Tackling Childcare: The Business Case for Employer-Supported Childcare MINI CASE STUDY Sumitomo Chemical Company Ltd. ABOUT THIS MINI CASE STUDY This mini case study was developed as part of IFC’s Tackling Childcare initiative, led by IFC’s Gender Secretariat, that resulted in the 2017 report, Tackling Childcare: The Business Case for Employer-Supported Childcare. The report serves as a guide for companies and draws on 10 in-depth case studies of companies from around the world that offer various childcare options to their employees, highlighting how investments in childcare can strengthen the bottom line. It also discusses how companies can analyze their workforce to identify the type of childcare support they can offer to their employees—from on-site childcare to subsidies—that best suits their needs. In addition, the report includes “mini” case studies of companies, such as Sumitomo Chemical, that are implementing innovative approaches and benefiting from their childcare investments. Sumitomo Chemical is part of IFC’s Tackling Childcare Partnership, a Clinton Global Initiative Commitment to Action. The partnership includes 11 companies and six organizations working to promote better career opportunities for working parents and to accelerate the spread of best practices for employer-supported childcare. Visit www.ifc.org/tacklingchildcare to download the full report and learn more. ABOUT IFC IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. 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Additionally, “International Finance Corporation” and “IFC” are registered trademarks of IFC and are protected under international law. September 2017 2 Policy Overview Japan Leave policies Paid maternity leave Yes 98 days Paid paternity leave No Parental leave is available to men Economy name: Paid parental leave Yes 309 Japan Main business city: Legal obligation for employers Tokyo* to support childcare 0-2 years 3-5 years Region: Obligation for employers to support childcare? Yes Yes OECD high income Based on the number of female employees? No No Based on the number of employees regardless of gender? No No Income level: Special legislation on employer-provided High income childcare? No No Population: 127,131,800 Government incentives to Female population: employers to support childcare 65,306,963 Tax benefits to employers to support childcare? No No Non-tax benefits to employers to support Yes (subsidy Yes, (subsidy childcare? (monetary and/or nonmonetary benefits) to cover to cover Labor force nursery nursery participation (15+): building and building and 49% female operations operations 70% male expenses) expenses) Compulsory primary education Quality of private childcare services enrollment age: License or registration required? Yes Yes 6 years Zoning requirements? No No Pupil-teacher ratio required? Yes Yes Penalties for non-compliance with laws? Yes Yes *The Women, Business and the Law data are based on domestic laws and regulations that apply to the main business city of the economy. For more information on the methodology including the maternity/paternity/parental leave calculation methodology, visit wbl.worldbank.org 3 Case Study: JAPAN Sumitomo Chemical Company Ltd. Sumitomo Chemical Company Ltd. Box 1.1—Sumitomo Chemical: A Snapshot Sumitomo Chemical Employee Profile 2016 • 16% of Sumitomo Chemical’s 9,012 permanent employees in Japan are HOW SUMITOMO CHEMICAL SUPPORTS women EMPLOYEES WITH CHILDCARE NEEDS1 • 18% of permanent employees have children ages 0 to 5 years During the past decade, the Japanese economy has experienced a steady increase in women’s labor force participation, which hovers around 66 percent Sumitomo Chemical supports working (OECD, 2015b). Despite an increase over time, the rate is still lower than many parents through: other developed countries in the Organisation for Economic Co-operation and • On-site and near-site childcare Development (OECD). The Japanese government has made various efforts to facilities increase women’s employment to spur Japan’s economic growth, more recently • Childcare leave under the Prime Minister’s Womenomics initiative. Yet women’s educational • Nursing care support services advancement has not been translating into greater employment, particularly in • Maternity return/Reemployment Japan’s Science, Technology, Engineering, and Mathematics (STEM) fields. In 2015, system undergraduate women in Japan represented less than one-sixth (13.6 percent) of • Measures to support expectant engineering majors and only 14.4 percent of Japan’s researchers in science and or nursing mothers, including technology were women in 2013 (Catalyst, 2016). telecommuting and reduced working hour system Key contributing factors to women’s low labor force participation include the • Paid maternity and paternity leave & unequal gender division of unpaid family care work (Addati et al., 2016) and other forms of leave lack of access to affordable, good quality daycare. A culture of long working hours further impedes work-family