In the second installment of our two-part child care series, Garrett Dolan, Associate Director of Human Resources at Tyson Foods, talks about Tyson’s onsite child care facility at the company’s Humboldt, TN plant, including plenty of takeaways for businesses and economic developers.
Kick us off by sharing about the child care center that Tyson has opened at your Humboldt plant near Memphis.
In July of 2023, Tyson Foods opened a new child care facility in Humboldt, Tennessee. It cost $5 million to construct and is located right next to a new manufacturing plant that will employ up to 1,500 team members. It’s my understanding that this is one of the first of its kind in the sense that it’s on-site, it’s curriculum-based, and its operating hours reflect the hours of the manufacturing plant itself. It’s subsidized by the government, and subsidized by Tyson. And it’s subsidized at a level that the people earning the median manufacturing wage in the state of Tennessee can afford. So in other words, it’s very convenient, very affordable and high quality. And that’s what makes it special.
Did this facility open alongside the plant?
The plant opened about a year before the child care center opened. But we knew when we were doing the initial planning for the plant up to four years ago that we were going to have to consider child care, because Tyson tends to put plants in rural locations. So sometimes you have to do extra things to help people be able to go to work and stay at work. Child care was something we knew is important to our team members, but we wanted to really experiment to figure out how effective it is at actually helping people work.
Can you share more about the costs associated with the facility?
The cost of child care varies widely depending upon the quality of care. Tyson’s child care center is called a learning center. And so what that really means is we’re a curriculum-based program, so we’re at the high end of the quality scale. And childcare in Arkansas at the high end costs about $12,000 a year per child, on average. When you look at spending $12,000 a year for child care, no matter how much money you earn, that’s a lot. You really have to think about: can I make a product available that’s helpful to the team member at a level they can afford? So when we were planning this facility, we had a profile in mind. We were saying, okay, the median manufacturing wage for labor jobs in Tennessee is about $37,000 a year. Can someone that earns $37,000 a year afford $12,000 in child care? And the answer is no. That’s the root of all child care problems, by the way.
What we started to do is design it backwards. We said, okay, how do we make it affordable for someone that earned $37,000 a year? We did a couple of things. First off, the federal government’s Health and Human Services recommends that parents pay no more than 7% of their annual income on child care. Take the $37,000 a year, the median wages, and 7% of that is $2,500 a year. So you say, okay, let’s assume a parent is going to pay $2,500 a year for child care, and that’s fine and affordable for them. That still leaves $9,000+. Where are we going to get that money from? How are we going to close this affordability gap so that parents can actually afford it and use it?
We started by looking at states that offered subsidy programs and the rules they had for them, and we decided that Tennessee was an attractive place for us in that they had rules that made it possible for the people that earn the wages that we employ to access some of those state funds. We decided every team member’s child is guaranteed at least $6,500 from Tyson. No matter if you can get the state subsidy, you can definitely get Tyson’s subsidy. And we felt when we were doing this analysis three and a half years ago … we felt that’s pretty compelling … it’s now going to be affordable and team members are going to want to use it, with the subsidies in place and knowing what their contribution would be.
The center has only been open for about six months; what outcomes have you seen so far?
Right now, we’re open just for the first shift, which is roughly 5:30 in the morning to 6:00 at night — an eight hour work shift plus an hour on each side. We’re not doing the second shift yet. The capacity of our center carries about 125 children, and right now we are at roughly 70 children representing about 63 employees. I’m told by KinderCare, which is the company we hired to manage the facility, that’s an excellent utilization rate. They say it takes 18 months to get up to capacity of the facility. The metrics that we’ve observed so far is the retention rate of the employees using the child care is very high compared to that of the manufacturing plant. We also know that of those 63 people that I mentioned that use the center today, about 20% of them came back to work or came to work for the first time because now they could afford child care. We had two primary objectives with our child care facility, in addition to offering great care: how do we help our team members stay at work? And, how do we expand the pool of people who can access work? And so those are two metrics that we measure all the time, and we’re quite happy with those metrics.
Will Tyson replicate this at other locations?
I would love to replicate this at our other locations. I can tell you 100% the need is there. The challenge for an organization like Tyson is running child care facilities is expensive, and it’s not a core business activity. But we’re entering a space where companies now need to do new things in order to attract labor and make sure labor can stay. It’s no longer enough to just say, we’re going to give you a wage and we’re going to give you medical benefits. We have to step in and start solving people’s problems, like child care. So we will wait for 18 months at this Humboldt facility and we’ll look at our metrics. Are we full? How’s our retention rate? Have we expanded the pool of people available to work? And then we’ll make a calculation about whether or not we should go do it at another plant.
