Employers Innovate to Tackle Iowa's Child Care Challenges

The topic of child care is unquestionably complex. For one, the cost of day care can be prohibitive. Finding a reputable day care that provides cleanliness, security and educational programming can feel impossible. Vacancies and scheduling at child care providers can be issues as well.

When parents need to stay home to take care of their children, whether it’s for an hour, a day or several days, it results in absenteeism and lost productivity for the employer and possibly less pay for the employee. For many, child care issues force parents to care for children at home permanently. This takes skilled employees out of the labor force, making child care a critical component of Iowa’s business sector. During the past year, the COVID-19 pandemic has only heightened those challenges.

To reduce the impact of these issues, employers are increasingly creating new solutions to keep employees working and engaged. For some, that means providing schedule flexibility, for others it means running child care centers at the work site.

STATE OF CHILD CARE IN IOWA

A family in Iowa earning $67,679, the state’s median income, would spend 16% of their income if they had a child in a licensed child care center, according to data by the State Library of Iowa and National Data System for Child Care statistics.

Last year, the U.S. Chamber of Commerce Foundation published “Untapped Potential: Economic Impact of Childcare Breakdowns on U.S. States.” The chamber partnered with the Iowa Association of Business and Industry (ABI) on “Untapped Potential: How Childcare Impacts Iowa’s State Economy,” which showed that Iowa loses $935 million annually from breakdowns in child care.

Other key findings include:

• Iowa loses $153 million annually in tax revenue due to child care issues.

• Absences and employee turnover cost Iowa employers $781 million per year.

• 69% of parents rely on family members for at least some child care.

• More than half of parents reported missing work due to child care issues.

• 52% of parents who voluntarily left a job did so because of child care issues.

• 23% of parents postponed school or a training program due to child care issues.

Data came from phone surveys that reached out statewide to households with children age 5 and younger who were not in kindergarten. There were 331 parents surveyed from Sept. 20 to Oct. 25, 2019.

These child care issues exacerbate Iowa’s chronic need for more workers. Iowa’s unemployment rate was 3.6% in November 2020, according to Iowa Workforce Development. But in recent years, before the global pandemic was a thing, the state’s unemployment rate sat in the range of 2.5% to 3.4%, one of the lowest rates in the country.

The report recommends the business community work with early education advocates to provide consistent child care to Iowa’s working families. Employers should survey employees for child care needs and work with the community to determine opportunities to invest in child care solutions. The report also suggests state leaders take child care solutions that are working and replicate them in other parts of the state.

CASEY’S CHILD DEVELOPMENT CENTER

Casey’s General Stores provides an on-site Child Development Center (CDC) at its corporate headquarters in Ankeny.

Developmental programs for newborns through kindergarten are provided. School-age children up to 12 years old also can attend during school breaks and during the summer months. As children are enrolled at Casey’s CDC, they are placed in an age-based developmental group.

“We are proud to share that the tenure of our teachers is well above industry standards, with half of our teachers working in their role for 10 years or more,” said Chris Moulden, director of Casey’s CDC, which has been operational for 30 years.

The Ankeny headquarters employs about 860 people and the child care center supports around 80 children each day from 6:45 a.m. to 5:30 p.m., Monday through Friday. Casey’s partially subsidizes the CDC by having it available on-site at the Store Support Center and providing easy access to food from the company’s cafeteria.

Casey’s CDC was the brainchild of company founder Don Lamberti, who wanted to support families of employees.

“We started as a family-oriented business and strive to support our Casey’s families in impactful ways,” Moulden said. “The Child Development Center is one way that we can be here for our team members so they can perform their jobs while still having their children near in a safe and developmental setting. Employer-supported child care centers or programs typically result in more engaged employees who are more likely to stay and grow within the organization.”

UPDATED AND EXPANDED CHILD CARE SERVICES

During the past few years, the center has been updated and expanded to accommodate up to 100 children ages 6 weeks to 11 years old.

“We are excited about 2021 because we are scheduled to update and expand our playground with new surfacing and play space elements, including Casey’s-themed activities,” Moulden said. “Some highlights include custom-designed doughnut climbers, Casey’s storefront and drive-up pizza window, pizza climber, track for running and riding trikes with a fuel station and large play structure to engage children in developmental play, and many more fun, enriching large motor activities.”

