Businesses need to help fix Iowa's child care crisis

Sep. 8—Among the reasons why Friendship Village, a senior living community in Waterloo, opened a child care center was to attract "the best of the best" employees and bring people back into the workforce.

"I wanted to have something that we could offer that would differentiate us from the rest, and that was child care," said Lisa Gates, president and CEO of Friendship Village.

The senior living community opened a child care center — It Takes a Village Childcare — in July 2019. The goal was to provide 24/7 child care, as well as the ability for young children and senior residents — referred to as "grandparents" by the kids — to spend time together.

But when the pandemic began in March 2020, it "changed everything," Gates said. There was a lack of staff, as well as navigating keeping the place open while keeping the children safe.

Visits with the "grandparents" took a very long pause, Gates said, but have since resumed "with joyfulness." The center is currently not open 24/7 due to staffing challenges but is working toward it.

Iowa was experiencing a child care crisis and workforce shortage before COVID-19, but the pandemic exacerbated these issues and further showed the importance of addressing these two challenges together, experts say.

"I think if the pandemic had any of a silver lining, it was that it helps show that this is the case, that this really is not just a family issue anymore," said Dawn Oliver Wiand, president and chief executive officer of the Iowa Women's Foundation.

Shortage before pandemic hit

There indeed was a child care crisis and workforce shortage in Iowa before the pandemic, but it went from "bad to worse really quickly" during the pandemic, said Jennifer Banta, Iowa City Area Business Partnership vice president.

"It's become an onion," Banta said. "It was a complicated issue to begin with and now it's an even more complicated issue."

Iowa was losing $935 million annually as a result of child care issues, according to a February 2020 report from the U.S. Chamber of Commerce Foundation in partnership with Iowa Association of Business and Industry.

The Iowa Women's Foundation estimates there is a shortfall of more than 350,000 child care slots, and another 78,013 slots could be lost due to the pandemic.

Women were disproportionately affected by the pandemic recession, according to a 2021 report by Iowa Workforce Development. Oliver Wiand said Iowa lost 54,000 women in the workforce.

Women nationwide lost nearly 11.9 million jobs between February 2020 and April 2020, according to the National Women's Law Center.

A March 2022 report from the organization found women were still short more than 1.4 million net jobs in February 2022 compared to February 2020, and accounted for nearly 70 percent of the net job loss.

Women are leaving the workforce four times faster than men, Oliver Wiand said.

A lot of that, Oliver Wiand said, is because of child care.

"It's going to take all of us coming together in different ways to address the child care issues, so more people can get back to work," Oliver Wiand said.

Getting businesses involved

The Iowa Women's Foundation has been helping businesses become more connected with addressing the child care crisis. Among its efforts, the group created a tool kit highlighting potential solutions businesses can implement and examples of businesses that have invested in child care for their employees.

Potential solutions include flexible work arrangements and flexible spending accounts, as well as subsidized, backup, on-site and off-site child care.

Once businesses invested in child care, Oliver Wiand said, "they've stuck with it because they see the benefit of it."

Frontier Co-op in Norway has offered affordable child care options since 1976. Vermeer in Pella is approaching the 10-year anniversary of its child care center, the Yellow Iron Academy.

"Businesses are starting to get it," Oliver Wiand said. "They start to recognize this is an issue for them, and it is impacting their employees and it's impacting their bottom lines. They want to do something but they're overwhelmed."

Banta, of the Iowa City Area Business Partnership, echoed how businesses feel as if they are stretched thin as they deal with workforce and supply chain issues, among other challenges.

"Employers are really interested in solving this issue because they've all lost great employees to the child care issue, but they're really struggling with how to get involved," Banta said.

New position focused on employer engagement

In an effort to help businesses further, Oliver Wiand said the Iowa Women's Foundation has entered into a contract with the Iowa Economic Development Authority to hire an employer engagement director.

Sheri Penney, the former economic development director in Mitchell County, was hired to fill the full-time role.

The employer engagement director will provide coaching and technical assistance to businesses around the state that want to make an investment in child care, Oliver Wiand said.

"We're trying to look at this in creative, different ways because not one way is going to make it work," she said.

Nicole Crain, executive vice president of the Iowa Association of Business and Industry, said the employer engagement position will be "really critical" and act as a "one-stop shop" to help businesses across the state get more information and learn what other companies are doing.

Something businesses need is connecting with other businesses that have had success implementing child care, she said.

Even if employers can't build a child care center, Crain said ABI has seen employers get more engaged in connecting their employees to resources in the community. Being flexible is also important for businesses to keep in mind, Crain said.

"Employers that are succeeding, that's what they're doing," Crain said. "They're changing up their shifts. They're doing whatever they can because there are child care solutions out there, but it's going to take a while to implement some of them."

Investing pandemic relief dollars

Experts say changes to public policy also are needed. Some employers are waiting for government action, said Banta, of the Iowa City Area Business Partnership.

Various recommendations are listed in a November 2021 report from Gov. Kim Reynolds' child care task force. They include support for businesses, child care providers, families and the child care workforce.

Reynolds also has directed a portion of the state's federal pandemic money to address the child care crisis. A $25 million grant program announced in May encourages Iowa employers to offer child care for their workers.

Reynolds has directed state agencies to implement many of the recommendations of the task force.

The governor has invested more than $500 million of state and federal funds on child care.

City and county governments also are investing pandemic relief funds into child care.

Johnson County, for example, is investing $750,000 to create a wage incentive program for child care providers. Plus, the county is spending $3 million to create an affordable child care program on county-owned property, as well as $400,000 to create an incentive program for state-funded child slots.

Addressing workforce shortage within child care

As businesses nationwide and in Iowa navigate the labor shortage, the child care industry is experiencing its own worker challenges.

Common reasons why those in the child care industry are leaving include low wages and lack of benefits, Oliver Wiand said. Part of the governor's task force included discussions about how to increase wages and benefits for providers, she added.

Among the suggestions outlined in the child care task force report would be an increased investment in established state programs that focus on boosting compensation, including TEACH and WAGE$.

Other suggestions: investing in workforce education compensation, such as tuition assistance for those interested in pursuing a career in early childhood education with a commitment to work in child care for a set number of years afterward; and registered apprenticeship programs in child care development that allow participants to earn money while they learn.

There is a recommendation to develop a shared services model that allows child care providers to access a statewide, online partnership platform for support on business operations.

Experts told The Gazette the child care industry has struggled to remain competitive, especially with other businesses upping their wages and offering benefits.

In Hamilton County, a public-private partnership formed to create a retention and hiring bonus program for child care staff at four centers.

The program was launched last year and is funded by donations from businesses and local government. McKinley Bailey, executive director of not-for-profit Building Families, said businesses have donated about $500,000 and local governments have chipped in $250,000 to be used over four years.

The need to address child care staffing in Hamilton County was evident when child care centers were half full due to lack of staffing, Bailey said. Businesses in town were hiring candidates who said they could start — as soon as they find child care — or having employees quit when they lost their child care, he added.

"In our part of the state and in most rural areas, the problem is not a lack of infrastructure," Bailey said. "It's the inability to staff the infrastructure that already exists."

While the retention and hiring bonus has been helpful, there still is a challenge to remain competitive with wage increases in other professions, Bailey said.

Bailey said the progress of the program will be tracked over the years, paying attention to how many empty child care slots are being filled and turnover rates.

"If we can keep people in the profession for longer, then we're addressing not just that we've filled these slots but also the kids are receiving a quality learning experience from an experienced child care provider," Bailey said.

Comments: (319) 339-3155; izabela.zaluska@thegazette.com

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