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Management Buzz 05/03

Taking advantage of child-care credits; show your gratitude and keep your employees

Extra Credit
Not many companies cash in on the state income tax child-care credits offered by 25 states, partly because many corporations don't have to pay state income taxes. But it's also likely that companies just don't know about the credits, says Christina Smith Fitzpatrick, senior policy analyst with the National Women's Law Center (NWLC) in Washington, DC.

Specifics vary by state but typically credit is given for the cost of offering even low-cost benefits like child-care referral services and help with last-minute child-care in case of emergency, travel or sickness. Most states save the most generous credits for companies that build and run their own on-site child-care centers.


Absenteeism cost $789 per employee in 2002, a
30%
increase from 2000.
SOURCE: CCH Inc.

Some of the states' generosity is paltry, but others offer plenty. Mississippi, for instance, offers companies credit for half of what they spend on company-owned child-care centers-yet only two firms in Mississippi took advantage of that credit on their 2001 state tax returns.

Find out if your state offers child-care benefit tax credits by contacting the NWLC or your state's tax agency. Links to each state's tax agency can be found at the Federation of Tax Administrators' Web site (www.taxadmin.org).

Paying Your Respects
If you build it, they will stay. "It" is a workplace that respects workers despite the high unemployment rate. It's tempting to think your employees are lucky to have jobs, but that will backfire when the economy improves, say workplace consultants.

"You lose dissatisfied people first who [can't] tolerate mediocrity," says business strategist Roger Herman of the Herman Group, a consulting firm in Greensborough, North Carolina.

Though they may appear compliant, your best people may be planning a quick escape at the first opportunity, adds human resources consultant Sharon Jordan-Evans, author of Love 'Em or Lose 'Em: Getting Good People to Stay (Berrett-Koehler Publishers). "Those are the people you counted on to reverse your fortunes. Nobody sat down with them and said, 'You have a future here,'" she says.

Gratitude is a good attitude to cultivate for the long haul, Jordan-Evans adds. She has run the numbers on the long-term labor projections put out by the Bureau of Labor Statistics, and she estimates the economy may be 10 million workers short by 2010. The shallow labor pool is largely due to the huge number of workers who will soon qualify for early retirement.


Joanne Cleaver has written for a variety of publications, including the Chicago Tribune and Executive Female.

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This article was originally published in the May 2003 print edition of Entrepreneur with the headline: Management Buzz 05/03.

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