Joel Abern was anxious. His little boy, Andrew, was cranky, difficult, not his usual sunny self.
Several times during a busy morning at work, Abern found himself thinking about the 3-year-old. Was he sick? Did he need help? It was hard to concentrate.
But Abern is one of the lucky ones. He didn’t need to get on the phone, hop on a train or head for the car to check on Andrew. All he had to do was walk down the hall at lunch time, to the on-site child-care center at Northern Trust Co.
“Someone would have to make me an incredible offer for me to leave an environment where I know my son is so well taken care of,” said Abern, 37, a training specialist.
What once was quite unusual –employer-sponsored child care–is slowly becoming a trendy workplace perk as companies look for ways to help employees juggle the competing demands of work and family.
The trend would get a boost from President Clinton’s ambitious $21.7 billion child-care initiative, announced Wednesday.
The president’s proposal includes the first-ever tax credits, worth $500 million over five years, for child-care services supported by business.
Companies would qualify for the credit by building or expanding their own child-care centers, reserving child-care slots for employees at centers elsewhere, training child-care workers, or offering child-care resource and referral services.
Several Chicago business leaders greeted the president’s plan enthusiastically, citing the need for programs that help recruit and retain employees in an extremely tight labor market.
“Anything that keeps the issue of the needs of working families in front of corporations is important,” said Bill Setterstrom, senior vice president of Northern Trust and a longtime advocate of corporate support for child care.
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The proposal is long overdue, said Josie Disterhoft, director of children’s day-care services at Lutheran General Hospital, which owns a center serving 200 children. Most of their parents work at the medical center.
“The education and care of children from infancy on is a public good as important as public education, and it is important that the government step in with support,” Disterhoft said. “Market forces have not served us well in this field, in terms of financing child care, nor can corporate America solve this problem on its own.”
The president’s proposal is likely to have several effects if it passes, business leaders and child-care experts said:
– Symbolically, it will send an important message to corporate America that the government backs family-friendly workplace programs, and considers child care a major policy issue.
“Business leaders have wondered, if corporate-sponsored child care is such a good thing, why hasn’t the president supported it?” said Scott Mies, director of work, family and life benefits at Fel-Pro Inc. in Skokie, whose child-care center is nationally recognized as a model. “I think this will make a very big difference to business.”
– Practically, the proposal will give financial help to medium and smaller-sized companies considering setting up child-care centers but worried about the rather sizable costs of doing so, which can easily run in the hundreds of thousands of dollars.
“This might give these companies just enough financial incentive to push them toward action,” said Marguerite Sallee, president and chief executive of CorporateFamily Solutions, a Nashville company that operates child-care centers for Illinois companies such as Sears, Roebuck and Co., Northern Trust, Household International Inc. and Nalco Chemical Co.
– Also, the plan could prompt businesses to expand their menu of child-care options, such as backup care for families whose normal arrangements break down. Many companies that have set up child-care centers for employees are now looking at such options, according to Roger Brown, chief executive officer of Bright Horizons Children’s Centers, a Boston-based operation of corporate child-care centers.
Currently, the most popular form of corporate support for child care is dependent-care spending accounts, offered by 97 percent of companies, according to a 1996 survey of 1,050 major firms by Hewitt Associates, based in Lincolnshire. The pre-tax accounts, often subsidized by employers, help employees pay for child care.
In second place were resource and referral services, supplied by 40 percent of the firms in the Hewitt survey. Such services, which have been common for years, give parents information about child-care options in their communities.
Not listed on the Hewitt survey, but growing rapidly, are employer-sponsored child-care centers, either on or off company premises. “We see extraordinary momentum in this area,” said Sallee, of CorporateFamily Solutions, which has started 11 such centers over the past 12 months and now runs 96 child-care programs for companies across the country.
One is Household International, based in Prospect Heights, which last year conducted a survey of its 14,000 employees to get a better handle on their personal and family needs. “We’re asking employees to do more with less, and we feel we need to give as much as we can back to them,” said Mary Bilbry, Household International’s director of benefits design.
The result? Household International this year will build a center for 152 children serving workers in Las Vegas, and an emergency child-care center for workers in Salinas, Calif. Its original center, in Wood Dale, Ill., has been open since 1992, helping the company “attract and retain” employees who are largely female and in their childbearing years, Bilbry said.
“The labor market is very, very competitive, and we have to do anything we can to bring in qualified employees,” she said, calling the president’s plan an “important and positive move.”
On-site child care was an important new benefit for Sears when it transferred nearly 6,000 employees from Chicago to suburban Hoffman Estates. Since 1992, the giant retailer has operated a center housed in its own building, serving 182 children. Like many companies, Sears subsidizes building, maintenance and management expenses, to the tune of about $265,000 per year, and offers scholarships to lower-income employees.
“We believe if our employees can focus more on what they’re doing at work and worry less about their children, that will help productivity,” said Paula Davis, a Sears spokeswoman.
It’s mostly anecdotal, but the evidence gathered to date about corporate-sponsored child-care centers appears to support that claim.
One study by Allied Signal of New Jersey found that absenteeism among parents with children in its center was reduced by 89 percent.
Another study, by Chase Manhattan Bank of New York, found that its backup child-care program for emergencies, which made it possible for parents to stay on the job rather than miss work to care for their youngsters, translated into savings of $800,000 in the first year of its operation, a 112 percent return on the bank’s investment.
However, the leading researcher in this field, Dana Friedman, who is employed by CorporateFamily Solutions, recently evaluated 17 studies and concluded that the greatest impact was on employee recruitment and retention.
No wonder, then, that the Illinois Chamber of Commerce thinks President Clinton’s child-care tax credits are a good idea. “This could be a tipping point,” said Howard Parker, the chamber’s human resource information manager.