Approved by August 15th, 2012

¶ … approved by August 15th, 2012

IRB Application and Review -- completed and approved by August 15th, 201

completed and approved by November 30, 2012

On-site Childcare: An in-depth look at the effects on employee performances

Concept Paper

Requirements for the Degree of Jeff Keith

Prescott Valley, Arizona

Issues with Childcare and the Workplace

Employer Benefits of Providing on-site Child Care

Benefits to Employees

Annotated Bibliography

Slightly over 60% of women with a child or children under the age of 5 work outside the home and rely on some form of child care (Child Care Options for Working Parents, 2012). In the majority of the existing literature connecting parental employment and child care, the main concern is the affordability of care and the suppleness of reaction to child care costs (Vandell & Wolfe, 2000). In this sense one can see the prospective for an exchange of quality of care and labor force partaking, in that higher-quality care is probable to be more expensive. A parent facing that higher price may decide to give up or limit employment or to choose lower-quality and less expensive care (Scarr, 1998).

Quality of care may influence employment in a number of ways. Parents may be unwilling to leave their children in a low-quality, dangerous environment or with adults who do not supply a motivating or warm environment. This may be a particular dilemma for lower-income families, who have more inadequate choices of providers. On the contrary, a secure, warm, motivating environment may persuade employment and longer hours of work. Parents may also be more effectual workers if they do not have anxieties about the surroundings in which their children spend a good part of each working day. Having well taken care of children may also lead to workers with higher productivity than those whose children are left in less suitable situations. "Parents may also be more likely to be on time to work and less likely to miss time from work if their children are cared for in a safe, warm, and stimulating environment" (Vandell & Wolfe, 2000).

Statement of Problem

The problem to be addressed in this study has to do with the effects that child care have on parental productivity in the workplace. Finding quality and dependable child care is a constant concern for working parents across the country (Henry, Werschkul, & Rao, 2003). Low-income working families, in particular, find affordable, reliable, high-quality child care extremely difficult to acquire; and for many low-income working women, that difficulty becomes a near impossibility (Schulman 2000). Some research has found that quality child care for employees is important to because it improves productivity, reduces absenteeism, cuts turnover and can increase company value (Shellenback, 2004).

Child care breakdowns leading to employee absences cost businesses $3 billion annually in the United States. Fifty-four percent of employers report that child care services had a positive impact on employee absenteeism, reducing missed workdays by as much as 20% to 30% (Friedman, 1986). Furthermore, a child care program can reduce turnover by 37% to 60% (Ransom & Burud, 1988). Employee retention is a key driver of customer retention, which in turn is a key driver of company growth and profits. One study showed that a 7% decrease in employee turnover led to increases of more than $27,000 in sales per employee and almost $4,000 in profits per employee (Huselid and Becker, 1995). Companies with childcare programs or who are considering them need to be able to measure the value of these programs as a return on their investment (Shellenbeck, 2004). In this study, employee sponsored child care will be looked at in order to see if having this benefit increases worker productivity while providing a benefit to the employer.

Purpose of the Study

The purpose of this qualitative study will be to explore what specific factors and conditions influence employees' productivity when it comes to child care. Through a phenomenological design, the present study will attempt to elucidate how the presence of employee sponsored child care interacts to influence employees' productivity, absenteeism, and turnover. Interviews, both formal and informal, will be conducted with 25 participants from various levels within two different firms, one that offers employee sponsored child care and one that presently does not, in order to gain an understanding of feelings associated with child care in general and specifically with employee sponsored child care. Observations will also be used for purposes of comparison -- and, in some cases, contrast -- to results found during interviews.

Research Questions

To determine the connections between employees sponsored child care and an employee's productivity, absenteeism, and turnover rate, the following questions will be addressed:

Q1. To what extent, if any, does employer sponsored child care influence employee's productivity, absenteeism, job satisfaction and turnover rate?

Q2. What true benefits are there to be realized by an employer for offering onsite child care to their employees?

Q3. What true benefits are there to be realized by an employee if onsite child care is offered?