balance, and reduces fathers’ scope for sharing family work (OECD, 2015a). Although parental leave policies apply to both parents, only 2 percent of fathers took such leave in 2014 (Gender Equality Sumitomo Chemical Bureau Cabinet Office, 2016). As a result of these factors, when Japanese women is a significant become mothers for the first time, almost 70 percent of them stop working for a decade or more (many of them quit for good), compared with 30 percent in the stakeholder in Japan’s U.S. (The Economist, 2014). STEM industry, having Japan has a number of regulations in place to support working parents, recruited 254 STEM particularly mothers. These include a year of paid parental leave for both graduates, 210 men and mothers and fathers, a right to work part-time until a child reaches age three, 44 women, between and investments to increase the availability of childcare (Gender Equality Bureau Cabinet Office, 2016). Under the 2003 Act on Advancement of Measures 2015 and 2017. to Support Raising Next-Generation Children (extended in 2013), all companies 4 Case Study: JAPAN Sumitomo Chemical Company Ltd. PHOTO: COURTESY OF SUMITOMO CHEMICAL COMPANY LTD. “At Sumitomo Chemical, we believe it is not only unfortunate for a company to have valuable employees give up their careers due to difficulties in managing work and childcare but it is also unfortunate for employees themselves and their families. And this is a great loss for society SUMITOMO CHEMICAL’S CHILDCARE FACILITY IN OSAKA, JAPAN. as well. Providing an adequate environment for our employees a significant stakeholder in Japan’s STEM industry, having to continue their careers and recruited 254 STEM graduates, 210 men and 44 women, fulfill their roles as parents brings between 2015 and 2017. greater employee satisfaction Support to working parents is part of the company’s overall and productivity.” strategy to meet its gender diversity and women in leadership targets. The company has set quantitative targets of at least 10 General Manager of Employee Welfare percent women in positions equivalent to manager or above and 15 percent women in positions equivalent to assistant manager or above by 2020. As of April 2016, the former ratio was 4.3 percent and the latter ratio was 13.0 percent with more than 100 employees must develop and publish (Sumitomo Chemical, 2016a). The company’s strategy to meet plans for achieving work-family balance for employees these targets includes a variety of corporate policies and raising children (Umeda, 2014). programs that include childcare-related benefits. Sumitomo Chemical, a leading chemical company headquartered in Japan, understands the challenges HOW SUMITOMO CHEMICAL working parents face and recognizes the business benefits SUPPORTS WORKING PARENTS of recruiting and retaining working parents and fostering To encourage and enable parents, particularly working gender diversity in the workforce. Sumitomo Chemical and mothers, to stay employed, Sumitomo Chemical offers an its more than 150 subsidiaries and affiliates conduct business extensive set of childcare-related benefits, including childcare globally in five sectors, namely petrochemicals and plastics, facilities, a childcare leave program, and various childcare and energy and functional materials, IT-related chemicals, health nursing care services (see Box 1.1 for an overview). and crop sciences, and pharmaceuticals, with a combined net income of JPY 81.5 billion (around USD 715 million) and Childcare Facilities more than 30,000 employees (Sumitomo Chemical, 2017). In Sumitomo Chemical has established six state-of the-art its Japan HQ, the company employs 9,012 workers, of which childcare facilities across Japan, including in the Tokyo and 1,452, or 16 percent, are women. Sumitomo Chemical is also Osaka Head Offices as well as in Ehime, Chiba, Takarazuka, 5 Case Study: JAPAN Sumitomo Chemical Company Ltd. and Oita. The first childcare facilities were established in 2008 in Ehime and Osaka followed by the Chiba facility in 2009. “Knowing that I can be easily and Other facilities were established between 2010 and 2015. The childcare facilities are subsidized and open to both female and quickly reached and see how my male employees. Users are charged a small portion of the fee, child is doing when my child is not which is lower than government-run facilities. The fee paid feeling well gives me great peace by the user is JPY 30,000 (around USD 265) for an infant, in of mind and I can better focus on principle 0 to 2 years old, and JPY 20,000 (around USD 175) for 3 to 5-year-olds. Some of these facilities are on-site while my work.” some are near-site. Childcare facility user As of November 2016, the six facilities cater to a total of 180 children, ages 0 to 5 years, of 144 working parents (27 women, 55 men, and 31 couples), with the largest childcare facility in Ehime catering to 39 children, ages 0 to 5 years, of 30 employees (14 female and 16 male employees). Sumitomo both female and male fulltime employees. Sumitomo