Posted: May 25th, 2022
President, Harper Supply Company
The possibility of providing child care assistance to employees
Since we last spoke I have been conducting extensive research into the matter of providing some form of child care assistance to the employees of Harper Industries. Needless to say, I have read much, studied much, and learned much. The final form of this reading, studying, and learning is attached to this memorandum.
As you know, we had a very positive reaction from the employees concerning the possibility of offering some assistance to them in the very expensive area of child care. Before beginning this study I was unaware of the monetary expense involved in having one child taken care of by an honest, kind individual. Since completing the writing of this report I am much more tolerant and much more knowledgeable about the matter of the difficulties of obtaining reasonably priced, reliable child care. In my research I found instances where it was possible for a family to be better off financially with one of the parents staying at home with their children because the pay that parent would have received was less than the amount which would have to be spent for child care. For these reasons, I believe it would benefit all of the employees to have this following report, particularly the section about the monetary cost of child care, presented to them.
I hope that the results of the human resource team will give you a clear picture of what is happening in the world of corporate provided child care. You will find that there are several options that might be considered for Harper Industries and that I have made recommendations to you relevant to these options.
A truly appreciate your confidence in our human resource team here at Harper Supply. Each member worked diligently to provide the most current and informative results. As always, I am in my office at extension 1234 or my be reached by pager at.
With best wishes,
Table 1. The Pro’s and Con’s of Building a Corporate Child Care Center 10
Harper Supply Company Employee Child-Care Survey – 2002 16
National and regional demographics 17
Table 2. Median Income for Families in the U.S. And in Vico County IN 17
Table 3. Children Under Six-Year-old With Both Parents Working 18
SUMMARY AND CONCLUSIONS 20
LIST OF ILLUSTRATIONS
Table 1. The Pro’s and Con’s of Building a Corporate Child Care Center
Table 2. Median Income for Families in the U.S. And in Vico County, IN Table 3. Children Under Six-Year-old With Both Parents Working
Table 4. Average Family Size in the U.S. And in Vico County, IN EXECUTIVE SUMMARY
It is evident that a significant need exists at Harper Supply Company for some sort of assistance with child care. Applying the criteria found in the research for this report indicates that Harper Supply is not economically able to completely fund the construction of a child care facility. When evaluating other options, it appears that the two best choices are A) enabling a large child care to construct a facility on the Harper Supply Campus and making sure that Harper employees’ children would always have places in the facility, while the other spots may be filled by external applicants or B) preparing some sort of tuition assistance program which would mean that for every dollar an employee put into a “child care fund,” Harper’s Supply would match the value of that dollar in some form.
Should Harper’s Supply Company Provide Day Care?
The number of single parent families and families in which both parents work continues to increase. This has placed greater attention on the relationship between work and family environments and the consequences when employees attempt to balance work and family responsibilities. The rising cost of child care has forced many parents to turn to cheaper, less reliable child-care options. Stress related to care giving responsibilities can have a variety of negative impact on a worker’s job performances including decreased productivity, increased absenteeism, increased turnover rate, and decreased job satisfaction.
The conditions which exist in child care at this time range sadly from 10% of child care providers actually endangering the lives and health of the children who stay there to others in which small children may spend as much as 70% of their day watching television (Massen-Draffin, 1995). Driving this overwhelming need for quality child care is the large number of mothers who have to work outside the home. The parents who are fortunate enough to have corporate child care as an option expect their children will receive higher quality care than they would in private daycare (Massen-Draffin, 1995).
Employers began to really see corporate child care as an employee option in the 1980’s. It appeared that corporate child care would address the parent’s dilemmas of finding safe, affordable child care and having access to their children during the work day. What the early pioneers of corporate child care did not expect was a road riddled with potholes and government red tape (Minneapolis Star Tribune, 1995) making it extremely difficult to establish and keep a corporate child care center in operation.
