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Child Care 'Investment' Creates Competitive Advantage
Child Care Is 'Great Investment,' Citigroup HR Pro Says

By Kathy Gurchiek  3/5/2007
 

PHOENIX—Employer-sponsored child care is a sizable investment that has given Citigroup a competitive advantage, said the vice president of human resources at Citibank during the three-day Work-Life 2007 Conference held here and sponsored by WorldatWork and the Alliance for Work-Life Progress.

Doug Miller was one of the speakers at the Feb. 22 session, “The Numbers Tell the Story: Employer-Sponsored Child Care as a Strategic Business Resource.” He's been at Citigroup for 20 years and with the child care program the past five years.

Citigroup, named one of the “100 Best Companies for Working Mothers” by Working Mother magazine, owns or participates in 12 child care centers in the United States.

That number includes seven full-time “family centers” the company built on or near its call centers in South Dakota, Maryland, Nevada, Missouri, Florida and Texas, the latter of which has two family centers.

At family centers, employees can bring their children every day. An eighth center opens in Jacksonville, Fla., in July 2007. It will have the capacity to care for 440 children daily, according to the company’s web site. That’s about one slot for every 10 or 11 employees, Miller said.

In addition, Citigroup offers employees access to two on-site backup centers and three near-site backup centers in the New York/New Jersey area.

Employees pay about half the cost to use Citigroup facilities managed by vendor Bright Horizons, or at non-Citigroup back-up centers.

“It's a sizable investment,” Miller acknowledged. However, “If we can break even, we think it's a great investment,” he said.

Return on Investment

U.S. employers lose an estimated $4 billion annually attributable to absenteeism related to child care, according to Peter G. Burki, CEO of LifeCare. LifeCare recently partnered with Knowledge Learning Corp. Partners to provide a network of more than 1,900 national backup child care centers.

“With a number like that,” he said of the $4 billion figure, “backup care leaps into the ‘imperative’ category—something that every employer needs to address immediately, both to improve their bottom line and to support their employees,” Burki said in a press release.

Citigroup initially ventured into child care as an employee benefit when it opened its first full-service center in 1986 in Sioux Falls, S.D. That center, which has a penetration rate of about one child care slot for every seven employees, was a way to gain an edge in a competitive labor market, Miller said.

It saw child care as a benefit aligned with its core values and with the potential to have a direct impact on its key business drivers. In addition, it viewed child care as enhancing the overall availability of high-quality child care in the communities where it did business, Miller said.

Although he did not divulge how much the full-service centers and back-up center memberships have cost Citigroup, “these centers in many ways pay for themselves.” he said.

“We feel that child care gives us a critical advantage,” Miller said. He pointed to internal return-on-investment studies Citigroup conducted to substantiate overall expenditures, to calibrate child care offerings in relation to other employee benefits, and to support further investments in employer-sponsored child care.

Its 2003 ROI study, he said, found the benefit linked to:

    • A 66 percent reduction in turnover among center users compared to non-center users.

    • A 98 percent retention rate of top performers.

    • A discovery that 10 percent more high performers were among family center users compared to non-center users.

Miller said follow-up findings in 2005 found:

    • A 51 percent reduction in turnover among center users compared to non-center users.

    • An 18 percent reduction in absenteeism.

A 2006 ROI study currently is under way.

Child Care Considerations

Employers considering offering child care, Miller said, should understand child care service delivery, the cost of care and its availability, what is available in the local market and any challenges it presents, and the importance of quality child care and school readiness.

In addition, employers need to consider the business case for offering child care. Whether the goal is improving recruitment and retention, supporting the advancement of women, reducing absenteeism, retaining high performers, or being an employer of choice depends on the business, he said.

The investment should be measured, and he emphasized the importance of measuring what matters. Do this by:

    • Identifying business drivers.

    • Defining positive outcomes.

    • Collecting data and monitoring progress.

    • Measuring and reporting that impact.

    • Making an ongoing commitment to measurement.

Drop-in Nannies

Another option, not mentioned at the conference session, is the use of “drop-in nannies.”

ComPsych, a leader in resources such as employee assistance programs, behavioral health, work/life and wellness programs, and crisis intervention services, found a 24 percent jump in using home health care specialists to provide emergency backup for working parents.

“With dual-income households and employees working longer hours, finding backup care for a sick child is a bigger problem than ever before, said Dr. Richard A. Chaifetz, chairman and CEO of ComPsych.

“Because of the decline in traditional sick-child day care centers, we continually add nannies and prescreened in-home care professionals to our list of providers for employees,” he said in a press release.

Kathy Gurchiek is associate editor for HR News . She can be reached at kgurchiek@shrm.org

Related articles:

Give Us Your Sick, HR Magazine, January 2007

No Baby Sitter? Emergency Child Care to the Rescue, SHRM Compensation & Benefits Focus Area, May 2005

Do Your Family-Friendly Programs Make Cents?, HR Magazine, January 2004

Manager, Child Care Center, SHRM Knowledge Center
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