Fortunately, Moulden said, the center was able to remain operational during 2020, when the pandemic closed many day care options for Iowans.

“I think many people have witnessed the critical nature of child care during the past year,” Moulden said. “As centers had to adjust, or in extreme cases, temporarily close, parents and families were sent in a whirlwind to find other support or struggle through working at home while providing education and engagement for their children. Fortunately, we were able to remain open, even in a limited capacity to support our distribution center staff. This was no small feat and was initially difficult to sustain.”

Casey’s invests in the Iowa Women’s Foundation, which recently awarded $40,000 in grants to fund projects that increase the availability of affordable child care. Programs include certification, training and licensing for child care entrepreneurs, expansion of facilities, new facilities and before- and after-school programs.

“We encourage other Iowa companies to support projects like these or consider partnering with an organization like the Iowa Women’s Foundation or United Way of Central Iowa,” Moulden said.

VERMEER’S YELLOW IRON ACADEMY

In Pella, Vermeer Corp. provides child care to its roughly 2,400 employees on-site at its Yellow Iron Academy, so named for the STEM skills it teaches.

“Vermeer delivers a real impact through the manufacture of high-quality agricultural, underground construction, surface mining, tree care and environmental equipment,” said Kate Guess, vice president for human resources at Vermeer. “Our tough equipment is painted yellow and is often referred to as ‘yellow iron’ by team members, dealers, customers and community members alike. It takes skill in all areas of STEM to build yellow iron, and STEM learning is instilled into many of the activities for children at Yellow Iron Academy. Thus the name.”

Located in a 25,000-square-foot barn, Vermeer’s child care center opened in 2018 to employees and the larger community. The center includes classrooms, an art studio, a science lab and other amenities.

“There is a high demand for child care in the state of Iowa, and Pella is no exception to that need,” Guess said. “Vermeer Corp. has an on-site child care facility that is one of the largest providers of child care in the area. Prior to the implementation of Yellow Iron Academy, our organization researched the need for child care in the area and how best to fill that need.”

Child care is a top concern for Vermeer, she added.

“Alongside other local employers, Vermeer is a strong advocate for child care in Iowa,” Guess said. “As a family-owned and -operated company, we know family comes first. Our No. 1 priority is to care for our people in their whole lives. A large piece of that is providing them with affordable and high-quality child care while they're hard at work designing, building and supporting yellow iron.”

While the child care center benefits Vermeer and its employees in many ways, the company uses it as a tool to recruit additional workers to the area.

“Due to the large need for child care in the area, it's important we provide our team members with an option to support their families,” Guess said. “Providing this resource to our team members makes us a competitive employer in the area.”

The Yellow Iron Academy was able to remain operational throughout 2020, despite the pandemic.

“We were fortunate in that Yellow Iron Academy remained open during the pandemic and many area schools provided some level of in-person instruction,” Guess said. “Overall, few of our team members had their child care needs affected by the pandemic. However, the pandemic did continue to stretch a system that was already struggling to keep up with demand.”

AT&T CONTRIBUTIONS TO CHILD CARE

Investing in child care in Iowa communities is a no-brainer to companies like AT&T.

“AT&T Iowa knows that safe, affordable, quality child care is the foundation for attracting, retaining and promoting a skilled workforce in Iowa,” said Dustin Blythe, AT&T director of external affairs for Iowa and Nebraska. “Not only that, quality child care lays the groundwork for future generations and establishes building blocks for a successful childhood into adulthood. From a business perspective, it’s a no-brainer. There’s no better investment than an investment in our children.”

AT&T regularly contributes to child care services in the communities where its call centers are located, such as Red Oak and Villisca.

“Through the advocacy of our employees, we have supported child care in communities where our employees are concentrated, including a total of $22,250 investment in Red Oak over the past two years,” Blythe said. “$10,000 of this funding was matched by the community, doubling the impact of the contribution. We also contributed $10,000 to the child care center in Villisca for a total of $32,250 in southern Iowa over the past two years.”

Employers are critical to finding solutions to child care issues in Iowa, where 23% of the state is considered a child care desert, Blythe said.

