Child care: not only the employee benefits - column

Child care: Not only the employee benefits

You are in the midst of launching a new magazine and have been fortunate to recruit a creative up-and-comer to take on the role of editor. He is bright, fast on his feet, a quick thinker with lots of energy and enthusiasm, and has demonstrated management strengths prior jobs. The staff includes a number of beginners who, with the right amount of guidance and direction, will become a strong, cohesive team.

An important launch meeting has been scheduled for Tuesday at 2:00 PM. The meeting commences and is running smoothly until it is interrupted by an ungent phone call for the editor. His child has a temperature and must be picked up from the day-care center. His spouse, who also holds a challenging management position, is away on a business trip for the week.

The editor must make a decision, and quickly. He opts to reschedule the meeting and quickly leaves to pick up his child. The child remains sick for two days. You editor is out and the launch develops snags because of his absence. His calls in and does as much as possible from home, but he can't leave his son because he has no one to take care of a "sick child" in his wife's absence.

You have these kinds of scenarios happening more frequently than you realize because parents--both mothers and fathers--are taking a more active and equal role in the rearing of their offspring. The proliferation of single parents creates the additional burden of your employees not having partners to rely on to take over in a crisis situation.

Lost time from work because of day-care and family-related emergencies is the single largest culprit in today's corporate world. Your $50,000-a-year editor who loses an average of eight days per year from work costs you over $1,800 in lost time. Multiply this by the number of people you have working for you with preschool children or children in after-school care, and the numbers are staggering.

Statistical research has shown that one out of three sick days taken by a working parent is actually due to child-related illnesses that prevent the child from attending school or being taken care of by a day-care provider. In addition, an average of eight sick days related to child-care problems are taken each year by either the mother or the father. In many situations, these days result from the day-care provider or in-home babysitter being ill and unable to take care of the child. Most parents complain that these schedules create a needless amount of stress and worry, because "I never know where my children are going to from one week to the next, and they don't know, either." School cancellations and school delays also create difficult situations.

The day-care delimma is nationwide and affects every industry. Unfortunately, most publishing companies are hesitant to respond to the needs for their employees. Very few publishing companies contacted for this article provided any significant assistance to their employees faced with day-care problems, and few appear interested in doing so. Many believe it is a "woman's issue" and that care of the children is a mother's problem.

Breaking ground

Most publishing company human resource executives acknowledge that day care is a pressing need, but few see it as their company's problem. Of those that do provide assistance, most merely provide advice and referrals.

However, there is one publishing company that has taken a pro-active approach and found effective solutions. CMP Publications, an 812-employee company based in Manhasset, Long Island, is in the forefront in providing onsite day-care assistance. Their program began with a pilot for two infants in 1987. Lilo Leeds, co-chairperson for CMP, believes that providing day-care assistance is the "right thing to do"--for employees, for children and for the company. In January 1989, CMP became licensed for an on-site, full-time infant program, which is now at full enrollment with 12 babies ranging in age from two months to two years nine months.

The program is housed at the company's headquarters and has a staff of four CMP employees. In order to meet New York State requirements, a visiting nurse visits the facility three hours per week; the 1:4 staff:child ratio is surpassed by the staffing levels provided.

Although the company did not set a specific start-up budget, the cost has been estimated at $50,000, the bulk of which was spent in renovating the 1,000-square-foot space. Employees pay $60 a week for the full-time services, and the center is open from 9:00 AM to 5:30 PM. CMP was able to get an exemption from the New York State requirement that there be a nutritionist for the program by requiring parents to feed their children each day. The company estimates that they also kick in $65 a week toward the costs of the program.

Retaining valuable employees

Dori Walther Lee, vice president of marketing services, has the daily, ongoing responsibility for the successful management and growth of the program, and claims that the implementation of on-site day care has allowed the company to retain valuable employees who would not have been able to return from maternity leave without this assistance.

The company now has a waiting list of another 12 unborn and soon-to-be-born babies, and plans to expand the Infant Program and to inplement a Pre-School Program by June 1990, all within their own space.

Some of the hurdles faced by most companies have not been problems, according to Ms. Lee. Contrary to popular belief, insurance did not have to be increased, because the company has liability insurance already and the staff of the center are CMP employees.

One of the more significant hurdles was finding the right director, and determining that a lottery would be used if there were more children in need than space would allow for when the center opened. New York State adds another hurdle in requiring ground floor space to house day-care facilities, which makes prime office space out of the question. However, many commercial builders on Long Island have responded by incorporating day-care space in newly construed buildings. This is an attractive feature to a prospective, employee-conscious tenant company.

