This boss promised to help his employees with childcare. It wasn't easy

Updated September 4, 2024 at 5:00 a.m. ET

MANITOWOC, Wisconsin – At the height of the pandemic, Sachin Shivaram became aware of the extent of his employees’ child care problems.

The CEO of the 115-year-old Wisconsin Aluminum Foundry has struggled with rising absenteeism as daycare centers closed and other worker agreements fell through.

Then one day, a pink car seat in the back seat of an employee's car caught Shivaram's attention in the parking lot. He learned that the employee was a single father who worked the evening shift from 2 p.m. to 10 p.m. His daughter was 4 years old at the time.

Since the daycare centers were closed during these hours, the employee Shivaram explained how he cobbled together the care: one day he took his daughter to his neighbor, the next day to his aunt.

“He didn’t say it as if he was sad about it,” Shivaram recalls.

But the CEO was deeply unsettled.

“We didn't do the right thing by her,” Shivaram says. “That's when we came to the conclusion that we had to do something.”

In the United States, there is a growing realization that childcare is a vital commodity and should be much more accessible and affordable for working parents.

This issue has caused a stir in this year's presidential election, especially among Democrats.

However, there has been no progress in achieving this goal.

Many child care facilities can barely keep their doors open while working parents struggle to afford care. A recent Care.com survey of parents with children ages 14 and younger who pay for professional care found that American families spend nearly a quarter of their household income on child care.

Trying to get other companies on board

In Wisconsin, Shivaram encountered one obstacle after another as he tried to get the problem under control.

Wisconsin Aluminum Foundry produces satellite dishes, parts for military and medical equipment, automotive components and even cookware, among other things, and employs around 900 people, almost half of them in Manitowoc on the shores of Lake Michigan.

To help parents with childcare needs, Shivaram first looked into building a new daycare center nearby. Working with a corporate childcare provider, they found a former adult rehab facility that could be converted.

Shivaram says the company spent $30,000 to $40,000 to create architectural drawings and develop the business plan, only to find that the venture was financially futile. With all the capital and labor costs, this child care center would have cost a whopping $45,000 per child per year. It was a failure.

“The average income in our community is about $52,000,” Shivaram says.

Not to mention that to have enough children for a new center, he would have had to bring other companies on board. No one seemed interested. Shivaram heard the same thing over and over from his fellow CEOs: childcare may be a problem for some, but not for my company.

Since the pandemic, more and more employers have been offering some kind of child care subsidy. The federal government has made this mandatory for semiconductor manufacturers that receive government CHIPS grants. The U.S. Chamber of Commerce supports the cause.

But in Manitowoc, Shivaram couldn't even get other companies to form a consortium to support existing child care facilities, so he had to go it alone.

A childcare grant of $400

He decided to give each employee $400 a month to cover childcare costs. He originally planned to use the money for licensed childcare facilities, but then realized that many of his employees couldn't find places. So for now, he's reimbursing all childcare costs, even paying for the grandmother.

For employees like Greg Place, a design engineer, it has made a difference.

When his daughter was born two and a half years ago, he and his wife, a teacher, wondered whether one of them would have to give up their jobs given the high cost of childcare.

“It’s a little overwhelming to be faced with this challenge for the first time,” he says.

Adding to the family's financial woes was the fact that their daughter was born with a cleft lip and palate. Place says much of his salary went to medical bills. He initially benefited from a government program that worked with employers to subsidize child care, but that program has since ended. Despite the $400 stipend from work, his family still has about $500 to pay out of pocket each month.

“You just adapt,” Place says, adding that the enrichment and relationships his daughter gets at the local YMCA's daycare are well worth the cost. “She's very adventurous. I can't slow her down one bit.”

Keeping employees on task

About 100 foundry employees currently use the child care subsidy, including Emily Kasbaum, HR business partner and mother of three young children. She says the extra money has reduced her family's child care costs enough for her to keep her job.

“Mathematically, it probably makes sense for me to continue working and I can still contribute a significant amount, even after childcare costs,” she says.

Kasbaum is happy to inform new employees about the benefits.

“They are shocked when they hear that a company actually does something like this for its employees,” she says.

While Shivaram is proud of what his company has done for individual workers, he takes issue with the fact that it hasn't had an impact on a broader scale. He wishes the foundry would help in some way to raise wages for child care workers in his community or improve the quality of care.

Copyright: NPR