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IndyStar on 12/24/2019 by Stepfanie Romine
Companies say helping employees access quality child care is ‘just good business.’
Access to quality, affordable child care is a widespread problem across the country and in the state of Indiana, where it affects parents and children across the socioeconomic spectrum in all 92 counties.
But, in addition to the challenges Indiana families have accessing care, a lack of early childhood education options has an enormous economic effect in the state.
In 2018, the Indiana University Public Policy Institute and Early Learning Indiana, a nonprofit that provides leadership, advocacy and services to continually improve the early learning landscape statewide, released a report estimating that inadequate child care leads to $1.8 billion in direct costs to Hoosier employers annually. It also results in a $1.1 billion reduction in economic activity and $118.8 million less tax revenue every single year. That’s a total of nearly $3 billion dollars lost each year.
A lack of reliable child care has been found to keep parents — disproportionately women — out of the workforce, and it impacts their attendance, output and earning potential. The steep cost of child care and its limited availability often force families to make difficult decisions, selecting care options that do not meet their quality expectations or opting out of the workforce altogether to stay home with their child. They wait months and sometimes even years for a spot to open up in a licensed child care facility, and, on average, they pay $7,903 per year per child, according to the Indiana Early Learning Advisory Committee’s 2019 annual report. At a high-quality facility, the cost rises to $9,153 per child.
In northeast Indiana, two different businesses have found ways to help their employees ease the burden of finding quality child care and balancing work and family life. While the economic benefits are undeniable, both businesses decided to expand their family-friendly benefits packages to support the values upon which they were founded and want to represent.
Back in 2002, Indiana Stamp had about 30 to 40 employees. When four employees were expecting children around the same time — just as the company was preparing for a major expansion — the leadership team realized it needed to offer child care to its full-time workforce.
As many employers do, the company looked into providing on-site subsidized child care but ultimately determined it was not a feasible option, and instead decided to give financial assistance to employees. After an employee or their spouse returns from parental leave, Indiana Stamp pays 33% of the cost of child care until that child turns a year old, as long as the child is enrolled at a child care center that is rated as a Level 3 or higher in Paths to QUALITY, the state’s voluntary quality rating and improvement system for child care.
“We’re a third-generation family business, and the family part is very important to us — and always has been,” said Olivia Warner, president of Indiana Stamp. “I don’t just mean that we’re family-owned. We really try to create a culture that lets our employees know we value them as a person, not just as a worker. That’s one of the main reasons we’re doing this.”
Another big reason was to reduce turnover. Research has shown that offering child care benefits can help employers lower attrition rates by up to 60%. At her family-owned business, Warner said that it’s not uncommon for two generations from a single family to work together, and the average tenure for workers is about 15 years.
“Obviously, something needed to be done so our employees could come back to work,” Warner said. To date, between 10 and 15 employees — of about 60 total workers — have taken advantage of the benefit, which costs the company between $2,000 and $3,500 per child, Warner estimated. However, she said the company still comes out ahead, as it could cost $4,000 to hire and train a replacement employee.
“From a strictly financial standpoint, we’re still money ahead,” she said. “And we don’t like to lose people.”
Even with the help from their employer, quality child care costs can be too steep for some families. Warner said some of her employees simply can’t afford quality child care, even with the company’s subsidies. Parents also have to wait for a spot to open up. In Allen County, only 47% of children who need care are enrolled in a known program, slightly higher than the 40% of children statewide.
Warner hopes more employers see the benefit of offering child care support to their workforce. It’s an investment, she said, since those children are the future of Indiana.
“When kids are getting into high-quality programs, their brains are growing and developing as they should,” she said. “Down the road, that’s my workforce.”
About 4 miles away in Fort Wayne, recently the host of the 2019 Indiana Early Learning Summit focused on encouraging business investment in early childhood education, is an office of the law firm Barnes & Thornburg. The firm — one of the 100 largest in the country — has 15 offices nationwide and more than 1,000 employees. As of this past January, after unanimous approval by its managing partners, Barnes & Thornburg began offering 16 weeks of 100% paid parental leave to all employees — not only lawyers, but all support staff. Beyond the myriad benefits of parental leave itself, those extra weeks give parents more time to arrange for quality child care, too. Being unable to find reliable child care is a reason many parents cite for not returning to work after having a baby.
“This was about, ‘Who do you want to be? What kind of legacy are we trying to leave?’” said Dawn Rosemond, partner and director of diversity, professional development and inclusion at Barnes & Thornburg in Fort Wayne. “If we wanted to just do ‘something,’ we could have done so much less.”
When the firm’s Women’s Initiative Task Force assembled a group of employees, it included men and women from all sections of the firm’s business. The task force heard about the challenges facing parents in the workplace. One legal assistant shared her story about a physically demanding delivery that caused her to run out of leave. Previously, support staff received six to eight weeks of leave, while lawyers received 12 weeks.
“We realized this was not the best we can be,” Rosemond said. The change in policy for all employees ultimately happened “because she was bold enough to share this.”
“True inclusion can’t leave people on the cutting room floor,” Rosemond added.
The firm has already seen a cultural shift since implementing the policy on January 1.
“It’s hard to put a price tag on driving attachment, and that’s been immediate,” she said.
And in the long run, she said, supporting parents is about recruitment as much as retention. Treating your employees as humans will attract good workers — and like-minded clients. That’s why the firm decided to offer such extensive, universal benefits.
“This is not a reaction to the market,” Rosemond said. “This was us being pro-active and leading from the front.”
She said they hope other law firms — and other companies — take note and follow suit.
“Your clients, they want to align themselves with people who have like values,” she said.
So, in 2020, the firm will expand its family-friendly benefits even further, as part of Barnes & Thornburg’s commitment to creating a unique, forward-thinking culture.
“You spend more time at work than at home,” Rosemond said. “You have to care about the whole person.”
The firm is working with an outside agency to offer child care and elder care benefits to all employees. Those benefits should take effect in 2020, she said, and the firm is still working out the details, but it understood that offering parental leave was just the beginning. Child care assistance can provide even more peace of mind.
“If things are not going well at home, they’re not going to serve the client,” Rosemond said.
The positive effects from all angles add up to a healthier bottom line: “It’s really just good business,” she said.”
For more information about Early Learning Indiana, visit earlylearningin.org.