Sixty-three percent (513) of CMP Publications' work force is female; 77 percent (375) of those women are in their child-bearing years (using a cut-off age of 40).

The company now sponsors a Summer Camp program for employees' children, and is planning an Emergency Sick Child program, in addition to the current programs offered.

CMP is an active participant in the Corporate Initiative for Child Care and Elder Care in Long Island, and firmly believes that the pressure to provide these services will increase in direct proportion to the increase of women in the work force.

Every publishing company president should know the statistics by now. Half of all mothers with preschool children work outside the home; 80 percent of all women in the work force are of child-bearing age, and 85 percent of them will become pregnant sometime during their careers. Estimates are that by next year, there will be 10.4 million children under the age of six with working mothers. All of this, combined with an inadequate supply of child care, equals a growing number of our publishing employees--both mothers and fathers--spending a significant amount of time at work worried about their children, rather than concentrating on their jobs.

Child-care assistance is tax deductible to employers, but few respond. Most are under the false impression that onsite day care is the only option. And although this was the solution at CMP, at an average set-up cost of $61.58 per employee, there are other alternatives. What most publishing executives and human resource professionals are slow to realize is that these alternatives are less expensive, and quite often more effective, than opening a company day-care center. You can spend as little as $500 to provide education and awareness, or several thousand to set up your own center.

An array of choices

Some of the options include the following:

1. A consortium: This is a pooling of resources among companies in your area for employees with the same needs. This will create a day-care center that is run not by your company, but by a day-care provider. However, to be successful, a consortium needs a committed individual to act as the motivator. Very often this individual is a day-care consultant. Sometimes it's a developer who wants to use a day-care center to help market space in an office park. And sometimes, though rarely, it's a company president.

A prime mover is needed to make sure that the dollar projections are accurate and realistic, and to ensure that the companies involved will be protected from liability, that each is contributing its fair share, and that state and Federal regulations are being met. In this arrangement, companies pay a predetermined fee for each slot (these dollars being tax-deductible) and make these slots available to their own employees. Unused slots are made available to the public, and each year the companies in the consortium get priority enrollment for their employees by paying a set fee.

2. Outside contracting: In this arrangement, the company contracts with an agency to provide its employees with information on the availability of child care. Employees can phone the agency directly to find out about opening in day-care centers or family day-care homes. The day-care providers are monitored by the agency and are licensed by the state and Federal government. In some cases there is a hotline the employee can call anytime to get an updated child-care listing. Agencies sponsor seminars on how to select a day-care center, an evening or daytime babysitter, and in-home day-care providers. These options offer flexibility for parents who can select the day-care provider situation that's best for them and their children.

3. Salary reduction plans: This is the most popular and least expensive form of financial assistance for child care. A flexible spending account is established that allows employees to reduce their pre-tax incomes by up to a specified limit per year. This money is placed in an account from which they are reimbursed for child-care expenses. These plans can stand alone and be used exclusively for child care, or they can be expanded to allow for a broader "cafeteria" approach.

The benefit of this plan is that the employees get a tax break and the company ends up spending very little. Social Security and Federal unemployment insurance taxes are not paid on these dollars. The downside may be in the kinds of receipts that you will need to prove your deductions. Many private day-care providers do not report their income to the IRS, and are therefore reluctant to provide your employees with receipts.

4. Reimbursement plans: This plan provides tax deductible payments that are paid to the child-care provider directly, or else the employees are reimbursed for an agreed-upon maximum amount per week or per month. This arrangement can be the simplest to implement and can meet IRS requirements merely by having your employees sign a statement verifying that their day-care service meets IRS requirements.

From a company standpoint, assisting your employees with their child-care needs is good business. All surveys to date have shown that child care saves a company more money than any other employee benefit. It allows a company to recruit employees more effectively, improves turnover, reduces absenteeism and increases the productivity of employees.

Publishing companies don't need to become experts in child care. however, they do need to address the hottest employee issue of the decade. Whether you establish a day-care center, join in a consortium or provide tax-deductible assistance, the most important message here is that to continue to attract and retain many of your most important people, you will need to provide solutions to the child-care problems facing your employees.

Some other helpful policies that you may also consider includer flextime, which permits employees to vary the time of day at which work begins and ends; flexible leave policies, including personal leave for short-term needs; and extensions of maternity or paternal leaves, allowing full-time employees to work fewer hours with reduced pay on a temporary basis while they arrange for child care.

At the very least, every company can show its employees what to look for in child care. "How to find and evaluate high quality child care" is a 25-minute video produced by Developmental Child Care of Westport, Connecticut. It costs about $500 and can provide your employees with everything they need to know about hiring a babysitter, choosing a child-care center or family day-care home, and what questions to ask of child-care providers.

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