Human Resources and Manufacturing

Firm turns to child care stipend

Advance Packaging using reimbursement to attract, retain employees.

September 16, 2016
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A local manufacturer is hoping a new child care reimbursement program will help it attract and retain workers.

Advanced Packaging, a manufacturer of corrugated products in Grand Rapids, announced come Jan. 1, it will begin offering up to $2,000 in child care reimbursements to all of its full-time employees with dependents under the age of 13 that have been with Advance for at least 90 days.

Employees can receive up to $500 each quarter for their licensed day care costs.

A 50-state analysis based on U.S. Census Bureau data released in 2015 by Child Care Aware of America showed the average cost for infant child care in Michigan at a child care center is $9,882 per year, and parents with an infant and a four-year-old in child care are paying on average $16,646 annually.

Sue Albrecht, vice president of administration at Advance Packaging, said the program was created to help the company find qualified candidates at a time when competition for employees among manufacturers is high.

“It has been increasingly more difficult to find qualified employees in West Michigan due to low unemployment,” Albrecht said. “In the past, if a person could not consider a particular opening because the shift schedule would require child care and the cost of the care was outside the candidate’s budget, we would be forced to move to the next candidate. Today, there may not be a next candidate. If the problem is the cost of day care, this assistance may help remove that obstacle.”

Albrecht said Advance Packaging also is expanding its production cycle, which will require more employee flexibility.

“As we expanded our 24-hour production cycle to seven days a week, it is our hope that this additional assistance to employees with children will provide the flexibility to work other shifts,” she said.

Albrecht believes the child care reimbursement program will be especially important, as the company seeks new talent to replace retiring workers.

“Advance Packaging has experienced the loss of about 20 percent of its workforce due to retirement,” she said. “With a new workforce coming in the door, and many who are just starting their adult careers and are of child-bearing years, the needs of our workforce are changing.”

Advanced Packaging employs 238 people and 32 percent of them are under age 36.

Albrecht said those employees are at an age where they may be thinking about starting a family and will be thinking about how they’ll afford child care if they do.

She also noted at least 48 children on Advance Packaging’s health insurance plan have parents who would qualify for the new benefit.

Albrecht said she isn’t aware of other companies in the area that are providing child care assistance on a similar level to Advance Packaging.

“Other companies do offer payroll deductions for pre-tax savings plans that can be used to cover the cost of child care, provided the employee makes those contributions, but many of those plans only offer the pre-tax benefit with no contribution from the company,” she said.

“This plan offers company money as a reimbursement for the expense.”

She said employees can use the reimbursement to fund the following quarterly cost, and employees can file for a child care credit when they file their annual taxes.

Albrecht said Advance Packaging has heard positive feedback from employees regarding the new program.

“We won’t know the full impact of the program until the first submissions for reimbursement are received,” she said.

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