Family friendly” corporations are defined as the ones who persevere and are able to establish a successful child care unit. The factors which make a business “family friendly” include: empowerment of employees to meet family responsibilities, sharing the fruits of productivity and growth fairly with its employees, refrains from assuming family responsibilities, putting long-term interests ahead of short-term goals, refraining from supporting anti-family causes, respecting the institution of marriage and cultivating a corporate culture which values family (Mattox, 1992).
This study will determine the current child-care needs for employees at Harper Supply Company and will also research the financial and social benefits of a company-sponsored child-care program.
There are several corporations who have been involved with successful employee child care since the early 1980’s. Kindercare, Inc. through its division, www.kindercareatwork.comhas successfully helped many companies set up their child care ventures. To make sure that there will be sufficient thought given to the establishment of a child care program, kindercareatwork.com has guidelines which it insists that corporate executives follow during the preliminary fact-finding period of the process. Company size is always considered. Through very comprehensive research, it has been found that a company should have at least 750 employees to make an on-site child care program work. Available space is another factor which has to be determined. Kindercareatwork.com believes that there should be at least 65 square feet of interior feet per child and at least 65 square feet of exterior space per child. Another very important part of this “child care puzzle” is employee involvement. Employers should not assume that employees who have already made satisfactory child care arrangements should drop theirs and rush to enroll their children in corporate child care units.
Another business which has had positive results in corporate child care planning is Lego Creative Child Care Center. Lego received the accreditation of the National Association of Education for Young Children, which is a very difficult certification to attain. Gannett Publishing Company is one of the top grossing United States publishing companies and also one of the corporate child care pioneers. Gannett has been listed on Working Mother Magazine’s top one hundred best companies for working mothers for 11 times in a row. It is really no surprise that Gannett’s “bottom line” is in such good shape, since several studies have shown that a work environment which fosters happy employees is crucial to financial success (Lozada, 1997).
Not all companies have entered the child care race at full-speed with just the assumption that their efforts would be successful. Ford Motor Company, certainly not a “small business endeavor” spent a great deal of time surveying employees, researching options, and consulting with child care professionals before any action was taken. Even then, a pilot program was put into place at a subsidiary plant, North Penn facility of Electronics and Refrigeration, before any major changes were made (Lozada, 1997). Lisa Farnin, a manufacturing engineer and project leader at North Penn states, “We were trying to find out what made sense to our company – using common sense and good business sense. We tried really hard to look through what to propose and why it would work.”
Another question in the child care conundrum is what happens when little Johnny or Susie is sick? If Johnny or Susie’s mom is also an attorney who bills $250 an hour for her time, the senior partner of the firm will soon begin looking for “sick” child care. Of course, this type of care is only for a child who is “mildly ill” (to use the jargon of the industry) but enterprising child care entrepreneurs have taken this need and developed an entire industry from it. The National Association of Sick Child Daycare reports that there are currently approximately 350 “mildly ill” child day care centers in the country (LoJacono, 2001).Generally, one center will serve several regular day care centers and spots must be leased by the year by the corporate day care or by parents. One lease may cost up to $8,000 a year for a lease, but considering the amount of money that could be lost by employees staying home with mildly ill children, many corporate CEO’s think the expense is justified (Woodward, 1999).
Finally, there are child care endeavors which have not succeeded. One example is Owens Corning. Evidently, their employees did not answer all their survey questions as truthfully as they could, which created an inflated “need” for on-site child care. After building a facility, they did not have enough clients to manage economically. It has been suggested that employees may “pad the deck” a little when they respond to questionnaires or surveys concerning child care, saying they will use it when they already have made previous arrangements. They say yes as added insurance if they ever need it. The trouble comes, as it did to Owens Corning, when some do not ever need it.
Day care consultants want corporate America to believe that erecting a “quality day care center” is like constructing a baseball diamond in the middle of an Iowa cornfield, “if you build it, they will come.” But, a number of companies have found otherwise. For example, an on-site center opened by a Kentucky-based office supply company employing 100 persons lost $30,000 in two years because of low usage (Marsh, 1995).
Similarly, The American Savings Bank, a California company employing 4,000 people, close the doors of its “award winning” day care center after employees ranked it dead last on a list of 10 most wanted employee benefits (Shellenbarger, 1995). Also, a recent study by Hewitt Associates found that while 60% of America’s major employers offer pre-tax day care set-asides, only 3% of employees use them (Hewitt Associates, 1995).
