Hormel Foods to Build Child Care Center to Address Employee Demand

What’s happening: The Fortune 500 company plans to break ground late April on a $5 million facility that will serve up to 130 kids of employees and community members in Mower County.

• They expect the highest demand for slots at the 13,000-square-foot center to be for infants and toddlers.

The big picture: Hormel joins a small but growing number of employers across the nation that are offering child care in a bid to recruit and retain working parents in today’s tight labor market.

“You don’t have a workforce if you don’t have child care that they’re able to rely on,” Angie Bissen, Hormel’s manager of HR business partners, told Axios.

Between the lines: Child care access is an issue everywhere, but finding affordable and reliable options can be especially challenging for workers— and employers — outside the metro.

• Rural areas have lost thousands of smaller in-home providers since the pandemic, but price points and class sizes can make the economics of running a larger center especially difficult.
• The city of Austin, where Hormel is located, is short an estimated 531 slots for young kids, according to a First Children’s Finance survey. In all, Greater Minnesota needs more than 40,000 more spots.

Context: Bissen said the company really began looking at ways to address employees’ child care concerns back in 2017. But centers they contacted said opening a location in the city of 26,000 wouldn’t be profitable.

• So Bissen and others started to explore building one on a piece of company-owned land. Employee surveys showed strong demand.
• Hormel officials toured other Minnesota companies that offer child care for employees, including Allianz in the Twin Cities, and decided to partner with Bright Horizons as a center operator.
• Recently approved tax incentives will offset some of the upfront costs — and expected losses as the center gets off the ground.