Why subsidize childcare? Gender equity, employee retention sweeten the deal, say Michigan execs. ⋆

Onstage at the Mackinac Policy Conference, Martha Todd, the owner and board chair of the Kalamazoo-based company Kalsec, recalled juggling being a single mom with work and graduate school and how it inspired her to bring in-house childcare to her own employees.

Todd’s experience isn’t uncommon in a workforce where, according to U.S. Census data, roughly 23.5 million American women are balancing motherhood and their careers. And as the pandemic threw the struggles of working parents into sharp relief, a conversation about accessible childcare has widened from government-provided options to exploring what businesses can do to make working parenthood easier for their employees.

Terrah Opferman

Todd and Scott Nykaza, Kalsec’s former CEO, joined moderator Terrah Opferman of the Michigan Region of J.P. Morgan Chase and employment economist Timothy Bartik in a Thursday panel to discuss the changing landscape of child care in the private sector. Todd said that her company’s approach to the issue was born out of a desire to remove barriers for women facing the same struggles she did. 

“It’s no surprise that you don’t see equal numbers of women and men in management and leadership and in boardrooms,” Todd said. “And it’s not because of lack of talent or ambition or credentials. It’s just that in our paths, we tend to take the burden of those [parental] sacrifices heavier.”

Kalsec, a food and beverage ingredient manufacturer, houses its childcare facility in the old farmhouse of the family farm its campus occupies. The farmhouse contains a daycare and early learning center for employees’ children aged between six months and six years. 

Nykaza said that while getting the center up and running posed challenges that the company hadn’t previously dealt with, it paid off in the long run.

“We had to start thinking a lot differently because we’re a food ingredient company,” Nykaza said. “We were not a childcare provider. And so that means what is the insurance liability? What is the security for kids that are there? What are the audits that we need to do? We had to get new skill sets.”

Building an employee childcare center meant having to recruit and train teachers and early care professionals, something that Todd and Nykaza said opened their eyes to the low rates of pay faced by teachers and childcare providers in Michigan.

“We’re like okay, ‘what’s the going rate for paying teachers?,’ and I guess we all know, but it was kind of shocking how little teachers get paid,” Todd said. “So you’re trying to make this business case, but you’re thinking ‘how can we, as a company that says that we honor and value and respect our employees, hire people and pay them $11 an hour and expect them to work around the clock basically year round?”

Bartik said that teacher pay is critical to making childcare more accessible on a community level, and that employers seeking to provide childcare for their workers need to be prepared for the expense.

“ChatGPT is not going to be taking care of kids,” Bartik said. “We’re not going to be able to automate this. This is a labor intensive sector inherently. It’s going to be expensive.”

Tim Bartik

As for incentivizing businesses to step up in providing childcare, Bartik said it’s more complicated. Michigan currently operates under a policy called Tri-Share, which divides the burden of childcare three ways between the parent, the state, and the employer. Gov. Gretchen Whitmer has said that she hopes to expand upon Tri-Share’s provisions in the state’s 2024 budget, a solution that Bartik said could help push businesses to do more.

“The state could encourage more employers to get [childcare centers] by frankly upping the state’s percentage,” Bartik said. 

The panelists also discussed the economic benefits of employer-provided childcare, including the positive outputs associated with a preschool education and the hiring value of offering childcare to prospective employees.

Nykaza said that for Kalsec, starting the child care center prior to the COVID-19 pandemic allowed the company to study the program’s benefits over time when it came to employee retention.

“We’re starting now to do a lot more benchmarking,” Nykaza said. “So we’re measuring employee satisfaction. We’re measuring retention levels of employees that use the childcare center. We’re looking at those sort of statistics and we’re getting past COVID.”

Todd said she’s already experienced the childcare center having an impact on hiring at Kalsec, which she said employs several in-demand scientists.

“We have a couple of our most brilliant triple PhD scientists that said to us directly, ‘This is the selling point for me,’” Todd said. “‘You know, I have five job offers.’” 

In Kalsec’s first survey of employees to measure the success of the farmhouse child care facility, Todd said the results were stunning.

“We pulled apart the data and focused on what the scores were for the farmhouse families versus the rest of the company and across the board,” Todd said. “It was an average of 13 points higher on every single question that was asked, whether it had to do with culture, whether it had to do with my ability to advance my career here, or whether we do enough for community engagement.”

Whitmer to propose budget increases for childcare, contraception, school meals and maternity care

Bartik said that programs like Kalsec’s could also contribute to solving Michigan’s population crisis. 

“If Michigan had by far the highest quality, most accessible, most affordable childcare and preschool system for anyone living here, it would mean a lot,” he said. “Certainly if you knew that your child would have affordable, high quality childcare and preschool, you would think twice about moving to some other state.”

Ultimately, Todd and Nykaza said, providing childcare has been a net positive for their business. 

“I wish my mother had this opportunity when I was growing up,” Nykaza said. “My mother could have done a lot of amazing things – she could have gone and done a lot more in life, and she could have had a much more fulfilling life, but she was relegated to the role of watching the kids.”

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authored by Lily Guiney
First published at https%3A%2F%2Fmichiganadvance.com%2F2023%2F06%2F01%2Fwhy-subsidize-childcare-gender-equity-employee-retention-sweeten-the-deal-say-michigan-execs%2F