There are, of course, several options to be examined when investigating child care assistance for employees. Some discussion has already been devoted to the topic of corporate on-site day care centers. In an article entitled, “Should Employees Help with the Kids?” (The Conference Board, 1995) the pro’s and con’s of offering child care as a job benefit are outlined:
Table 1. The Pro’s and Con’s of Building a Corporate Child Care Center
Number of Companies Surveyed
An Employer’s View of The Pro’s of Having a Corporate Child Care Center
An Employer’s View of The Con’s of Having a Corporate Child Care
62% thought corporate child care had raised the morale of their corporations.
41% thought corporate child care incurred too much organizational costs.
54% thought that employee absenteeism had been lessened by having day care center
39% thought employee costs were to high
53% thought that having a child care program improved the public image of the competence
27% said that the usage of their child care center was under-utilized
53% thought that having a child care center enhanced recruitment
27% thought that having a child care center contributed to communication gaps
52% thought that having a child care program increased productivity
26% thought that having a child care facility lessened the availability of their employees
37% thought that having a child care program lowered employee turn-over
13% thought that having a child care center lessened their ability to monitor quality
Should Employees Help With the Kids?” (The Conference Board, 1995)
As with any issue which affects people’s lives and work, there are barriers and problems which come with solutions. This is certainly true of the corporate day care endeavors. Some of the barriers which stand in the way of successful projects are; A) making sure that the facility is capable of housing a day care program, B) addressing all the health and safety laws including the parents’ concerns about ill children, etc., C) in some situations, a lack of employee participation, D) the amount of time taken for set-up and day-to-day operations, E) the costs which can be exorbitant if not overseen by a knowledgeable construction director, and F) the lack of properly prepared and certified providers in the company’s area (www.crumbia.gov.uk/briefings/1999/brf9932.htm).
The major problems which many corporate day care providers have faced are; A) the cost and the amount of different kinds of insurance a center must have, B) the major investment that will be made not knowing whether it will be successful or not, “once you have a center, you have a center,” C) subsidizing employees’ costs and finally, D) the fact that typically, 2% – 4% of employees will take advantage of a company sponsored program, thus causing a problem for smaller companies (such as this one).
Although on site child care facilities are an expensive and sometimes a disappointing undertaking, there are other ways that employers can assist their employees with their child care needs. Some employers have implemented plans which paid various percentages of their employees’ child care costs. Many times, this type of arrangement involves the company contracting with a large child care facility, sometimes one of the national “chains” such as Kindercare. In fact, there have been instances where the corporation seeking child care assistance would donate the land to a child care provider with the understanding that the corporation’s employees would get first preference for as long as the center was open. This type of arrangement takes some of the financial burden off the corporation, since it does not have to “start from scratch,” and also is a good deal for the provider because it will be able to enroll children who are not connected with the company as long as there are empty seats and none of the corporation’s children are waiting. An agreement such as this one is basically a win-win one, because neither party has to learn all the basic facts of conducting the other’s business.
Since the child care provider is generally part of a franchise or chain, the research, the training, the insurance, the curriculum, the staffing, and the legal matters are handled by their own in-house professionals. If the corporation had to manage all these necessary and expensive parts of the child care business, the chances of being able to provide a child care option would have been significantly smaller. Some successful examples of this approach to corporate child care are the Norlarco Credit Union in Fort Collins, Colorado, The Principal Financial Group in Des Moines, Iowa, and Paine-Webber in San Francisco (Woodward, 1999). Each of these companies, whether small (Norlarco Credit Union has 90 employees) or very large (The Principal Financial Group employs 8,500 people), implemented their child care plans by becoming partners with an established child care provider.
Another way to meet employees’ needs without having to make a large financial contribution includes before and after school care provided by the local school systems. The National PTA has gathered some very informative statistics about before- and after-school care (www.pta.org/ptawashington/issues/before.asp).Anywhere from 5 million to 15 million American children don’t have a place to go after school. These children risk:
A) poor grades, B) possible abuse of drugs or alcohol, C) sexual activity (which may result in disease which could alter their lives forever, and D) a much increased risk of becoming victims of crime.
