, and community centers.

• Build water and sanitation facilities at health clinics, schools, and care centers to protect children’s and community’s health and hygiene.

• Provide nutritious meals for children at daycare centers and preschools to safeguard their healthy growth.

• Support health care interventions at daycares and preschools such as routine check-ups and vaccinations.

• Ensure supply chains are free of child labor.• Label products clearly and fairly.• Take care that children are not exploited in marketing campaigns.

Ensure child models and actors are paid well, protected from abuse

and exploitation, and work no more hours than is permitted by law.• Certify products and services are safe for small children and go

through rigorous research and testing that complies with national and international standards.

• Counsel local service providers on how to improve business practices, expand services, and ensure financial sustainability.

• Provide advice on good management, tax code, sustainability, supply chains, human resources policies, and marketing.

• Develop new or adapt existing healthcare products and services to reduce costs, increase safety, and better reach children in resource-poor settings.

• Adjust value chains to local markets to lower costs and better address

the health needs of poor and hard-to-reach women and children.

• Invest in fortifying existing food products and sourcing grains from

farmers who grow micronutrient-enriched staple crops.

Provide business expertise to support the development and improvement of local early years services.32

Invest in research and development to create better ways to deliver existing services or find new treatment and prevention options in support of healthy early childhood development.33

Engle, P., Fernald, L., Alderman, H., Behrman, J. O’Gara, C., Yousafzai,A., Cabral De Mello, M., Hidrobo, M., Ulkuer, N., Ertem, I., Iltus, S. (2011).”Strategies for Reducing Inequalities and Improving Developmental Outcomes for Young Children in Low-income and Middle-income Countries.” The Lancet 378(9799): 1339-353. And Engle, P., Black, M., Behrman, J., Cabral De Mello, M., Gertler, P., Gertler, L., Kapiriri, L., Martorell, R., & Young, M.E. (2007). “Strategies to Avoid the Loss of Developmental Potential in More than 200 Million Children in the Developing World.” The Lancet 369(9557): 229-42.UNICEF. (2016). “The State of the World’s Children: A Fair Start for Every Child.” (Pp. vi.)US Department of Treasury. (1997). “Investing in Childcare: Challenges Facing Working Parents and the Private Sector Response.”Pp. 16.University of Kansas. (2016). “Chapter 25: Promoting Family-Friendly Policies in Business and Government” in Community Tool Box.BBC News. (2002). “Family Friendly Policies Benefit Business.” 27 May. The White House. (2015). “Chapter 4: The Economics of Family Friendly Workplace Policies.” 2015 Economic Report of the President.

Pp. 198.Saunderson, Roy. (2012). Top 10 Ways Family Friendly Practices Can Keep Workers Engaged. Incentive Magazine.University of Kansas. (2016). Op. cit. The White House. (2015). Op. cit. Pp. 159.Straz, Matt. (2015). “Your Employees Will Love You for Offering these 3 Family Benefits.” Entrepreneur. University of Kansas. (2016). Op. cit. San Diego County Child Care and Development Planning Council. “ABCs to Family Friendly Workplace Policies and Practices.”PwC. (2014). “The Keys to Corporate Responsibility Employee Engagement.” Pp. 4.The White House. (2015). Op. cit. Pp. 198.Partnership for Family Involvement in Education. “How Your Business Can Support Family Involvement In Education -- and Benefit.” UNESCO. (2015). “Education for All 2000-2015: Achievements and Challenges.” Global Education Monitoring Report. Pp. 46. Global Business Coalition for Education. (2016a). “Opportunities for Impact: The Business Case for Early Childhood Development.” Pp. 21.The White House. (2015). Op. cit.

University of Kansas. (2016). Op. cit. Best Start. (2010). “How to be a family friendly workplace.”The Lancet. (2016). Advancing Early Childhood Development: From Science to Scale Series.Global Business Coalition for Education. (2016a). Op. cit. University of Kansas. (2016). Op. cit. Global Business Coalition for Education. (2016a). Op. cit. Partnership for Family Involvement in Education. Op. cit. US Department of Treasury. (1997). Op. cit. Pp. 24.Global Business Coalition for Education. (2016b). “Investing in Education in Emergencies Through Employee Engagement.”US Department of Treasury. (1997). Op. cit. Pp. vii. See also: Forbes. (2011). “Are family friendly workplace practises worth their money? New evidence.”; BBC News. (2002). Op. cit. University of Kansas. (2016). Op. cit.US Department of Treasury. (1997). Op. cit. San Diego County Child Care and Development Planning Council. Op. cit.US Department of Treasury. (1997). Op. cit. Pp. 16.Global Business Coalition for Education. (2016a). Op. cit.UNICEF. “Children’s Rights and Business Principles.”

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