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Vietnam Employers Fund Child Care at Nike Factory, Boost Productivity

FILE - Children get picked up to go home after school in Ho Chi Minh City, Vietnam.
FILE - Children get picked up to go home after school in Ho Chi Minh City, Vietnam.

At a factory outside Ho Chi Minh City that makes athletic shoes for Nike, Can provides security services, while his child plays nearby. That’s because his company built a kindergarten next to the factory, part of a new trend of rethinking child care in Vietnam. As three-generation homes become less common, parents are less likely to have grandparents around to watch children while they work.

Companies that pay for these and other child care solutions say they do it for a counterintuitive reason -- it saves them money.

Eric Lee, a human resource manager at Taekwang Vina, a footwear company, estimates his company lost $1 million a year because of unplanned absences by employees.

“Opening a kindergarten has helped our factories cut unplanned absenteeism by 20 percent,” said Lee. “The benefits certainly outweigh the challenges, and we believe child care is an important part of the company’s growth strategy,” he added.

Such savings help to convince companies they should ensure that staff have a way to get child care, according to the International Finance Corporation. In addition to the ethics of access to child care, it helps to attract good employees, increase productivity, and increase staff satisfaction, the IFC said in an August report.

Companies that can’t afford to build kindergartens are offering other incentives. They include monthly subsidies to help staff pay for care, paternity and maternity leave, work from home or other flexible work, or a mix of options.

Vietnamese employees are increasingly asking for those options as society changes. It used to be that working parents often lived with their own parents, who would take care of the grandchildren so that both mother and father could go to work. However, more parents are choosing to move out now. Others are migrant workers who live far from grandparents in their hometowns.

Can, the security worker, did not have the option of grandparent sitters. So he finds it helpful to go to work knowing someone is looking after his child not far away.

“I feel that the teachers really care about my child,” he said of the factory’s kindergarten. “Communication with parents is good, and the management is transparent.”

Such “family-friendly workplaces” can give employers a hiring edge, said Kyle Kelhofer, IFC country manager for Vietnam, Cambodia, and Laos. Foreign investment is increasing in Vietnam, leading to more competition among companies to recruit workers. When companies provide support, such as child care, they are more likely to attract and retain workers, according to the IFC report.

Among other benefits, Lee said access to child care decreased the rate of turnover in the workforce at his company. Taekwang Vina said the efforts also improved its relationship with local authorities and its corporate reputation.

“When schools and daycares closed during the COVID-19 pandemic, it became clear how closely linked productivity is to child care. We cannot forget that as we head into recovery from the COVID-19 crisis,” Kelhofer said. “There is an opportunity for businesses in Vietnam to gain a competitive edge and differentiate themselves by introducing child care support for employees.”