Well-run before- and after-school programs provide: A) learning opportunities,
B) a safe environment, and C) having adults as their caregivers. Before and after school has been called prime time for crime, therefore, programs such as these could keep children out of trouble.
Well managed after school program positives include: A) higher attendance, B) better grades, and C) an opportunity to develop a higher self-esteem (www.pta.org/ptawashington/issues/before.asp).
These programs are out of reach for many children. Only 25% of students in urban areas participate in programs such as these. Rural areas attempting to set up these kinds of programs encounter difficulties with location and travel time. In a recent survey conducted by the National PTA 94% of the respondents felt that there should be before- and after-school programs (www.pta.org/ptawashington/issues/before.asp).
The 21st Century Community Learning Centers program is a primary source of federal funds for school districts to develop and retain before and after school programs. Over the past three years more than 1,500 grants for 6,800 rural and inner city public schools were awarded. The sources of funding are increasing for these programs and should be encouraged whenever possible. Some very positive advantages of using public school for before and after school programs: A) are cost effective, B) have good locations, C) make excellent use of teachers and personnel, D) help to get parents involved with their children’s school activities, and E) provide an instant location and trained workers (www.state.gov/m/dghr/flo/rsrcs/pubs/7140.htm).Usually, these type programs operate from 7:15 AM until school begins and after school until 6:00 PM (www.state.gov/m/dghr/flo/rsrcs/pubs/7140.htm).Resources which may be of use are:
YMCA, YWCA programs, B) Boys’ and Girls’ Clubs, C) The American Red Cross, and D) The National Zoo.
The main drawback to this option is the fact that there is no provision for babies and children younger than five years old. For the business owner who is dedicated to helping his employees solve their child care problems, it would be worth the time and energy to investigate summer care programs and sick child programs (these were discussed extensively in a previous section of this report).
Many parents use or would like to use home child care for their children, especially their newborns and infants. For employees who make between $30,000 and $40,000, having a care provider come into their homes could very easily end up costing one-fourth to one-third of their incomes. Some employers have begun to offer financial incentives to parents who use home care providers (Lee, 1995), (Woodward, 1999).
Finally, an option which might be considered if there is a concern that there will not be enough money to supplement home care is whether or not there is a nearby center in which the company could reserve spaces, buy preferred customer status for its employees, or donate money so they can upgrade quality and match the company’s operating hours. As may clearly be seen, offering child care to employees is a complicated undertaking.
One of the most important parts of preparing a strategic plan such as this is information gathering. The only way for the CEO of The Harper Supply Company to know how many of her employees need or would use child care initiated by the company is to ask them using some sort of data gathering instrument. Likewise, the only way for the employees of The Harper Supply Company to tell the CEO what their priorities are concerning benefits is to tell her on the same kind of data gathering instrument. All involved in the surveying process must keep in mind that telling the truth at the time of the survey is vital. There is no other way for the planners to have an accurate picture of the employees’ needs and ideas without complete honesty.
One of the best survey methods to use is described by Judith David Bloomfield in her article, “Establishing work-site child care centers: Basic steps and considerations” which appeared in the Summer, 1998 issue of The Compensation and Benefits Management Journal. Bloomfield outlined almost exactly the same procedure and survey instrument as was used to gather the data for this report. Therefore, an informal validation of this survey design has been accomplished.
The following survey was distributed to each employee of Harper Supply Company. It was stressed to each person how important returning the survey was in relation to the collection of valid data. The surveys were returned and the answers to the questions were tabulated (totals are shown on the survey which follows). This information provided in good faith by the employees of Harper Supply Company is the foundation of whatever type of child care assistance is offered, and is also the foundation of the decision not to provide child care assistance if that decision is made. The following is a copy of the survey which was distributed to Harper Supply Company’s employees. TotalS are included for reference purposes.
