Workforce.com

Child-Care Models

April 1, 2004

    Savings accounts: In Hewitt’s 2003 study of large employers, giving employees an opportunity to put aside pre-tax earnings for child care in flexible spending accounts, or FSAs, was the most popular way of helping with child care. Ninety-four percent of the companies surveyed offered this benefit, which is inexpensive to provide. Some companies also provide a matching contribution.

    Referrals: Forty-two percent of companies help employees find care, sometimes through their own corporate hotline (6 percent), but more often by contracting with an outside referral service such as LifeWorks Solutions, which is used by 37 percent. Discounts and stipends: Ten percent of large employers pick up part of the cost of employees’ child care, either by arranging for employee discounts at outside providers (9 percent) or by paying them a child-care stipend (1 percent). Lingle says that when she was at KPFG, for example, the insurer bought a number of corporate memberships at a child-care center located in the same building as its Washington, D.C., office, and negotiated deals with national child-care chains such as Le Petite Academy and KinderCare.

    Corporate-supported community child-care centers: Only about 2 percent of large employers use this method, in which a company will fund quality improvements at local day-care providers used by employees, paying for teacher training or providing computers for kids. IBM is the most extensive user of this method, with an interesting variation. Since the early 1980s, the global computing giant has spent somewhere in the vicinity of $200 million building and equipping child-care centers in 72 cities around the world, which it then has turned over to local companies to own and operate. By paying for bricks, mortar and furniture on a onetime basis, IBM is better able to control its costs.

    Corporate-owned on-site or near-site centers: According to the Hewitt survey, 13 percent of large U.S. companies offer employees spots in child-care centers--10 percent in subsidized on-site or near-site centers, and 1 percent in centers fully funded by employee fees. Employees love on-site care, but it’s expensive--a top-quality center can cost $3 million and up--and consultants say it’s difficult to create enough capacity to include every employee’s child. Another 2 percent of companies have partnered with other local companies to create child-care centers for all their employees.

    Backup emergency care: Thirteen percent of large companies in the Hewitt survey help employees when the regular babysitter is sick or the community day-care center is closed. Consultants say that backup care may be the wave of the future, since it more than pays for itself in productivity savings.

    Older-kid care: Three percent of companies provide after-school care. The same number offer summer camp programs for employees’ kids.

Workforce Management, April 2004, p. 38 -- Subscribe Now!