Investing in employees, Hormel breaks ground on child care center

AUSTIN – In 2017, Hormel Foods Corp. workers got the kind of news they already knew, but dreaded anyway — there were not nearly enough child care options here to attract would-be employees.

Six years later, Hormel is taking steps to fix that.

The Fortune 500 company broke ground Wednesday on a $5 million, 13,000-square-foot child care center that will have more than 130 day care slots, including 60 reserved for children ages 2 and under, by this time next year.

"We continue to see the need for child care in the community," said Angie Bissen, a human resources manager at Hormel. "If we're going to enable our workforce to either join or stay employed here, we really need to bring solutions to the table."

Hormel joins a growing number of businesses across Minnesota providing child care in some form to employees, even as child care slots slowly disappear throughout the state.

Child care capacity has dropped across Minnesota since 2000, particularly in rural Minnesota, according to research from the Center for Rural Policy and Development. In greater Minnesota, some 116,000 slots were available in 2000 for children at family day cares and child care centers. But by 2020, more than 20,000 slots were gone as more family day cares closed.

Metro child care only lost 2,700 slots during that same time period, to just under 127,000 in 2020.

A 2022 report from the center shows family-based child care providers are leaving the industry at an increasing rate. About 6,500 spots for child care disappeared in 2021 alone because providers quit their jobs. Child care centers continue to open but not fast enough to make up the difference; they start up mostly in metro and larger rural communities.

At the same time, employers continue to struggle filling jobs as labor market conditions remain tight throughout the state.

"Workers have more options, but what they don't have options on is child care," said Nicole Griensewic, executive director of Region Nine Development Commission in southern Minnesota. "And so employers have to get more and more creative on benefits and to attract and retain employees."

Harmony Enterprises in Harmony, CCM Health medical clinic in Montevideo, General Mills in Golden Valley, Boston Scientific in Maple Grove, Taylor Corp. in North Mankato (whose owner, Glen Taylor, also owns the Star Tribune), and Best Buy in Richfield are among the companies that have directly funded child care centers for employees and the community.

Other companies such as Marvin Windows in Warroad and Maud Borup in Le Center are considering opening child care centers to help attract workers. Even some of the state's largest employers such as Mayo Clinic have gotten into child care: Mayo offers several back-up child care options for workers who have problems with their regular providers, but it doesn't offer routine, scheduled child care.

While company-sponsored child care works for a community like Austin with a large employer, it's not necessarily the most realistic approach across the state. Marnie Werner, vice president at the Center for Rural Policy and Development, points out Hormel can help operate a child care center at a deficit each year, but other communities without large-scale employers have to find partnerships and create incentives to keep day care providers open.

"Communities shouldn't look to [employers] and say, 'OK, fix this,' " Werner said. "Everybody needs to step up and get involved."

This isn't the first time Hormel has helped fund child care options in its hometown. The Hormel Foundation kicked in money to help open Apple Lane Child Care Center in 2013, a 198-capacity center.

Apple Lane was at capacity pre-COVID, but it went down to 20 children at one point as a majority of kids stayed at home. The center has largely recovered since then — it has about 28 openings for a newly expanded preschool program.

Yet there are still area family providers with slots open for kids and it can be tough to find workers qualified to teach children that young, according to Shannon Hart, the director of Apple Lane.

"The dynamics with COVID definitely made a change in our area, from what I see," Hart said.

A 2017 survey done through the Rural Child Care Innovation Program found Austin needed hundreds of child care slots to keep up with growing demand.

Hormel announced its intention in 2019 to build a child care center after worker surveys and company studies, but it didn't move forward on its plans in part because of COVID. Company officials found a location last year in northwest Austin within the community's business district.

Hormel employees will have preferred enrollment at the Hormel Foods Early Childhood Center once it opens in April 2024, but company officials stress the center is open for any local resident.

Austin Mayor Steve King said city officials were happy to provide tax abatement for 15 years after the center opens since the community currently needs about 600 more child care slots.

"When folks are looking for a place to live or work, what they're looking for is generally schools, housing and child care," King said. "If we don't have those available, they're going to move on."

Includes reporting by staff writer Dee DePass.