Family Care: Tips For Companies That Are Trying To Help

For executives wondering about work and family issues, these are confusing times. On Sept. 11, a consortium of 137 companies and nonprofit groups announced that they had formed the American Business Collaboration for Quality Dependent Care. Led by 11 corporate giants, including IBM, AT&T, and Johnson & Johnson, its goal is to raise $25 million to fund a variety of child-care and elder-care projects across the U.S.

Yet that very same day, the Family & Medical Leave Act headed for the White House--and a near-certain death at the hand of President Bush. He has vowed to veto the bill, which would mandate 12 weeks of unpaid leave for workers who must care for newborns or aging parents. Observes Fran Rodgers, CEO of Work/Family Directions Inc., a Boston consultant that organized the collaboration: "The country is struggling to determine whose responsibility dependent care is."

Like Bush, many companies oppose the idea of government mandates. So more and more, they're taking steps on their own--customizing programs to suit the ages, work habits, and peculiar concerns of their employees. Here's how a few of them are tackling the issue:

-- Employee subsidies. Helping employees finance family care is the most direct approach. Many companies do so by paying part of a care provider's bills or through tax-favored dependent-care funds, which let workers spend up to $5,000 annually in pretax dollars. Trouble is, many companies aren't sure they get enough for their money, and many employees need more than dollars to arrange dependable care.

-- Referral services. With resource and referral services, employees supply their workers with lists of sources for child care--and, increasingly, elder care and activities for school-age kids. The services are cheap--$9 to $30 per employee--which means almost any company can run such a program. Client companies of Dependent Care Connection, a national referral service, have from "200 to 30,000 employees--and we deal with anyone from clerical to executive," says President John B. Place. Such referrals can be especially useful to companies with a highly mobile work force. "The service is helpful and comforting," says Patti Arthur, manager of Equal Employment Opportunity compliance at Mobil Corp.

But referral services vary in quality, and "companies want to make sure the vendor keeps its resource lists updated and checked out," warns Susan Seitel, president of Work & Family Connection, a Minnetonka (Minn.) consultant. A bigger drawback: The burden for finding help still lies with the employee.

-- On-site facilities. A decade ago, "companies thought addressing these issues was just a matter of paying money," notes Ellen Galinsky, co-president of the Families & Work Institute in New York. "Now, they're concerned with enhancing the supply of care as well." For those companies, that often means on-site day care. For many workers, it's a dream benefit. Pam McMahan, vice-president of human resources for Dallas' Affiliated Computer Systems, has a daughter in the company center. "We commute two hours every day, and that's bonding time," she says. "We sing, we talk, she tells me what she does."

Fear of liability risks have kept some businesses from building centers, and child-care regulations are becoming stricter in many states. So most corporations that establish their own facilities contract out management to a professional. When the 2,500 employees at the Houston headquarters of Brown & Root Inc. asked for on-site care, the engineering-and-construction company hired Kinder-Care at Work, a division of the day-care chain. Housed in a new, $4 million facility, the nine-month-old center can serve 109 children, aged 6 weeksto 5 years. Employees often visit their offspring or take them out to lunch.

Custom-built centers come with specific economic and demographic demands: They cost at least $500,000 to $1 million to build and need a steady supply of at least 75 children to be cost-effective, says Marguerite W. Sallee, CEO of Nashville's Corporate Child Care Management Service Inc., which runs 23 centers for clients such as General Motors Corp. and Marriott Corp. In 1987, Du Pont Co. invested $750,000 in a day-care center near its plants outside Wilmington, Del. The day-care operator made some economic miscalculations, and the center failed to cover its costs. Quality slipped, and parents complained. In 1991, DuPont had to hire another manager, who now has the center running profitably.

-- Financing off-site care. To sidestep problems, many companies prefer to help pay the costs of care centers, programs, and other services set up off-site. The effort ensures that corporate employees get preferential treatment. When American Telephone & Telegraph Co. donates money to increase the capacity of a child-care center by, say, 30 slots, it reserves half of them for employees' kids, says Deborah Stahl, director of AT&T's Family Care Development Fund. Such donations provide a bigger bang for the buck: "You can give $25,000 to a local day-care center and get priority for your employees, vs. starting your own center, which is extremely costly. And you're getting involved in a business you know nothing about."

Some companies with irregular shifts need more flexible arrangements. With an average employee age of 27, America West Airlines Inc. has been experiencing a miniature baby boom among its 12,000 workers. But the Phoenix-based carrier didn't opt for a company-owned day-care facility because its employees are so spread out. They also needed child care for several days at a stretch to accommodate pilots' and crews' schedules.

The solution seemed to be private home-care providers who live in the employees' neighborhoods. So America West developed a staff of eight to train and monitor 53 caregivers working out of their homes, equipping many with toys and cribs. The company subsidizes up to 50% of the fees. Although its bankruptcy troubles have led to some economies--including a ban on new toys--the program itself is inviolate. Child care, says America West CEO Michael J. Conway, "is fundamental to the culture of our company." When it comes to dependent care, that attitude at the top is every bit as important as money.

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