Bank of America shutters child care centers

There’s nothing like grim workflex news to ruin your morning cup of coffee.

That’s what happened the other morning when I read my local Wilmington, DE, newspaper, and spotted this headline:

“Bank of America cuts more costs by closing its child care centers.”

Amidst the layoffs and cost-cutting frenzy, shuttering of child care centers may seem minor, but probably not to the 2,700 employees who used those centers across the country.

Unfortunately, day care provided on site, or at a nearby location, isn’t something lots of companies do in the first place. According to Families and Work Institute’s 2012 National Study of Employers, only 7% offer child care onsite or at a nearby location, and that figure hasn’t changed much since 2005.

Bank of America’s move can be viewed by some as a symbolic hit to workflex benefits in the workplace at large, but the institution’s move is not surprising, maintained Kerstin Aumann, the Institute’s senior research associate.

“Childcare centers are expensive to maintain, and it’s hard justify the cost if they only serve a very small percentage of the workforce,” she explained.

In the case of Bank of America there appears to be a need for child care assistance. Reports about the bank’s decision say there was a waiting list of employees looking to use the service, and in place of its centers the company has said it will begin offering backup, emergency child care in January.

Clearly, Bank of America had its own business reasons for closing down the centers, but figuring out what workflex programs to cut and keep is something employers have to devote some time and thought to before making such decisions.

Ken Matos, senior director of employment research and practice for the Institute has offered some things employers should think about:

* When looking at the usage statistics for certain benefits, it’s important to really understand what the numbers mean. In the case of Bank of America, the reports indicated that only 1 percent or about 2,700 workers were using the centers and there was a waiting list.

“The 1% figure can’t be used to suggest that this is an underutilized program because the waiting lists imply that the centers are at capacity and there is additional demand for child care services,” Matos explained. “It would be like a restaurant in Times Square saying that because they can accommodate only 100 people a night there isn’t much demand for food in NYC.”

A better statistic for showing that centers at any company aren’t really needed, he continued, “would be the number of people using the center plus all those on the waiting list. Though that still would be an underrepresentation of the real demand since it would not include people who choose not to apply because they will have to make alternative arrangements or their child will age out of the program before they can be admitted. It’s also important to remember that life stage benefits like child and elder care will never serve all employees at the same time but could serve a majority of employees over their tenures. Even if only 1% of employees currently use a benefit it’s a good idea to check how many employees have benefited from the benefit in the past or intend to use the benefit when it relates to their lives in the future. The impact of a workflex benefit is often bigger than just the current usage numbers.”

* If an employer decides to close child care centers or eliminate any workflex options, is not necessarily a bad thing, he said.

“Flexibility needs to support both the employer and the employee and that includes reducing or restructuring flexibility options when they become unworkable or outdated. We don’t know the specifics of BofA’s calculations but we do know they have not ended their investment in child care, rather they have changed the nature of how they are investing.”

Matos pointed to a past blog he wrote on “flexibility for everyone” and said “it is possible that more employees will reap a greater benefit from emergency child care than full-time care. It depends on the employees and what they need to be effective in both their personal/family and professional lives. One essential element of being an effective and flexible employer is to communicate with employees and incorporate their needs into decisions about how to maintain mutually beneficial workflex programs.”

*Another essential element of supporting employees though a change in workflex options is to communicate the change in a way that gives employees the time and information necessary to make alternative arrangements to continue being effective in their multiple roles. It’s never a good idea to suddenly cut off an option though what constitutes sufficient time will vary across situations.”

Third, even when the number of employees using a flex option is small it’s important to ask who is using the option and the kind of impact that the flex option has on their work life fit.  As we show in our work with low-wage employees, flexibility has a greater reduction on home life interference with work for low wage employees than it does on higher wage employees, likely because higher-wage employees can spend some of those higher-wages to compensate for the lack of flexibility,” he said. “For lower wage employees, with less access to high cost options, affordable care (full-time or emergency) can be the pivot point between success and hardship.”

It’s all about employers looking at the real usage and demographics behind all workflex programs, and figuring out which benefits really work for a company and employees.

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One Response to Bank of America shutters child care centers

  1. the problem is not he closure…it was how it was done… POORLY!! Bank of America emplyees have no right to the Bank Daycare facilities, and the Bank has every right to close them, and should if it is in the shareholder’s best interest. My problem is with the way in which the doors are being slammed shut, with what seems to be a lack of common sense. The plan ignored obvious issues, and alternatives. I hope I am wrong, but I see only two conclusions, incompetence in HR issues, or an agenda driven attack on middle income families with children, and & Bright Horizons. Either of these should be clear reasons to increase the diversity of our HR department to be more family friendly. As I explained the situation to my next door neighbor with five kids, it only took him one minute to ask the obvious questions; “Why didn’t bank of America just eliminate the subsidy, and let the daycares stay open”….. “why did they not pre-negotiate with Bright Horizons a plan that would offer parents and teachers the option to keep the daycares open….that might save 100’s of jobs and limit reduction in employee productivity” Maybe our HR team needs a Business Man with 5 kids……simple, logical, business savvy….with maybe a little “spit-up” on his shirt! I am signing in as anonymous, because I fear retributions for bucking the bank’s “go-along to get-along culture”.

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