Child care to the rescue - Focus on Benefits - emergency child care as an employee benefit

HR Magazine, August, 1999 by Nancy Hatch Woodward

Back-up day care options can keep employees working when their children need last-minute care.

Your company jumped on the family-friendly bandwagon some time ago; as a result, you now offer flextime, paid time off and even a referral service that helps employees find day care for their children.

But that may not be enough.

Many companies are finding that to be truly family friendly - and to ensure that employees are able to come to work and be productive - they must consider another benefit: emergency child care.

When children are too sick to attend day care or school, or when their primary caregivers suddenly are unavailable, working parents often are left with limited options. Parents may desperately search for family members or friends to stay with their children, but such options often don't provide viable solutions.

Teri Karole, senior vice president of corporate benefits for PaineWebber in Weehawken, N.J., has seen how difficult it can be to find last-minute child care. "We had one senior employee who had all kinds of back-up arrangements on her own, using family and friends, and yet she found herself stuck. All four of her personal back-ups fell through."

Business Pays Either Way

When working parents have to stay home with their children, corporate America pays a hefty price - whether the cause is the unexpected absence of a child care provider or a child's illness.

The failure of regular child care options causes employees with children to miss an average of eight work days per year, says Denise Lipton Dennis, founder of Lipton Corporate Child Care Centers, Inc. (LCCC) in Washington, D.C.

The resulting cost to business is high. "Companies with 300 employees lose an average of $88,000 a year because of absenteeism, shortened work days and lost work hours due to child care problems," says Lipton Dennis, citing a 1992 study by the Child Care Action Campaign, based in New York. U.S. corporations lose over $3 billion a year as a result of child care breakdowns, Lipton Dennis said.

And those numbers don't even take illness into account. On average, children five years old and younger are sick six days a year, says Steve Lojacono, president and CEO of Get Well Centers in Nashville, Tenn., citing a study published in 1994 by the American Academy of Pediatrics. "That's just for gastrointestinal illness," says Lojacono, whose company specializes in providing day care for sick children. "It doesn't even begin to include chicken pox or other illnesses."

For some companies, the costs of such absenteeism and lost productivity make it worthwhile to provide emergency child care services. That's true for SunTrust Bank in Nashville, Tenn. "A perfect example of how important this benefit is to our company is when we are faced with the absence of a teller," says W. Thomas Van Etten, the bank's senior vice president and HR director. "These people are essential for us to have at work every day. When customers come into the bank, they need to see that it is fully staffed."

Lipton Dennis believes that offering emergency child care provides employers a number of benefits. "It enhances the companies' public image," she says. "It reduces absenteeism, tardiness and turnover along with easing employee anxiety and stress. And hand-in-hand with that is the fact that it increases morale and productivity."

Considering Child Care Options

There are many options for offering emergency child care, such as providing on-site care or contracting for care "slots" at local child care centers or arranging for caregivers to come to employees' homes. However, some of these options are less likely than others to suit the needs of most employers. (See "Unlikely Options" on page 88.)

One arrangement used by companies both large and small is shared slots at centers offering varying kinds of last-minute child care. Some provide only back-up child care for when an employee's regular day care services have fallen through; others provide sick care for children who are iii.

For example, Lipton Dennis' LCCC provide only back-up child care. Other facilities, such as Lojacono's Get Well Centers, provide corporate child care for sick children whose parents must be at work. "We have a convalescent care room for children who are recovering from surgery or more serious illnesses," says Lojacono. "In addition, we have two GI [gastrointestinal] rooms, two respiratory rooms and a contagious care room, which handles things like chicken pox."

SunTrust Bank recently signed up for sick child care service from Get Well Centers. "They have strict rules about how sick the child can be, but when one of our employees has a child who is iii and the temperature is under 102.8 degrees, this gives us an alternative," says Van Etten. "And our parents are very comfortable with it, because it is only a short walk from where we are located."

Employers can contract with back-up child care centers for a set number of slots, which the center always has available for company employees. Usually, the number of slots is based on the number of employees. LCCC suggests that companies looking for back-up child care buy one membership slot for every 350 to 500 employees, depending on the type of business and the demographics of the workplace.