Harper Supply Company
Employee Child-Care Survey – 20021
Please respond to the following survey items by checking the appropriate response.
1. What is your gender? 750 Female 650 Male
2. Do you have children? 400 No 1000 Yes
If you don’t have any children, thank you for responding. Please place the questionnaire in a box marked “Child-Care Survey” located at the factory time clock or at the entrance to the main offices.
If you do have children, please answer the remaining questions.
3. Would you use a company child-care program?
60% Yes 18% No 22% Uncertain
4. Have you had difficulty finding child-care providers?
95% Yes 5% No 0% Uncertain
5. Have you been absent from work in the last year because of a lack of child care?
55% Yes 43% No 2% Uncertain
If you responded “No” to question 5, please skip to question 7.
6. Approximately how many days have you been absent from work in the last year because of child-care problems?
0-10 days 4% over 10 days 21%
Not all factors considered for research were within the scope of this project. State and local government regulations of on-site child-care facilities are important considerations when recommending child-care options. The Harper Supply Company legal counsel will examine this topic separately; therefore, it will not be included in this study. Accurate assessment of current employee child-care needs will depend on employee participation in the survey process. A low participation rate will not provide an accurate assessment of child-care needs among employees.
National and regional demographics
The last essential part of the information gathering phase of this study is to thoroughly compare the local, regional, and national demographics. The most efficient way to do this is to use the latest form of the United States Census. Therefore, the source of the following information was the United States of America 2000 Census. This information is found at these websites:
http://censtats.census.gov/data/IN/05018167.pdf and http://censtats.census.gov/data/U.S./01000.pdf
Table 2. Median Income for Families in the U.S. And in Vico County, IN Yellow = National Median Income – $41,944
Maroon = Vico County Median Income – $33,184
Table 3. Children Under Six-Year-old With Both Parents Working
Yellow = the percent nationally of both parents working – 58.6%
Maroon = the percent of Vico County with both parents working – 62.1%
Yellow = the average of children in Vico County under 18
Maroon = the national average of children under 18
Table 4. Average Family Size in the U.S. And in Vico County, IN Yellow = the Vico County average family size – 2.96
Maroon = the national average family size – 3.14
Source for all graphs http://censtats.census.gov/data/IN/05018167.pdfand http://censtats.census.gov/data/U.S./01000.pdf
Another facet of data collection is to find out how many people will be affected by the issue at hand – in this case, corporate child care. There are 8,000 employers now offering childcare on or near their workplace. This figure is about 9% of all the employers in the United States. Nearly half of the workforce is female and about 85% will have children during their career (http://workfamily.com/Open/FAQ_Childcare.asp).
A major consideration is that companies pondering offering child care should count on picking up about a third of the operating cost, and all the capital costs for employer-supported daycare facilities. About 2% – 4% of employees actually use employer-supported daycare if it is offered (Mason-Draffen, 1995). Finally, in planning for the number of staff members who will be directly involved in taking care of the children this ratio is the standard to follow: it is vital to have one adult for every 3 to 4 infants, one adult for every 5 to 7 toddlers, and one adult for every 7 to 10 preschoolers.
Although it has been mentioned previously, it is important to remember that most management companies require that a company’s center be big enough to serve about 75 children, and if there are fewer than 1,500 employees it may be strongly suggested that a center not be opened (Lozada, 1997). Also, building costs could be as much as $150 per square foot or as little as $65. Equipping a center could cost as little as $2,500 per child, or as much as $10,000 and running a center will cost from $7,500 to $10,000 or more per child per year, which equates to $144 to $200 per week (Lozada, 1997).
SUMMARY AND CONCLUSIONS
The issue of employer assisted day care is one filled with facts, opinions, suppositions, and misconceptions. The purpose of this study was to find out the facts about the feasibility of establishing some sort of employer assisted day care for Harper Supply Company’s employees. In order to do this, various plans were studied in reference to how they related to Harper’s Supply Company. The major types of employer assisted child care types ranged from the company itself constructing a child care facility, staffing it, insuring it, and making sure that all local and federal regulations are followed. As can well be imagined, this undertaking was found to be extremely expensive, especially for companies with less than 1500 employees. Another occurred when the corporation teamed with a national child care provider by assisting financially in the construction and maintenance of the facility and benefiting from the knowledge and experience of the provider. Of course, one stipulation for the company’s participation in a plan such as this was that the company’s employee’s children were given preferred status for attendance at the center. Even with the employer assisting with costs, the parents still would expect to pay anywhere from $100 to $150 per week per child.