Q4. What would the ideal onsite child care structure look like in order to incorporate as many benefits as possible?

Definition of Key Terms

Absenteeism -- the term commonly used to refer to impromptu worker absences from the workplace. A lot of causes of absenteeism are justifiable, like personal illness or family issues, for instance, but absenteeism also can frequently be traced to other issues such as a poor work atmosphere or workers who are not dedicated to their jobs (Absenteeism, 2012).

Employer Sponsored Child Care - Refers to a circumstance in which an employer, a group of employers, or a labor union takes some plan in meeting employees' child care needs and bears some or all of the expense (Employer Sponsored Child Care, 2012).

On site Child Care -- Child care provided on the physical workplace site (Child Care Law & Legal Definition, 2012).

Brief Review of the Literature

Introduction

The workforce has changed dramatically over the past 20 years. Today, the majority of skilled employees in the workforce represent parents with child care needs. In fact, in most two-parent families, both parents work to support their family. Furthermore, more than 10 million employees are single parents and 2.1 million of these employees are single fathers. Women are partaking in the workforce in record numbers. Here are some interesting facts:

Over 75% of women who are employed have school-age children.

Sixty-five percent of mothers in the workforce have children under the age of six.

According to forecasts, women will outnumber working men in the workforce within the next decade (Business and Community, 2011).

Furthermore, not only are more parents working, but they are also spending more time at work. Furthermore, today's jobs not only use more time, they also devour more physical and emotional energy. As a consequence, a lot of families are stressed to balance work and family while providing their children with quality care. This is contributing to stress and work-family conflict. Research indicates that quality child care is vital to parents and, as the following research indicates, for employers as well:

In the United States, employee absenteeism, as the result of child care breakdowns, costs businesses $3 billion every year.

29% of employed parents had some type of child care breakdown which resulted in absenteeism, tardiness and reduced attentiveness at work.

The average American working parent is absent nine days per year. As children go from day care into elementary school, the number of days missed goes up to thirteen. These absences are expensive for employers, as is turnover, estimated at one and a half times the annual salary for an exempt employee and 75% of annual wages for hourly workers (Phillips & Resiman, 1992).

Issues with Childcare and the Workplace

"Child care breakdowns leading to employee absences cost businesses $3 billion annually in the United States. Fifty-four percent of employers report that child care services had a positive impact on employee absenteeism, reducing missed workdays by as much as 20% to 30%" (Friedman, 1986). "Furthermore, a child care program can reduce turnover by 37% to 60%" (Ransom & Burud, 1988). "Employee retention is a key driver of customer retention, which in turn is a key driver of company growth and profits. One study showed that a 7% decrease in employee turnover led to increases of more than $27,000 in sales per employee and almost $4,000 in profits per employee" (Huselid and Becker, 1995). Companies with childcare programs or who are considering them need to be able to measure the value of these programs as a return on their investment.

Alterations in family structure and in the quantity of mothers working full-or part-time have changed employment models, the make up of the workforce, and the roles that mothers and fathers execute in families. The new round the clock economy, the combination of traditional gender roles, and the feminization of the workforce have been observed by employers. In fact, a rising number of employers know that family and work demands frequently conflict and that this disagreement can affect the morale, output, and preservation of workers. The anxiety that difficulties in juggling family and work tasks can negatively affect worker presentation has led some employers to offer on-site child-care or add family leave to benefit packages. If such initiatives, employers have assumed, reduce friction between family responsibilities and work demands, then worker productivity should increase and unexcused absenteeism and unnecessary turnover should decrease (Brandon & Temple, 2007).

Employer Benefits of Providing on-site Child Care

Keeping up a population of skilled, industrious workers is a recurrent challenge for employers. For working parents, their challenge is frequently related to obtaining convenient, quality child care solutions. Today, a lot of employers are addressing this work-life challenge and have started offering child care benefits that sustain the work/life balance of workers. and, in spite of budget crunches and space limitations that many companies face today, there are many options to meet the needs and budgets of employers both large and small (Durekas, 2009).