I will say there are other ways to support child care other than onsite care. Onsite care is expensive because you have to build the building. Other options are to enter in partnership, for example, with a nonprofit like the YMCA or somebody else who already has a building, making it much more affordable.
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Tyson Employee 1 [00:00:07]:
I love the staff. I love how they interact with each child. I love how they do different activities with them, play with them. And, you know, he’s happy here. So, you know, if he’s happy, I’m happy.
Tyson Employee 2 [00:00:20]:
They teach my child. And he has really progressed. He’s saying colors, numbers. So not only is it I have a place for him to go, he’s also learning while he’s here.
Amanda [00:00:30]:
Those are the voices of Tyson Foods employees who utilize the learning center at the company’s Humboldt, Tennessee plant. Today I’m talking with Garrett Dolan, Tyson’s Associate Director of Human Resources, who joins us to chat about Tyson’s innovative childcare facility and ideas for local economic developers to support childcare infrastructure. I’m Amanda Ellis, and you’re listening to Inside America’s Best Cities, a podcast for chamber, economic development, and talent attraction professionals. Learn more about this podcast at livabilitymedia.com and with that, let’s jump in. Garrett, thank you so much for taking a few minutes today to join us on Inside America’s Best Cities. I know this is going to be an awesome interview, and I’m so excited to chat with you about childcare at Tyson.
Garrett [00:01:19]:
Me too. Thank you for the opportunity. I appreciate it.
Amanda [00:01:22]:
Can you kick us off by just talking a little bit about the childcare center that you’ve opened at your Humboldt plant near Memphis? Why you all created that, what it looks like right now?
Garrett [00:01:34]:
Yeah. So in July of 2023, Tyson Foods opened up a new childcare facility in Humboldt, Tennessee. It cost $5 million to construct and is located right next to a manufacturing plant, which is a new manufacturing plant that will employ up to 1500 team members. Those team members will work in two shifts. So a very early morning shift and an evening shift. It’s my understanding that this is one of the first of its kind in the sense that it’s on site, it’s curriculum based, it’s operating hours reflect the hours of the manufacturing plant itself. It’s subsidized by government, and subsidized by Tyson. And it’s subsidized at a level that the people earning the median manufacturing wage in the state of Tennessee can afford. So in other words, it’s very convenient, very affordable and high quality. And that’s what makes it special.
Amanda [00:02:34]:
So did this open alongside the plant?
Garrett [00:02:37]:
The plant opened about a year before the childcare center opened. But we knew when we were doing the initial planning for the plant up to four years ago that we were going to have to consider childcare because Tyson tends to put plants in rural locations where the animals are, not where a lot of people are. So sometimes you have to do extra things to help people be able to go to work and stay at work. And childcare was something we knew was important to our team members, but we wanted to really experiment to figure out how effective it is at actually helping people work.
Amanda [00:03:14]:
Yes. Well, super innovative model, of course, on a topic that’s being talked about a lot now in a lot of different spaces, especially economic development. And just knowing that it’s hard to build your workforce if parents are having to worry about what they’re going to do with their kiddos.
Garrett [00:03:30]:
You know, when you look at manufacturing workers, and really, when I talk about care at Tyson, I’m really talking about manufacturing workers, because those are the people we employ. They have common challenges. It usually relates to affordability and availability of housing, affordability and availability of childcare, and transportation. Those three issues are really challenges that people have to say, you know, can I afford to do this? And if I can do these services even exist, something in my price range. So no matter what manufacturer you are, Tyson, or any company, you have to think about those things for your workforce. If stabilizing your workforce is the most important thing to you.
Amanda [00:04:17]:
You talked a bit already about affordability and just making sure that everyone working there can access this service. So can you talk a little bit more about what those costs might look like for someone working there? And I know there have been partners in subsidizing that. So can you share more detail on that part?