The final two major options which were examined were employer assisted child care by some sort of voucher or tax credit which held the possibility of saving the employee money in the long run, but still would cost up to $100 per week in some instances. The last option examined was the in-home arrangement which involves someone caring for the employee’s children in the employee’s home with the provider’s salary being supplemented in some fashion.
Demographic information was reviewed at the national and local level. The most significant fact emerging from this review was that Vico County had a larger percentage of children under the age of six than was the national average. Vico County’s average yearly income was almost $9,000 lower than the national average, and the family size was smaller than the national data by almost one person.
The results of the survey revealed the following information:
There are exactly 100 more females working at Harper’s Supply Company than males (750 / 650).
400 hundred respondents have no children while 1000 are parents.
60% of the 1000 employees who have children indicated that they would use a company supported day care center while 18% said they would not use a company supported day care and 2% were uncertain.
When asked if they had difficulty finding child care 95% answered yes, while 5% answered no.
55% of the employees with children said that they had been absent from work because of a child care problem, while 43% said No, and 2% were uncertain.
75% of the employees with children said they had been absent from work for 0-10 days because of child care problems. 4% had been absent over 10 days due to child care problems and 21% were uncertain.
70% of the employees with children had been late to work because of child care problems. 5% had not been late and 25% were uncertain.
95% said they had been late to work 0-10 times due to child care problems, 4% had been late over 10 times and 1% were uncertain.
2% said their weekly cost of child care was $0 to $100, 80% said their costs were between $101 and $200, and 18% said they paid over $200 per week for child care.
Crunching the numbers” indicates that a significant need exists at Harper Supply
Company for some sort of assistance with child care. Applying the criteria found in the research for this report indicates that Harper Supply is not economically able to completely fund the construction of a child care facility. When evaluating other options, it appears that the two best choices are A) enabling a large child care to construct a facility on the Harper Supply Campus and making sure that Harper employees’ children would always have places in the facility, while the other spots may be filled by external applicants or B) preparing some sort of tuition assistance program which would mean that for every dollar an employee put into a “child care fund,” Harper’s Supply would match the value of that dollar in some form. Therefore, it is my recommendation as the human resource director of Harper Supply Company that the two child care options listed above should be studied by a committee made up of employees with children, a members of the human resource division, at least one member appointed by the CEO of the company, one employee without children, and a member of the community with a pre-school child to develop a plan which might be used as a pilot study at first and then expanded into a child care project complete project or may be implemented as a complete project from the beginning.
Bloomfield, J. (1998). Establishing work-site child care centers: basic steps and considerations, Compensation and Benefits Management.
Carlson, A. (1998). The Trojan horse of child care, Executive speeches.
Durham-Vicks, L. (2000). Emergency child care; an important benefit, Washington
Business Journal. 19(21), 65.
Lee, L. (1995). 75 examples of associations advancing America, Association
LoJacono, S. (2001). Mildly ill/back-up child care, Compensation and Benefits
Lozada, M.(1997). Balancing act: corporate child care programs, Techniques, 72, 14-22
Massen-Draffen, C. (1995). State guidelines on how to place your child, Newsday.
Mattox, W. (1995). The family friendly corporation-strengthening the ties that bind,
Contemporary Women’s Issues Database.
Shellenbarger, S. (1995). Work and family, The Wall Street Journal.
Snavely, B. (1999). Childtime spouts up, but stock hasn’t, Detroit Business, 15(15), 2.
Woodward, N. (1999). Child care to the rescue, HR Magazine, August, 1999.
Yung, K. (2000). Child care: few firm solutions, The Dallas Morning News, 3270.
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The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.
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