Successful business leaders don’t tolerate broken components of their operations. When a department fails to deliver, when costs overrun revenue, when a system breaks down? The boss demands solutions.
Unfortunately, an essential component of Michigan’s economy — child care — has been broken for a long time. And it is in the best interest of business leaders to help fix it.
TalentFirst has compiled tools and solutions to support these efforts. We will share these resources, previously available only to members, during a free webinar open to all employers 9-10 a.m. on Dec. 5: Childcare Solutions for Today’s Workforce.
The motivation for opening access is simple: TalentFirst’s CEO Council has identified the childcare crisis as one of the biggest challenges to our state’s prosperity.
“Childcare solutions are investments that pay dividends for employers, families and communities,” said CEO Council member Sean P. Welsh, Regional President at PNC Financial. “We wanted all employers have this information because we understand the power of business to drive meaningful improvements.”
We all pay the price
The U.S. Chamber of Commerce has calculated care shortages cost Michigan $2.88 billion in economic activity each year. That’s because working parents and their employers depend on a childcare system that meets only 31% of the need in Michigan.
That inadequacy, combined with unaffordable costs, drives parents from the workforce, often into poverty. It contributes to talent shortages, turnover and absenteeism. And it poses long-term perils as too many children miss out on the proven benefits of quality early education.
The impact on working families is significant. For its study, the U.S. Chamber surveyed working parents and found:
- 63% missed work or class at least once in the past three months because of childcare challenges.
- 59% left the workforce, reduced hours or took a less-demanding job.
Employers also pay a steep cost. In a survey of employers in Barry, Ionia, Kent, Mecosta, and Montcalm counties, childhood advocacy group Vibrant Futures found:
- 98% of employers said childcare is important to employees.
- 61% said childcare gaps negatively impact business.
- 86% said lack of childcare affects recruitment and retention.
Complex problems
While the need is straightforward — parents who want to work must have reliable, accessible, affordable and high-quality child care — the problems are complex.
One challenge is that providers operate in a risky, highly regulated environment with high costs that suppress wages. As noted in TalentFirst’s 2023 report, “Balancing the Scales,” two-thirds of Michigan’s early care and education (ECE) workforce earns less than $15 per hour, despite a majority possessing education beyond high school.
The current median hourly wage of the highest-paid classroom role, Lead Teachers, ranks in the 12th percentile of all occupations in Michigan, the same ranking as Restaurant Cooks, Chauffeurs, and Wallpaper Installers — all of which require only a high school diploma.
When childcare workers can find better paying work elsewhere, one result has been a 26.8% reduction in the state’s early childhood education workforce from 2001-2022. At the same time, parents face an average annual cost of $11,308 per child for center-based care. That’s an unsustainable 11% of the median income for married parents, 37% for single parents.
Employer-led solutions
Fortunately, employers have the ability — and options — to mitigate these challenges. Several TalentFirst members are at the forefront of making child care more affordable for their workforces. A few examples:
- Gentex is opening an onsite preschool and daycare to serve first- and second-shift employees at its Zeeland campus.
- Cascade Engineering has been a pioneering participant in the MI Tri-Share program that splits costs between parents, employers and the state.
- Meijer recently announced child care benefits for all of its more than 70,000 team members.
These are ambitious solutions from leading employers. However, practical, budget-friendly solutions are also available for employers of all sizes, such as flexible work schedules and educating employees about financial assistance options.
TalentFirst will examine a full range of options during the Dec. 5 webinar. This is in addition to the resources of our online Employer Childcare Toolkit — also now publicly available.
Michigan’s childcare crisis is too costly to be tolerated. It’s time for business leaders to lead the way to solutions.