Garrett [00:04:34]:
Sure thing. So the cost of childcare varies pretty widely depending upon the quality of care it is. Tyson’s childcare center is called a learning center. And so what that really means is we’re a curriculum based program, so we’re at the high end of the quality. And childcare in Arkansas at the high-end costs about $12,000 a year per child, on average. When you look at spending $12,000 a year for childcare, no matter how much money you earn, that’s a lot of money. And so you really have to think about, can I make a product available that’s helpful to the team member at a level they can afford? And so when we were planning this facility, we had a profile in mind. We were saying, okay, the median manufacturing wage for labor jobs in Tennessee is about $37,000 a year. And so can someone that earns $37,000 a year afford $12,000 in childcare? And the answer is no. And that’s the root of all childcare problems, by the way. But what we started to do is design it backwards. We said, okay, how do we make it affordable for someone that earned $37,000 a year? And so we did a couple of things. First off, the federal government health and Human Services recommends that parents pay no more than 7% of their annual income on childcare. And so you take the $37,000 a year, the median wages, and 7% of that is $2,500 a year. So you say, okay, let’s assume a parent is going to pay $2,500 a year for childcare, and that’s fine and affordable for them. That still leaves us $9,000+. Where are we going to get that money from? How are we going to do this affordability gap so that parents can actually afford it and use it? So we started by looking at the states that offered subsidy programs and the rules they had for them, and we decided that Tennessee was an attractive place for us in that they had rules that made it possible for the people that earn the wages that we employ to access some of those state funds. And so we also mapped on, we said every child that uses that facility of a team member is guaranteed at least $6,500 from Tyson. So no matter if you can get the state subsidy, you can definitely get Tyson’s subsidy. And we felt when we were doing this analysis three and a half years ago, we felt that’s pretty compelling. It’s a compelling story. It’s a compelling offer. We should proceed because we think it’s now going to be affordable and team members are going to want to use it, just with the subsidies in place and knowing what their contribution would be.
Amanda [00:07:28]:
Yeah, that’s pretty amazing. Talk about what some of the outcomes have been like so far, because I know the center has only been open about six months. So did it fill up immediately? Is there still space? What if you run out of space? What’s some of that looking like?
Garrett [00:07:43]:
Yeah, so the childcare center is open right now just for the first shift, which is roughly 530 in the morning to six at night. And so it’s an eight hour work shift plus an hour on each side. We’re not doing the second shift yet. The capacity of our center carries about 125 children, and right now we are at roughly 70 children are using the facility six months in. Now, I’m told, by kinder care, which is the company we hired to manage the facility, that’s an excellent utilization rate. They say it takes 18 months to get up to capacity of facility. So I’m taking comfort in that. We have the 70 children in the facility, which represents about 63 team members, 63 employees. The metrics that we’ve observed so far is the retention rate or the stability rate of the employee, the team member, is very high compared to that of the manufacturing plant. We’re running at about 30% to 40% better in terms of retaining parents that are using childcare than the plant is with retaining a team member, not using childcare. We also know that of those 63 people that I mentioned that use the center today, about 20% of them came back to work or came to work for the first time because now they could afford childcare. We had two primary objectives with our childcare facility, in addition to offering great care, but it’s how do we help our team members stay at work, and then how do we expand the pool of people that even could access work? And so those are two metrics that we measure all the time, and we’re quite happy with those metrics.
Amanda [00:09:34]:
What are the ages of children?
Garrett [00:09:37]:
Roughly six weeks to five years old when you start kindergarten.
Amanda [00:09:42]:
And you mentioned that this is a franchise that you use to create this, so can you talk more about that? And then employees of that center, like, are they Tyson employees? Or how does that all shake out?
Garrett [00:09:54]:
You know, you want premium care for children, and it’s certainly a heavily regulated industry. So we decided early on that we wanted to hire an industry expert. And so we went out for requests for proposals and interviewed lots of firms and ended up choosing a company called Kinder Care. They operate several hundred, if not a thousand, childcare facilities around the country in different shapes and forms. So they know all the regulations, they have the curriculum, and they hire the staff. So what kinder care does is they give me a bill every month and said, your bill for running this center is x. And Tyson pays that bill according to the standards that we’ve agreed to, which suits us, because we don’t want to be in the business of running care centers.
Amanda [00:10:40]:
Is the idea that you might replicate this at some of your other locations, as you continue to see how it’s going?
Garrett [00:10:48]:
Yeah, I would love to replicate this at our other locations. I can tell you 100% the need is there. The challenge for an organization like Tyson is running childcare facilities is expensive, and it’s not a core business activity. Right. It’s like when we have to make a trade off, are we going to invest 5 million on a childcare facility or invest 5 million in a new manufacturing line that’s going to make chicken nuggets? Which would be more profitable? The answer is usually the chicken nugget line. But we’re also entering a space where companies now need to do new things in order to attract labor and make sure labor can stay. It’s no longer enough to just say, we’re going to give you a wage and we’re going to give you medical benefits. We have to step in and start solving certain problems they have, like childcare. So we will wait for 18 months at this Humboldt facility and we’ll look at our metrics. Are we full? How’s our retention rate? Have we expanded the pool of people available to work? And then we’ll make a calculation about whether or not we should go do it at another plant. I will say there are other ways to do childcare other than onsite care. Onsite care is expensive because you have to pay to build the building. We could enter in partnership, for example, with a nonprofit like the YMCA or somebody else who already has a building, making it much more affordable to us. But we’re not ready yet to do that because we want to make sure that it’s effective and acceptable by our workforce.
