Kalsec’s Innovative Approach to Recruitment and Retention Through Child Care

• The number of women and men in the workforce is not equal, mostly due to the disproportionate sacrifices women make for child care.  
• Child care programs can serve as an affordable recruitment and retention tool. 
• Child care should be a part of the conversation about what makes a good business climate.

Kalamazoo ingredients company Kalsec believes that employers can play a more active role in eliminating child care challenges to be more competitive and improve employee experience for current and potential workers. During the 2023 Mackinac Policy Conference, Kalsec showed its innovative approach to overcoming this challenge for employers and employees alike through a panel discussion moderated by JPMorgan Chase & Co.’s Terrah Opferman with: 

• Timothy Bartik, Senior Economist, W.E. Upjohn Institute for Employment Research 
• Scott Nykaza, Former Chief Executive Officer, Kalsec  
• Martha Todd, Owner and Board Chairman, Kalsec 

The Farmhouse, Kalsec’s Innovative Approach to Recruitment and Retention 

In 2017, Kalsec opened its on-site early childhood learning center to serve employees and their children aged six weeks to five years old. Todd shared this program was started for two reasons, the first being her personal experience as a single mother who also attended graduate school.  

The second reason was the startling effect of the pandemic on women’s careers. According to Todd, pre-pandemic, 30% of women who had children never returned to the workforce, and those who did never had the same career trajectory. 

“It’s no surprise that you don’t see equal numbers of women and men in management, leadership, and boardrooms, and it’s not because of lack of talent or ambition or credentials,” said Todd. “It’s just that we tend to take the burden of those sacrifices heavier, so for me, it was about removing that burden for women in our company and removing that barrier of reentry for women.” 

Implementing this child care program did not happen overnight and without challenges, however. Nykaza shared the process took longer and cost more than planned. They also had to consider a lot more, ranging from finding talent with new skillsets to needing oversight from an oversight group.  

In addition, Nykaza shared that compensation for these new roles was a big element to consider, as Kalsec’s overall vision is to take care of their employees. Ultimately, after doing the math, they landed on a starting rate of $15, which now goes up to $40 per hour for some – and each position receives full benefits. 

Cost-Effectiveness of Child Care Models 

Child care at Kalsec is considered a benefit – a very important one, according to Nykaza and Todd, that created a lot of “stickiness” and cost savings when it comes to recruitment and retention. 

“We find the benefits of the daycare center to be really additive to our business,” said Nykaza. “When we recruit people, and we have that, we’ve got a leg up on everyone who doesn’t. When we try to retain people and somebody says, ‘I’m going to take another job here,’ and they go home, and maybe their partner says, ‘Well who’s going to take care of the kids?’ then they think ‘okay, maybe I’ll stay.’” 

Outside of finding and keeping top talent and saving money, these programs also can be made to work for your company’s culture and needs. 

At Kalsec, they ask every employee who sends their kids to the Farmhouse to contribute something on a graduated scale. So those who make less do not pay as much as someone who makes more, making the option more affordable and accessible. 

If that is not enough, Nykaza cited other options available, such as Michigan Tri-Share, which evenly divides the cost of care between the company, state, and parent. 

“Beyond individual employers deciding to help solve the child care challenges faced by their employees, I hope [this panel] represents that the issue of child care and preschool availability and quality is now a central part of the conversation about what it means for Michigan to have a good business climate,” said Bartik. “Good business climate, traditionally when business groups lobby, has to do with things like business taxes, business regulations. This whole issue of whether women can work, how children develop, also needs to be critical.” 

This Mackinac Policy Conference session was hosted by JPMorgan & Chase Co.