Despite of size, employers have found that these benefits can construct a win-win solution ensuing in loyal, satisfied workers that improve an organization's overall output and standing in the market, as well as provide long-range benefits to the overall community. "By supporting retention of employees, reduced absenteeism, and increased productivity, these programs also generate a substantial return on investment -- a key factor when employers look at which benefits they should be offering in today's economy" (Durekas, 2009).

The consequences of child care problems for employees and their productivity at work serve as a primary motivation for employers to provide child care assistance to their employees (Morrissey & Warner, 2009). In 1989, the Families and Work Institute published the Productivity Effects of Workplace Child Care Centers, one of the first studies to delineate the effects of child care on parent productivity (Families and Work Institute, 1989). Since then, firms have experimented with various initiatives to promote employee productivity, recruitment, and retention through child care assistance including on-site child care centers, employer-supported resource and referral networks, back-up or sick care provision, flextime, or portable child care subsidies or vouchers (Friedman, 2001).

Flexibility is often said to be the key to an engaged workforce, so it is perhaps not surprising that the more flexible childcare benefits are dominating the corporate market. Of the four main types of employer supported childcare, the childcare voucher and emergency childcare sectors have experienced the strongest growth in employer take-up over recent months, followed by workplace nursery partnerships, which have also attracted more interest this year. By comparison, demand for onsite workplace nurseries has remained fairly static (Coleman, 2008).

There are many employers interested in providing on-site childcare facilities for their staff, but unfortunately, for most of them this isn't a feasible option. You need to have the right location, the space, and enough working parents to make it. Where on-site facilities are not an option, some employers are engaging in workplace nursery partnerships through which they can reserve places with government approved nurseries in locations around the country. As long as employers support the nursery financially or with management services, employees can receive a full tax break on the cost of using the facility, providing them with savings and choice, as they can place their children in a nursery closer to their home (Coleman, 2008).

The flexibility and convenience of emergency childcare that can be provided at short notice is also appealing to growing numbers of employers and staff. The demand for emergency childcare has been driven by demand from staff for more flexible working patterns. Employers that want to retain and engage their employees have responded by extending their childcare benefits provision to include the flexibility that emergency childcare provides (Coleman, 2008).

Offering workers access to quality child care programs consequences in frequent and wide reaching benefits. It is believed that these programs are good for employers in that they help them to attain goals in attraction and retention of key workers, escalating productivity and producing a positive organizational picture.

Likewise, these programs help working parents spend less time worrying about the affordability or accessibility of child care and more time focusing on their careers.

"Employer-sponsored child care can benefit employees, and thereby benefit employers, by making employees:

Feel they are more productive at work

Feel their company is supportive of them and their work/life balance

Be less likely to leave their job to pursue other opportunities

More likely to return to work after the birth of a child because of the benefit

Consider the benefit as a factor in a decision to join the organization

Feel more involved in their child's day due to the proximity of the center to their workplace" (Durekas, 2009).

Organizations are saving millions of dollars sponsoring childcare centers. One of the main findings of the study was that voluntary turnover of center users was nearly one-half that of the voluntary turnover among the total workforces of participating organizations. Employer-sponsored child care programs generate a powerful return on investment. By driving down turnover, reducing absenteeism, and increasing productivity on the job, child care and work/life programs are not only an investment in employees, but an investment in the success of your company. In fact, after the first year of employment, most employee turnover occurs among the parents of young children. By providing programs that allow those parents to work - and perform to their full capacity - leading employers reduce the recurring costs of recruiting and retaining skilled employees (Corporate Childcare, 2009).

By helping working parents in sourcing child care benefits, employers provide a benefit that not only adds to workers' output through lessening of stress, but offers an answer that helps produce content, faithful workers. Benefits can be planned to meet the needs of a particular group of workers who have trouble accessing care because of their work schedules, such as those in health care or academia, or assist with their expense. "Employers with a nationwide, distributed workforce look for programs that offer equitable benefits to employees across the country" (the Benefits of Employer-Sponsored Child Care Benefits, 2009).

