Advertisement

Companies Work to Keep Parents on the Job : Child Care: Firms that want to hold on to valuable workers know not to ignore day-care needs. The help includes tax-free accounts and on-site centers.

Share
TIMES STAFF WRITER

Despite three successful years as distribution manager for Bestronics Inc., a small electronics distributor in San Diego, Pam Kenny was ready to leave her job.

The Rancho Bernardo woman liked her boss and had put in many long hours at the company. But the problem was that after she became pregnant with her third child, she and her husband began calculating the costs of keeping a 3-year-old, a 2-year-old and an infant in day care every month.

“It was getting to the point that we realized it was cheaper for me to stay home versus paying out all that money for day care,” she said.

Advertisement

Bestronics, which employs only six people, didn’t want to lose her. So her boss, along with the head of another neighboring company whose employees were experiencing similar problems, turned to Mary Delaney, president of CARE-nection Inc., a child-care consultant service based in San Diego.

Delaney met with Kenny and the other employees, talked to them about their needs, and put them in touch with several licensed day-care providers. At Delaney’s urging, Bestronics agreed to put $410 of Kenny’s monthly salary into a tax-free account that goes toward paying her child-care bills of $840 a month. In addition, Bestronics began contributing $300 a month toward her bills, half of which the company can claim as a tax credit under state laws.

A year and a half later, Kenny remains happily employed. Before work, she and the other parents drop their children off at the home of an experienced day-care provider about a mile from where they work.

“It’s a win-win situation,” said Scott Cameron, vice president of Bestronics. “We were successful in keeping a valuable employee and she was successful in maintaining her career path.”

Bestronics is one of a small but growing number of San Diego businesses beginning to deal with the needs of working parents by setting up company-sponsored day-care programs.

Although there are no regional statistics on the number of companies that are helping their employees with their child-care needs, child-care experts say San Diego is beginning to catch up with national trends that show a 45% growth in corporate-sponsored child care since early 1988.

Advertisement

A corporate child-care survey by Burud & Associates in Pasadena identified 3,457 companies nationwide that, as of February, 1988, were providing some kind of child-care assistance to their employees. President Sandy Burud said that while the number is now closer to 5,000, that still represents only a tiny fraction of the nation’s 6 million businesses.

In a trend that mirrors the rest of the nation, more than half the new entrants into San Diego County’s labor force in the 1990s are expected to be women, said Jeff Tayman, a senior planner with the San Diego Assn. of Governments.

“There will be no letup in couples and workers having kids,” he said. “As a result, child care as an issue is big now but will only get bigger in the future. In fact, it threatens to become the issue in San Diego in the ‘90s.”

The benefits of corporate-sponsored child care to both employee and employer are well documented. A recent study published by Burud found that 35% of all employees have children under age 12, 71% of those parents use child care and 82% of the parents have experienced problems in the care arrangements. The study, which surveyed 76,000 California employees over a five-year period, also found that 25% of the parents had to bring a child to work, 58% said they had difficulty concentrating and being productive and 23% had considered quitting because of their child-care problems.

Other studies have shown that employees receiving some kind of child-care assistance have higher morale, lower absenteeism and a lower turnover rate. In turn, their employers gain an important recruitment tool and a more positive image.

A lack of child care is frequently identified as the most important factor contributing to worker stress. In San Diego County, there are no child-care slots or after-school supervision for three out of every 10 children under age 13 who need it, according to the San Diego Child Care Coalition. The ratio is nearly identical in Los Angeles County.

While child care is clearly an issue employers can’t afford to ignore, there is some disagreement over the best approach a company can take. More than 700 corporations nationwide maintain child-care centers on the corporate premises. One such company is Evergreen Nursery in Scripps Ranch. Evergreen owner Norm Osborne said the child-care center, which has space for eight children and costs the company $40,000 a year to operate, “helps in recruiting and makes it easier for employees to come to work.”

Advertisement

Evergreen pays the salaries of the child-care center’s staff without charging a penny to employees whose children are enrolled there. In return, Osborne gets the loyalty of employees such as Karon Richards, 38, of San Diego, who insists that she wouldn’t leave Evergreen even if another employer offered her a lot more money. “My peace of mind and the care of my son are a lot more important than dollars,” she said.

A San Diego company that provides part-time, on-site child care on a seasonal basis is the accounting firm of West, Johnston, Turnquist & Schmitt. During the January-to-April tax season, when employees are required to work Saturdays to finish preparing clients’ returns, the company transforms its teak-furnished conference room into a playpen for 10 to 15 children.