Amanda [00:12:30]:
And that’s a great lead into my next question. So, our listeners are folks in the economic development Chamber of Commerce spaces that have a lot of local stakeholders, local companies that they work with. What can those groups be doing to help some of their local companies replicate efforts like this? And also just knowing that not all of those stakeholders are as large of companies with as many resources as others.
Garrett [00:12:56]:
That’s a great question. I used to work in economic development years ago, and economic development is usually concerned with creating new jobs and making sure the skills of the workforce is high so they can remain employed. Nowadays, they’re also starting to look at how do I make sure that the people in my community can get a job? And so it’s bringing them into how do I solve some of these social barriers to work, like affordability and availability of childcare? So there’s two big decisions Tyson had to make about childcare, and I’ll just repeat them, but they’re worth repeating. We had to decide, were we going to invest $5 million to build this thing for ourselves? And then the second decision we had to make is, are we going to subsidize the tuition so that parents can afford it? When a company like ours is having to make that decision, it raises the threshold, the level of complexity a lot higher. It is much easier for us to make decisions about subsidizing the benefits of an employee. Think about your medical benefits and life insurance and those things. It’s easier for us to think about that on an annual basis. It’s very difficult for us to think about using our capital dollars to build new facilities. And this is why economic developers are so important, because the power they have to bring the community together. Multiple employers, let’s say, to share in the cost to build a childcare center, then, of which each company could use, could tap into it and say, I’m going to use 15 slots, I’m going to use 20 slots. It makes it affordable and spreads the risk across everybody about how to do that plant. And there’s one example in the state of Tennessee which I thought was really interesting. It’s called the Clarksville-Montgomery County Industrial Development Board. And really what this is, it’s an industrial park. Well, this whole area did not have childcare. It was a common pain point across multiple companies. And so they decided to create this industrial park model, which is just as I was explaining, the industrial Development board offered a piece of property for free and they gave a tax abatement. They did an RFP process to find a vendor to operate a childcare facility, and now they have. Construction is underway in building this facility to benefit the industrial park. I’m not quite sure what status it is in the construction phase right now, but it’s a really good example of economic developers coming together, seeing the problem and proactively solving it in ways that they might not have done before.
Amanda [00:15:42]:
It’s really interesting to see what some groups are doing. I know another approach I’ve heard a good bit about is home based centers, so communities working to help people get the right certifications and engage in that process. And even though those may not be able to take as many kiddos, it’s a really interesting model, especially in rural areas where everything might be pretty far away from each other, kind of being able to spread out capacity.
Garrett [00:16:07]:
Absolutely. Home based childcare is a smart way to go because you think about it, you don’t have to build anything. What you need to do is just train the person providing the care. And state regulators make sure that they’re not having too many kids. So it’s a system that you can leverage pretty quickly. For a manufacturing company like Tyson, we were a little uncomfortable with that model because our business requires that everybody must be at the manufacturing line by a fixed time every day. Like by 06:00 I need 1000 people on that line. We felt like we needed more control over removing the barrier of childcare. And so we felt in order, the only way to guarantee people to show up is make sure that there was no hurdles to whether or not they can get care, their neighbor didn’t get sick or something happened where they’re not able to provide care and then we would lose that worker, which is really counter against the whole reason why we were doing this. So I agree, absolutely, home based care is a good solution, but it’s one that’s a little complicated for fixed based employers where you have to be on the job at a specified time.
Amanda [00:17:21]:
Well, and think about as parents how much easier it would just make those early mornings, right, to just pack your kid or kids up in the car and you’re all going to the same place. And we haven’t even talked here yet about the positive early education outcomes from something like this, with having people trained to work with this age group and make sure that they’re hitting all those right milestones.