Child care clearly benefits working parents. On the other hand, evidence is mounting that it also has benefits that reach beyond working parents, and impact the company and all of its workers. "Benefits to an employer's whole worker population were studied by Bowdoin College professors Rachel Connelly and Deborah DeGraff in collaboration with a University of North Carolina professor Rachel Willis. Their study established that companies offering on-site child care saved between one-half and twice the cost of what they paid to maintain the benefit -- including subsidies to employees and other costs -- and this amount is on top of any savings realized through reduced turnover or increased productivity" (the Benefits of Employer-Sponsored Child Care Benefits, 2009).

Other figures over the years have been shown to sustain the universal claim that child care programs for workers pay off for the sponsoring company in dropping turnover, reducing absenteeism, and improving morale:

According to the National Child Care Information Center, organizations that offer child care often top the lists of "Best Places to Work." This benefit demonstrates a commitment to employees and leadership in the community, resulting in enhanced morale and company image, as well as an ability to attract new talent. In one survey, 85% of employers that offered child care programs reported more positive public relations.

In 2006, unscheduled absenteeism climbed to its highest level since 1999, costing some large employers an estimated $850,000 per year in direct payroll costs, and even more when lost productivity, morale, and temporary labor costs were considered. "Family issues" account for 22% of these unscheduled absences, according to the 2006 and 2007 Unscheduled Absenteeism Surveys by CCH Incorporated.

Research has also shown a child care center could save a business as much as $500,000 annually in turnover costs -- 10 retained workers at $50,000 per worker (the Benefits of Employer-Sponsored Child Care Benefits, 2009, p. 1).

Employers offering direct child care benefits report positive impacts of child care programs on their workers' performance, as well as reductions in turnover, absenteeism, and recruitment costs. In addition, a large percentage of the potential benefits to employers consist of savings in wage costs that reflect the value of the Employer Sponsored Child Care (ESCC) to employees. This is not often mentioned in firms' public rhetoric, but we expect that it is a substantial part of the benefit to firms. Measuring the benefits of ESCC programs for employers is challenging given the complex interaction among working conditions, productivity, compensation, and the makeup of one's labor force. As a result, even companies with ESCC programs have found it difficult to quantify the value of the child care benefit they are offering. Many other firms may be contemplating offering an ESCC but do not follow through because of the same difficulty in calculating the benefit vs. The cost. Thus an estimate of the value of the benefits of an ESCC, either actual or potential, would be useful for firm decision making (Connelly, DeGraff & Willis, 2004).

Benefits to Employees

In a study done by Bright Horizons Family Solutions in 2010 it was found that workers with employer-sponsored dependent benefits -- such as worksite child care, elder care and back-up care -- report less stress and better health than those without such options. The survey consisted of 4,000 working adults: one group with access to employer-sponsored dependent care benefits and a second group without them. Among the survey's findings, workers with employer-sponsored dependent care benefits:

Were 31% less likely to report lost productivity due to stress.

Reported 25% fewer personal health concerns due to stress.

In contrast, workers without such benefits were nearly a third more likely to report being down or depressed and spend 20% more time dealing with childcare issues at work, among other findings (Employer-sponsored child care benefits = better health, 2010).

By assisting working parents in sourcing child care benefits, employers provide a benefit that not only increases workers' productivity through reduction of stress, but offers a solution that helps create happy, loyal employees. Benefits can be designed to meet the needs of a particular group of employees who have trouble accessing care because of their work schedules, such as those in health care or academia, or assist with their cost (Durekas, 2009).

When utilizing onsite care facility, parents have their children physically close and are readily accessible should emergencies arise. For those parents with older children, a reduction has also been seen in the 3 o'clock syndrome, a heightened anxiety level generated by the fact that many of the employees' children are unsupervised after school is dismissed. Providing care for school-age children has resulted in less worry on the parent's part and allowed for more concentration and productivity. Consequently, two of the three components of corporate America's commitment to child care, employers, and their employees appear to be benefitting from this arrangement. Yet, for the children being cared for by corporate America, no list of benefits has yet to be empirically formulated. In fact, the actual children involved are mentioned only indirectly, if at all, by these businesses (Oekerman, 1997).