The company’s only expense in providing the service is the salaries of the YWCA counselors employed to supervise the children. That amounts to about $1,000 a year, said management adviser Pat Coleman, whose 10-year-old son is a three-year veteran of the company’s child-care center.

However, despite the enthusiasm most working parents have for on-site child care, San Diego’s children’s advocates warn that the arrangement is not for every company.

Instead, they tend to encourage the “business consortium” approach in which several companies come together to jointly build child-care centers that all their employees can use.

The creation of consortium child-care centers is key on the agenda of San Diego’s newly appointed child-care coordinator, Deborah Ferrin.

Advertisement

“We would like to really encourage companies that have had child care on the back burner to create partnerships in like groups,” Ferrin said. While San Diego now is home to at least six consortium centers, “we are just starting to develop this idea,” she said.

The Downtown YMCA Child Care Center, founded in February, 1986, with $50,000 in contributions from Union Bank, San Diego Trust & Savings, the city of San Diego, HomeFed Bank, San Diego firefighters, Great American Bank, San Diego Gas & Electric Co. and the San Diego Junior League, is often touted as a model example of consortium-sponsored child care at its best.

The center is open to the public at large, although employees who work for the companies that helped create it are given preference when competing with other parents for the 40 slots. None of the companies that helped build the center assists its employees in actually paying for the care, which costs from $80 a week for children 2 to 5 years old to $135 a week for infants.

The trouble is that there are employees of consortium member companies who can’t get their children into the center. The center’s director, Carol Lobb, had urged the companies to reserve spaces for their employees and then charge them for use of the center. But none of the companies was willing to make that financial commitment, forcing the center to take in more non-consortium families, she said.

As a result, only 25% of the day-care slots are now filled by children whose parents work for consortium companies.

Burud, the Pasadena child-care expert, said companies that are nervous about providing child care “really like consortiums because of the shared risk and shared expense. But what happens with consortium programs very often is that they can’t serve all the people who would use it, so the value to them is diluted. They also don’t have the same recruitment value to the employer. The public relations value is diluted because you don’t get all the glory for yourself. And you do everything by committee.”

Advertisement

Besides, she added, what parents really want are on-site child-care centers, more than any other employer-sponsored option.

“It’s the fact that they have a greater sense of security that their child is nearby and they can be more of a participant in the child’s life instead of being so removed from it,” Burud said.

But the cost, liability and commitment that goes into creating an on-site center frightens many employers from providing any kind of child-care assistance at all, said Jean Brunkow, president of the San Diego Child Care Coalition.

“The on-site child-care facility is the first solution that companies look to,” Brunkow said. “They hear more about that, it’s tangible and many companies have benefited from receiving a very positive image in the community because they created this center.” But it’s not necessarily in the company’s interest to “invest all this money in a center nobody uses,” she said.

Financial assistance programs are the most popular form of child-care assistance that companies offer employees.

For instance, Creaser Price Insurance Agency Inc. in Chula Vista spends about $1,400 a year to administer a federal tax credit program that allows its working parents to set aside up to $5,000 annually in pretax dollars for child care. For a nominal cost to the company, the program saves Creaser Price employees thousands of dollars a year.

Advertisement

Insurance agent Joyce Vogel, the mother of two boys, ages 6 and 4, said the tax-free account saves her $1,000 a year in child-care expenses. About half the company’s 40 employees are making use of the option, she said.

Meanwhile, a new state tax credit signed into law last year is making child-care assistance even more attractive to employers.

Under the state Employer Child Care Tax Credit, employers can apply for tax credits on 50% of what they spend in child-care assistance programs, up to a maximum of $600 per child. Any employer who decides to build a child-care center for his employees qualifies for a tax credit amounting to 30% of the center’s start-up expenses, up to a maximum of $50,000.

“Employers are extremely motivated by that credit,” Burud said. “It has sparked a lot of interest in the issue.”

Delaney is one of at least three child-care consultants in San Diego County who counsel employers about tax credits, conduct seminars for working parents and refer employees to pre-screened child-care providers. The consultants’ fees range from $60 to $100 an hour. Delaney, who advised Bestronics on its child-care problems, has advised 20 other companies in the past year, including General Dynamics, she said.

Although General Dynamics employees have been pushing for an on-site child-care center, company executives said they will wait until 1993 to make a decision on that option. In the meantime, the company has opened up child- and elder-care resource centers, expanded its sick-leave policy to allow parents with sick children to call in sick and has helped set up a referral network of family day-care homes, partly as a result of Delaney’s counsel.

Advertisement

“They are first steps,” Delaney said. “For any corporation thinking of implementing new policies, things like newsletters and workshops are an easy way to find out what their employees’ child-care needs are.

Advertisement