“Business is a key stakeholder in advocating for improvements in child care,” Blythe said. “Together with families, policymakers and communities, it is critical for the child care system to be strong, accessible and well-funded in order for companies such as AT&T to attract, develop and retain employees.”

The child care center AT&T helped fund in Red Oak opened during the pandemic.

“It comes at a critical time for us as we opened our doors in the midst of the COVID pandemic and have continued to provide the high-quality level of child care services so many of our residents in the community need during this challenging time,” said Kelly Osheim, chair of the Montgomery County Child Development Association.

The child care providers he’s spoken to have outlined many challenges, especially during the pandemic, Blythe said.

“Enrollment has declined or been inconsistent as employers have been forced to close or change their service delivery model,” Blythe said. “Parents want to ensure access to care but can struggle to pay for full-time utilization. Providers have concerns with physical health and safety, as well as lack of health care benefits. As providers struggle with financial solvency, these issues will continue to echo through the next stages of recovery. State and federal governments have provided emergency funding and communities are coming together to try to address the lasting impact. AT&T is proud to play a part in the public/private partnership that will be necessary to ensure sustainability.”

NEXT STEPS

The U.S. Chamber of Commerce Foundation’s partnership with ABI to create “Untapped Potential: How Childcare Impacts Iowa’s State Economy” was important to show employers who are new to understanding the importance of child care for their workforce, said Julia Barfield, senior manager for policy and programs with the U.S. Chamber of Commerce Foundation Center for Education and Workforce.

Businesses and state leaders need to be talking to employees who are working parents to better determine their needs, she said.

“This can be through formal surveys, focus groups, employee resource groups or another mechanism,” Barfield said. “But employers must understand what their working parents need in terms of child care and what they want from their employer. Many employers think their only option is to provide on-site child care, which isn’t feasible or realistic for every employer. Whereas in reality, parents may not want on-site care and instead may want their employer to institute more flexible scheduling or reserve slots in nearby programs.”

Coming out of the pandemic, employers need to provide solutions to working parents, especially women, to allow them to return to the workforce.

“At the time of publication Iowa had the highest female labor force participation rate (nationally),” Barfield said. “Since March (2020), we’ve seen many workers furloughed or laid off and we’ve seen many working parents, disproportionately women and women of color, leave the workforce due to child care needs. Knowing Iowa’s female labor force participation rate, I think it’s vital that any economic recovery include child care to ensure that working parents, specifically female caregivers, are able to return to the workforce.”

Since the report was first published early in 2020, the foundation has spoken with working parents across the country to determine their needs during the pandemic.

“We heard from parents that they still don’t have stable child care nearly a year into the pandemic,” Barfield said. “As a result, parents are making permanent career decisions based on temporary child care solutions. Those decisions, such as going from full time to part time, changing employers, or leaving the workforce entirely, have financial implications for families, our businesses and our economy. Our recovery is directly tied to our child care system, and it will continue to play a significant role in the post-pandemic world.”

Most child care providers are small businesses that don’t receive much support. Providing grants and other support systems to those providers is one way to ease their burden.

“Most often child care owners are functioning in multiple roles during the day — subbing in for teachers, cleaning, preparing food, among many other roles — so they can’t often step away to apply for financial assistance or can’t take an hour to go speak with their bank,” Barfield said.

Businesses and state leaders need to also be aware that child care providers are in short supply.

“The broader business community should and can be a strong advocate for these businesses to get access to any relief programs and for those supports to be designed to accommodate the unique needs of child care,” Barfield said. “Furthermore, history has shown a decrease in the supply of child care providers nationwide, even when the economy was strong and unemployment low. So when one child care program goes out of business, we know that another one won’t just take its place. We need to value each and every child care program, both home- and center-based, so that we don’t lose our already-limited supply.”

While the task might seem daunting, employers don’t need to feel alone when trying to solve the child care issue for their employees.

“There is deep expertise and there are high-quality programs in your community that you can partner with, so there is no better time than now to get involved and be part of the solution,” Barfield said.

Barfield said seeking out solutions to the child care challenges in Iowa will not only aid parents and employers but will improve the state’s economy and could help regain the $934.6 million lost annually to breakdowns in child care.