Garrett [00:17:45]:
Yeah. For Tyson, we decided early on that we didn’t want a childcare facility that was just babysitting and playtime. What we wanted was what we call an early learning center, which was curriculum based, where you’re actually educating children. And we know from the literature, the resources out there, that if you take a child through childcare, at least through three years of childcare, by the time they’re ready for kindergarten, they’re nine months ahead of their peers who didn’t go to childcare. And that was really important to us because we saw that as a value add for the parents. The parents really, they really are concerned about what are my kids doing and are they being enriched? So we decided to go with that model also, I’ll mention that as we were going through the planning phases for childcare in a particular community, it was important to the community that not only, number one, that we offer childcare, I said to them, of all the things Tyson might be able to help with, transportation and roads and schools and childcare and all this stuff. They said, number one is childcare, which I was very pleasantly surprised to hear. So offering it was important, but the reason why they wanted it is because they felt it was the best way to help kids prepare for school and as a result, improve the quality of the school district. And so we said, great, we want to help our team members and their kids, and we want to be a community contributor. So that was how we came to the process of deciding that doing a learning center was important.
Amanda [00:19:26]:
It’s going to be pretty cool to be able to get data about how some of those kids do perform once they get to kindergarten.
Garrett [00:19:33]:
I’m looking forward to it. I have to wait another four years before that happens. But hopefully it’ll pan out like the literature has at other locations. And I think it will. We’ve just done a round of surveys of parents using the center and asking them why do they like it? And usually it comes down to three answers. One, they can afford it. Number two, it’s convenient. And number three, it’s that enrichment discussion. It’s really helping my child with, there was one mom who was talking about, my child has a speech impediment. Now the speech pathologist goes to the childcare center and meets with the kid and helps them develop the skills they need to remove that speech impediment. So that’s really meaningful when a parent has that and when a parent speaks to that. Tyson, our chest kind of puffs out a little bit because we’re proud. We know we’re helping that family, but we also know we’re building a very loyal relationship with an employee.
Amanda [00:20:34]:
It’s pretty amazing. And just thinking about, too, how much easier that’s going to make life for that parent to just have that taken care of while they’re at work, because I think the way that conversations are going now, yeah. There are more remote workers and a lot of people in flexible jobs, but there are still plenty of people in jobs that aren’t as flexible.
Garrett [00:20:50]:
Right. Pick a manufacturing job and those are the ones that are not flexible.
Amanda [00:20:53]:
Yeah. A lot of companies want to be able to give back, and it’s pretty cool that you all have figured out a way to do that that helps you and the community. It’s a good sweet spot.
Garrett [00:21:02]:
Yeah, it’s absolutely a sweet spot. In fact, we end up having a lot of elected officials come through our facility because they’re curious about what a company could do in order to build its reputation, but also to contribute in a way positive back to the community. And normally you’ll see things like companies participating in litter pickups or contributing to the high know sports stadium. This is a new and different way to contribute to the growth and development of the children of the community. And so we get lots of love for that work.
Amanda [00:21:32]:
Pretty cool work that you’re doing. And I’m so glad you were able to come on today and share that. We always close, Garrett, with a fun question. So remind me where you’re based.
Garrett [00:21:43]:
I am in Fayetteville, Arkansas.
Amanda [00:21:45]:
So we always ask, if you had to pick one bucket list item that somebody visiting your community or who had never been before should make sure to do, what would it be in Fayetteville?
Garrett [00:21:57]:
Yeah, it’s to go see the hogs basketball game. I’m a college basketball fan and although we’re having a challenging year, the last three or four years have been excellent. And there’s probably nothing as fun as being in the energy of 30,000 people going crazy cheering for kids to play basketball. That’s a great time for me when I travel to other locations. I like to go to college Downs because I like the energy and I like to see what they’re doing.
Amanda [00:22:26]:
I love it. Well, thank you so much, Garrett, for spending some time with us. I’m super excited about this interview and think our audience will get a lot out of it.
Garrett [00:22:35]:
Thank you. This is a really important issue and I can’t emphasize enough. It’s not an issue that can just be solved by a company or by the person it requires. A cluster requires for profit, nonprofit government sectors to come together and each be a part of the solution. So thank you for this opportunity to share our experiences.
Amanda [00:22:55]:
It’s so true. Thank you so much.
Amanda [00:23:03]:
Thanks for listening to the Livability podcast, where we take you Inside America’s Best Cities. At Livability, we highlight the unsung awesomeness of small and mid-sized cities across the country. We also partner with communities to reach their target companies and potential residents through digital content and print magazine programs. If you enjoyed this episode, please follow, rate, and review this show wherever you listen to podcasts. You can also learn more about us livabilitymedia.com. Have an idea for an upcoming episode? Email me at [email protected]. Until next time, from Livability, I’m Amanda Ellis, sharing the stories of America’s most promising places.
