And baby makes three.

And Baby Makes Three

The arrival of a baby at home often means the arrival of headaches at work. Suddenly, the traditional employer-employee relationship takes on a third partner in diapers--and problems caused by the absence of affordable and dependable childcare come crawling into the office. Child-care problems are becoming more critical as an increasing number of women and single parents enter the work force, and more managers in mid-career decide to add children to their portfolio of professional accomplishments.

A few progressive companies are modifying company work rules and benefits programs to accommodate the working parents they employ. Perhaps more companies will follow their lead as the pool of skilled workers shrinks during the next decade and employers find they must devise child-care options to attract and retain working parents. Communicators should be tuned into this problem which will rank among the most challenging in the internal area for the next few years.

Today, fewer than 10 percent of American employers offer any kind of child-care aid to their employees. The US Congressional Women's Caucus reports that only 3,300 of the 44,000 American employers with 100 or more employees offer any type of child-care assistance. Of those who do, more than half offer dependent care spending accounts through a flexible benefits plan, 750 sponsor child-care centers, and 80 offer child-care information or referral services.

In what is believed to be the first comprehensive survey of employer attitudes toward child care, the American Society for Personnel Administration (ASPA), headquartered in Alexandria, Va., last year polled more than 1,500 of its members. Fully half of the survey respondents reported their companies offer no form of child-care assistance, and cited a variety of reasons why.

Cost ranked as the biggest obstacle to setting up child-care programs, with questions of liability following right behind. Other top-ranked stumbling blocks included the complexity of child-care programs, unfamiliarity with child-care options, and a lack of commitment from top management.

"Most of the people in top management positions are removed from the problem," wrote one survey respondent, an administrative officer for a mid-sized service company. "Either their children are grown or a family member provides child care free of charge. It is difficult to get across the stress and anxiety child-care problems cause our employees."

Survey respondents also cited as impediments concerns about the lack of research into the long-term benefits of company-sponsored child care, a shortfall of child-care providers, lack of information about the kind of child-care assistance their employees need, and a desire to provide equal benefits to all employees, whether or not they have children. One in four survey respondents said they believe business should not be involved in child care.

Concerns such as these come as no surprise to Dana Friedman, a consultant to the Conference Board's Work and Family Information Center in New York. But she believes many of the objections raised by employers are more perceived problems than real ones, and that they can be surmounted.

Take, for example, the issue of cost, the first objection raised when a company considers the most obvious child-care program, building a day care center for the children of employees. As discussions continue, other drawbacks to daycare centers surface. Perhaps space is not available in a crowded downtown area, or perhaps the company worries about liability, or is not willing to take on the administrative challenge of staffing and running a center for children.

Alternatives to On-Site Centers

Should the construction of a daycare center seem impractical, Friedman suggests employers not abandon the idea of child-care assistance but look instead at less expensive, less complicated options to help working parents. Those might include flexible benefits, flexible work schedules or parenting seminars.

As for issues of equity, Friedman reports employers worry that their childless employees may protest the company's child-care benefits, but those objections seldom materialize. More often the company's employees with children who can't use the company's child-care benefits (the daycare center is too far away or there aren't enough spaces available) complain. Most equity issues, notes Friedman, can be handled fairly when companies offer flexible benefits plans. Employees can then pick and choose from a wide variety of benefits, such as child care or elder care, more life insurance, or more vacation days. Notes Friedman, "Companies are realizing that no one solution is meeting everybody's needs."

Another reason why flexible benefits plans are becoming popular, reports Marie Dufresne, senior vice president at Hay/Huggins, New York, and an expert on compensation issues, is employer concern about "pouring money into benefits programs (such as child care) that benefit only certain portions of the employee base."

Particularly appealing to employers and employees alike are those flexible plans structured under a "spending account" or "tax savings account." Under a provision of the US Internal Revenue Service code, employers may set aside a certain portion of employees' salaries in pre-tax dollars, which employees may use to purchase benefits such as child care. The employee's salary stretches further and the employer saves by not contributing taxes on that portion of salary. The tax savings to the company usually cover the administrative costs of setting up such a program. And, comments Paul Sanchez, a communication consultant at The Wyatt Company in San Diego, "the payback can be substantial in terms of public relations."

Sanchez predicts that as more employers identify significant drawbacks to building on-site child-care centers, they will instead run cooperative daycare centers, or buy spaces for employees' children in established commercial centers, or channel contributions earmarked for daycare through a third party, such as the United Way.

Dufresne predicts the growing popularity of other creative alternatives to on-site daycare centers, including vouchers where the employers pay a certain amount toward daycare at an approved off-site facility, and referral services that point employees toward neighborhood daycare providers.

Indeed, despite the many employer concerns about child care reflected in the ASPA survey, the majority of the respondents not now offering child-care assistance reported that they are at least assessing their employees' child-care needs and investigating the many possible benefit options.

Says Cate Bower, ASPA's vice president for communication and public relations, "The survey showed that a lot more companies are doing something. It may not necessarily be called child care, but whether it's flexible hours or flexible benefits, it has the same end result of helping working parents."

Companies See the Need for Daycare to

Keep Good Workers

Despite the lack of support most American companies have given to working parents to date, personnel experts believe that more and more companies will soon respond to the need for child care. The change, they say, will be driven by three factors: more vocal employee demand for employer-sponsored child care, the changing nature of the work force and increasing competition for skilled workers.

Employees are just beginning to ask their employers for help, notes Friedman, through letters in the suggestion box and more direct approaches. At the same time, notes Bower, employers are learning how to accurately assess the child-care needs of their employees, something ASPA is promoting among its member companies.

Further, child care has been elevated to a matter of concern to employers. "We no longer have Ward Cleaver off working while June stays home taking care of the kids," Bower says, referring to the stereotypical family portrayed on the popular US 1950's television sitcom, "Leave It to Beaver." The rapidly increasing number of families headed by a single parent, along with dual-career households, has made the availability of child care an issue that affects employee productivity and dependability.

"Companies used to take the approach that if you have a problem at home, you should leave it on the company doorstep," says Bower. "Today we see that's an unrealistic expectation, that we all have a life before eight and after five and what's happening in it makes a difference in how effective we are on the job."

Hard numbers on just how much the child-care issue affects employee productivity--and hence the employer's bottom line--are hard to come by yet, though Friedman notes she's currently at work on such a study. Already, managers whose companies offer child-care assistance believe the programs are yielding returns in increased employee loyalty and decreased turnover, she notes.

Adds Dufresne, "We've moved into a different employer-employee relationship in the past few years. I don't know anybody in my generation who plans to stay with one employer for 25 or 30 years. Employers need to make the work place attractive enough to keep the employees they've spent time and money training."

Finally, companies are finding that child-care programs can be a powerful recruiting tool as more women enter the work place and as the pool of skilled workers in the labor force continues to shrink.

Says Bower, "If a company is looking for new workers in a tight labor market, and the primary source of new employees is women of child-bearing age, the logical way to draw them in is to take care of their children while they're working for you."