Health Care and Human Resources

Employers help defray $10K cost of child care

West Michigan companies, workforce developers seek to remove barriers for working parents.

November 23, 2018
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Childcare Costs
Child care benefits are especially useful for companies seeking to attract millennials to the workforce. Courtesy Wee Folk Rockford Child Center

As global corporations beef up benefits offerings, a few West Michigan companies say they are ahead of the curve when it comes to employer-sponsored child care.

Starbucks said last month it is partnering with Care.com to give employees the option to pay $1 per hour for in-home child care or $5 per day for care in a center, according to a report from Chicago-based outplacement and executive coaching firm Challenger, Gray & Christmas.

During the past year, other U.S. companies have added child care and expanded parental leave benefits, said Andrew Challenger, vice president of Challenger Gray.

General Mills extended to its employees paid maternity and non-birth parent leaves within the past few months. Walmart began offering its full-time hourly employees the same parental leave as its salaried employees.

Such initiatives come as millennials, those born between 1981 and 1997, encroach on baby boomers as the largest generation in the workforce.

According to Ernst & Young, 78 percent of millennials in relationships have both partners working. If they have children, they face the task of finding quality and affordable child care. If they can’t, one of them will leave the workforce — squeezing an already tight labor market.

The U.S. Department of Health & Human Services pegs affordable child care at 10 percent of a family’s annual income. According to Care.com, most families are paying twice that amount, ranging from $195 per week for a family care facility up to $565 per week for a nanny.

In Michigan, the average annual cost of infant care is more than $10,000, nearly as much as the average cost of tuition at a public college, which is $11,994, according to data from West Michigan workforce development consortium Talent 2025.

Kevin Stotts, president of Talent 2025, said the organization’s Workforce Development Working Group in 2016 identified access to quality child care as one of several key areas that need to be addressed to increase labor force participation among those 24-54 years of age in Michigan.

Talent 2025 is tackling the issue from a policy standpoint, working to address factors such as Michigan’s declining number of child care providers, down by 30 percent between 2016 and 2017 due to regulatory challenges and labor shortages; Michigan’s child care subsidy eligibility standards and reimbursement rates; and regulatory oversight of child care centers, which currently report to three separate state agencies instead of one like in other Midwest states such as Minnesota.

Stotts said Talent 2025 surveyed member employers last spring to ask them what they currently do related to child care benefits, as well as what they are interested in doing.

“There was interest among employers of providing child care as a non-uniform benefit, but acting on that has been a challenge,” Stotts said. “There have been some larger employers that have tried it, but they provide certain products and services, and child care isn’t what they do.”

Stotts said employers have to start thinking now about the impact of Michigan’s “child care crisis” on their workforce.

Byrne Electrical, at 320 Byrne Industrial Drive in Rockford, offers child care benefits for its employees through an on-site facility, Wee Folk Rockford Child Center, which enrolls infants through preschoolers.

Stephanie Parrish, communications and marketing lead at Byrne, said Wee Folk gives Byrne employees a 10 percent child care discount. In addition, Byrne pays 15 percent of each participating employee’s weekly tuition at Wee Folk.

Parrish said it was a groundbreaking move for Byrne to start offering the service in 1989, prompted by employees with young families voicing their need and the company listening.

“The number of working moms and dads has only grown,” she said. “Since our early years, it has always been Wee Folk’s mission to provide a safe and caring environment for the children of Byrne employees and the Rockford community.”

Molly Byrne currently co-owns Wee Folk with her sister, Kathy Scudder.

“I’ve always felt that we were providing an important service, allowing parents at Byrne and in the community to feel at ease when they have to be away from their children. There’s a real sense of joy and accomplishment in continuing this family business through the years,” Byrne said.

Parrish said the company believes the child care center has been one tool in its talent attraction and retention toolbox.

“People are less likely to leave a position where reliable day care is available on-site,” she said.

Wee Folk currently has record enrollment numbers, according to Byrne Electric.

Spectrum Health also owns a longstanding child care center for its employees, on Michigan Street between Ball and Plymouth avenues, close enough to its Butterworth and Blodgett campuses for employees at both locations to use. Spectrum does not advertise the address of the center, which is managed by Bright Horizons.

Kim Thomas, director of system benefits and integrated disability management at Spectrum, said openings in the child care center are offered first to Spectrum employees, then to the community as space allows.

Spectrum employees are eligible for 5 to 6 percent tuition discounts. Thomas said 162 Spectrum employees have a child or children enrolled at the center at this time, and total enrollment is at 225 families.

“We offer child care because it can be difficult to balance family and work life,” Thomas said. “Also, because we are a 24/7 employer, our employees find it difficult to find child care that matches their schedules and offers flexibility.”

Thomas said a recent Spectrum Health survey revealed 12 percent of employees viewed child care as their main concern, including the importance of quality care and scheduling flexibility.

“We can offer drop-in care for our employees (at the center),” she said. “Whether an employee uses that facility on a regular basis or not, if unexpectedly, they need a day of child care, they can utilize the center.”

Spectrum charges “market competitive” prices at the center, Thomas said. Infant tuition is about $270 per week after the discount, depending on age and number of days per week of care.

Thomas said Spectrum Health tries to support its employees “from a holistic perspective” and views employees’ families as part of that picture. She said the health system doesn’t track retention data solely on the basis of the child care program, but 74 percent of Spectrum employees say the overall benefits package is “an important consideration” in their continued employment.

“We are very proud to be in a position to support our employees and families in this way,” Thomas said.

Other West Michigan companies are stepping up, too. Wolverine Worldwide has offered on-site day care at its Massachusetts office for the past several years and expanded its paid parental leaves across all campuses in the past year. It is currently considering local child care initiatives to be rolled out in 2019.

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