What Can Employers Do About Low Birth Rates And The Baby Bust?

Forbes

16-05-2025

Despite growing concern by leaders regarding declining U.S. birth rates and The Baby Bust, the ... More challenge of determining what to do about it remains.
Amid the growing concern by leaders across political affiliations regarding declining U.S. birth rates and The Baby Bust, the challenge of determining what to do about it remains. The ability of businesses to serve their customers due to labor shortages has been making headlines for some time. Effective leaders understand both the short and long-term implications of low birth rates and take actions to support employees in their decisions around having – and raising – children.
Employers are in a unique position to support employees who wish to start and raise families. Effective leaders recognize that decisions about life choices are deeply personal, and they respect an array of employee views, circumstances and decisions. These leaders take the following actions to support employees both during family formation and throughout life stages:
1. Understand the issue – In the U.S., the CDC reported fertility rates decreased annually from 2014 to 2020. Following a brief increase from 2020 to 2021, the rate decreased over the next two years, reaching a historic low in 2023. Other countries, including the U.K., Canada and France reported similar trends. According to recent CDC data, the number of births increased 1% in 2024, and the general fertility rate increased 0.006% from its historical low in 2023 to 1.627%. This means the current U.S. population is not replacing itself. Even if a post-pandemic baby boom began in 2024, it would be the 2040s before the next generation would reach the workforce. While the pressure of 'The Great Resignation' has subsided, there still are over 7 million unfilled jobs in the U.S. in 2025.
2. Adopt broad workforce strategies – This space reported in November 2021 that a demographic 'perfect storm' had been brewing in developed labor markets long before The Great Resignation, reducing talent availability at both the leadership and entry levels of organizations. Effective leaders develop broad strategies for dealing with talent shortages in the short term. These include conducting sophisticated workforce planning analyses, tapping and retaining older workers, engaging emerging economies and legal immigration for sources of talent, leveraging contingent workers, accelerating the use of robotics and AI, focusing on culture and employee experience, and providing non-traditional skill development.
3. Enhance fertility benefits – According to an article by WTW's Elaine-Marie Cannella, RN, Susan Mueller, MD, Jeff Levin-Scherz, MD, and Patricia Toro, MD, about 11% of women of reproductive age experience fertility problems. The fertility journey can be stressful, time-consuming and costly. Effective leaders implement policies and benefits, such as financial assistance, access to fertility resources, counseling and flexible work options. They also work with vendors that can support reproductive health from pregnancy to parenthood.
4. Improve access and quality of pre- and post-natal support, maternal care and child healthcare – Effective leaders evaluate their benefits to ensure employees and their dependents have access to quality care and do not face unreasonable costs. They also encourage medical carriers to offer coverage for birth centers and to pay for value in maternal care, as well as mental health support. They offer meaningful maternal benefits, such as coverage for midwives and birth doulas. They communicate frequently with plan members. This support continues for both mother and child long after the child is born.
5. Offer paid parental leave (in addition to government requirements) – According to WTW research published in early 2024, the vast majority of U.S. employers (84%) were planning to make changes to their leave programs in the next two years. While 86% already provided maternity leave, 82% paternity leave and 82% adoption leave, nearly one-fifth of those companies planned to increase the value of their current programs. Effective leaders understand the value of these leave programs to their employees and the role they play in supporting parents.
6. Provide caregiving support – Research shows time spent on caregiving and household tasks, both for children and an aging U.S. population, can be time-consuming and increase stress and mental health needs. Effective leaders provide caregiving support to employees through formal programs (such as childcare access and back-up childcare and daycare benefits) while supporting parent 'on/off' tracks for appropriate roles (including paid time-off that can be flexed for both child and eldercare in an array of parental situations).
7. Promote financial wellbeing after the child is born – Research varies on the cost of raising a child in the U.S., with some studies citing costs in the range of $250,000 to $350,000 for average families in today's dollars – and that does not include higher education costs. College can cost up to $400,000 for a four-year university, depending on tuition and aid packages.
According to WTW research, employers are challenged to meet the financial wellbeing needs of their employees. Only one in five employers report that they are adequate in this area. Effective leaders address this shortcoming through a variety of approaches, including providing access to earned wages sooner and to banking and non-predatory loans; offering rent/mortgage counseling and employer-assisted housing programs that offer a one-time subsidy to employees purchasing a home; implementing financial education that caters to different life stages and may include saving for rent and home purchases, childcare, college and retirement; and providing access to employee discount programs, which incur no cost to the company.
They also help employees understand how company savings plans (such as Flexible Spending Accounts, Dependent Care Flexible Spending Accounts, Health Savings Accounts, 529 college savings plans and 401K plans) can be used during various life stages.
8. Emphasize flexibility – According to WTW's Global Benefits Attitudes Survey, 53% of employees who have work that can be done remotely indicated they would look to change jobs within a year if their employer mandated a full-time return-to-office policy. This includes working parents who are managing often conflicting priorities.
Effective leaders assess different work arrangements, technologies and processes to determine what is right for their work and their workforces. While not all jobs can be performed remotely, many can. Effective leaders provide flexibility and choice wherever possible, regardless of whether employees are knowledge or front-line workers, or if they are in remote, hybrid or on-site roles.
9. Offer fair and competitive pay – Research suggests that caregiving responsibilities often lead to erosion in competitive pay levels for parents and can lower their standard of living and ability to save. Effective leaders review their compensation data to assess pay fairness and address pay disparities. These leaders build employee confidence and goodwill by practicing pay transparency and sharing data and information about remediation efforts with their employees.
10. Transform pay and benefits and offer holistic total rewards – Effective leaders view pay, benefits, wellbeing and careers holistically, developing programs that help attract and retain their talent at different life stages, including parenting. Employees deeply value employee benefits such as health care and retirement. Their costs to both companies and employees continue to increase, but are not captured in salary increase budgets. Effective leaders appreciate that salary increases can be 'eaten up' by cost increases and the further erosion of purchasing power.
11. Create career advancement opportunities and mentorship – The challenge of parenting can push many parents out of the workforce. Effective leaders take numerous actions to support appropriate advancement for their talent. First, they measure the trajectory of their high-potential employees and identify barriers to advancement. They offer mentorship opportunities for early to mid-career talent, including guidance on how to integrate families and careers, where appropriate. Additionally, they communicate a clear roadmap for career advancement and offer skill-building to those who need targeted support, especially during the parenting years, which can coincide with management and leadership progression.
Effective leaders know that no company can afford to offer all these programs – and some approaches are more effective than others. They prioritize based on the needs of their particular workforces. These leaders understand the role their companies can play in their employees' ability to start – and sustain – healthy families.