Research Method

The purpose of this, phenomenological, qualitative study will be to explore what specific factors and conditions influence employees' productivity when it comes to child care. The literature has shown that alteration in the behavior of people in an organization highly affects their ability to change. Through an investigation of the experiences and feelings of individuals, it is possible to attain a better understanding of the phenomenon as people understand it (Moustaskas, 1994).

A phenomenological qualitative study is the preferred method of analysis for this study simply because the qualitative method of data analysis met the need for discerning and discovering feelings and experiences to successfully interpret meaningful patterns in this study. The purpose is to describe and interpret the experiences of participants in order to understand the essence of the experience as perceived by the participants. Furthermore, phenomenology attempts to capture the essence of a phenomenon. The essence of a phenomenon is often defined as the makeup of the experience being studied (Dahlberg, 2006). "The object of research in phenomenology is a person's lived experience of a phenomenon" (Larsson & Holmstrom, 2007, p. 59). This type of research was the most appropriate means of gaining an understanding of people's perceived understanding and actions based on the phenomenon.

The objective of conducting research in phenomenology is to comprehend an individual's lived experience of a phenomenon (Larsson & Holmstrom, 2007).

Experiences are determined by the particular goals and objectives of this study, and the same data will be analyzed and synthesized for the different research questions being addressed (Westat & Frechtling, 1997). Further understanding will be gained by examining the data from multiple angles, such as by comparing comments made by those in companies of different sizes and by those representing different levels of the company.

The research design being used to study this phenomenon was chosen to show how certain factors cause employees to miss work and be less productive when they are at work. An attempt will be made in this study to gain an explanation of the phenomenon that exists in relation to employees' productivity and on site child care. The literature already establishes that child care issues affect employees' absenteeism as well as their overall performance.

Measurement

Data collected for this study will be done using an interpretative phenomenological analysis. Qualitative data will be gathered from research participants using two different techniques. These techniques are structured and unstructured interviews and observations. Data from structured interviews will be captured using recordings, which later will be transcribed verbatim to provide accuracy during analysis. Unstructured interviews will involve the use of notes to create a relaxed atmosphere in addition to allowing observation of the manner in which participants provided their responses.

Data Collection. This qualitative study will incorporate two data collection methods that will be the most effective methods to study the phenomena. The first data collection method is that of in-depth, semi-structured interviews. The second method to be used is that of an observation approach for data gathering. The information will be examined in an attempt to explain how employer sponsored onsite child care affects employee's productivity, absenteeism and turnover rates.

Interviews. In depth, semi-structured interviews will be used in order to gain valuable and detailed information that will be used in the investigation. Interviews have the ability to provide a great consistency when comparing attitudes about a subject (Mack, Woodsong, MacQueen, Guest, & Namey, 2005). in-depth, qualitative interviews are outstanding tools to use in planning and assessing programs because they use open-ended, discovery-oriented methods, which permits the interviewer to intensely investigate the respondent's outlooks and viewpoints on a subject. This brings about prosperous background information that can outline further questions pertinent to the topic. The key characteristics of in-depth interviews are the following:

Open-ended Questions. Questions need to be worded so that respondents expound on the topic, not just answer "yes" or "no." Many open-ended questions begin with "why" or "how," which gives respondents freedom to answer the questions using their own words.

Semi-structured Format. Although it is important to pre-plan the key questions, the interview should also be conversational, with questions flowing from previous responses when possible. For example, if an interviewee remarks that "The elections are approaching," an appropriate response would be, "How do you feel about the candidates involved?"

Seek Understanding and Interpretation. It is important to use active listening skills to reflect upon what the speaker is saying. The interviewer should try to interpret what is being said and should seek clarity and understanding throughout the interview.