has Chemical is encouraged that more men than women utilize employed special staff to run the daycare and also provides its childcare facilities, which can help redefine caregiving roles free 500 ml of milk to each child until they are 12 months old. and enhance gender diversity in the company, in the Japanese In addition to childcare facilities, the company offers various chemical industry, in STEM occupations, and in the larger support services for nursing or expectant mothers, including a Japanese society. maternity return and reemployment system, telecommuting, The six childcare facilities are operating at almost full capacity 2 reduced working hours, and various forms of leave for working and four of them also have a waitlist, which reflects the parents (see Box 1.2 for more details). high demand for these services among working parents at Sumitomo Chemical. Through these facilities, the company has THE BUSINESS IMPACT OF also created jobs for daycare managers, caregivers, cleaners, SUMITOMO CHEMICAL’S CHILDCARE and other support staff, employing a total of 80 staff across BENEFITS the six facilities. All facilities have on-site physicians and most Sumitomo Chemical’s annual costs of providing childcare of the locations provide free health care for children as part through the six facilities is approximately JPY 270,504,000 of the government’s health care program. To minimize the (around USD 2.3 million). This amount includes salaries of day-to-day administrative costs of running the daycare and childcare center staff, meals, books, transport, insurance, to provide children the best early education and care possible, and utilities. Given that 144 parents are currently utilizing Sumitomo Chemical has outsourced daycare management to the facilities, this translates into a per-employee cost of JPY a licensed, third-party childcare provider. 1,878,500 (around USD 16,000). Sumitomo Chemical perceives The company has also established an exclusive, free of charge, that the business benefits related to childcare, such as a on-site daycare facility in its bednet manufacturing site AtoZ higher maternity return rate and employee satisfaction and Group in Tanzania, where Sumitomo employs approximately productivity, can help offset some of the costs of running the 8,000 workers. The daycare facility currently caters to 15 facilities. children, up to 2 years of age, of 15 working mothers but the facility can accommodate up to 30 children and is open to 6 Case Study: JAPAN Sumitomo Chemical Company Ltd. Recruitment & Retention Box 1.3—Maternity and Paternity Return Rates at Since the childcare facilities were launched in 2008, the share Sumitomo Chemical of women among new Sumitomo Chemical recruits in Japan has steadily increased. The percentage of women in the Between 2004 and 2016, 329 women went on maternity company’s workforce has grown from 11.8 percent or 970 leave and 294 (almost 90 percent) of them returned women out of 8,210 employees in 2009 to 13.6 percent or 1,159 and were still employed a year later. women out of 8,521 employees (excluding part-time employees) in 2016 (Sumitomo Chemical, 2016a). As a result of targeted measures, the number of men taking paternity leave at Sumitomo Chemical has Targeted efforts have also resulted in Sumitomo Chemical increased, from 2.1 percent (18) in FY2011 to 9.8 percent experiencing a consistently high maternity return rate and an (101) in FY2015. increase in the number of women and men taking maternity and paternity leave (see Box 1.3). In FY2009, the total number of men and women who took either or both maternity/ paternity leave and childcare leave was 19. In FY2015, this number increased to 246, with an equal number of women and men taking such leaves. Anecdotal evidence suggests that although these might be the results of several complementary initiatives, childcare is an essential component of Sumitomo Chemical’s strategy for recruiting and retaining the best talent and fostering gender diversity. Box 1.2—Different Forms of Leave Since 2007, and with revised policies introduced in 2011, Sumitomo Chemical offers the following types of leave to its employees: • Paid maternity and paternity leave: Paid maternity leave is provided in line with statutory requirements. Fathers can also take five consecutive days of paid paternity leave around childbirth. • Childcare leave: All employees (women and men) can take an additional 28 days of paid leave per child until the child reaches age three. An employee can take 28 consecutive days in full, or can decide to break it up into four tranches of seven days each until the child reaches age three. • Maternal Health Leave: This leave is available before and after childbirth for health-related concerns. • Nursing Care Leave: Paid leave is available to employees when taking care of sick children or family members (up to 20 days per event). Unpaid leave is available to employees for up to 365 days per incident or illness when taking care of family members. SOURCE: SUMITOMO CHEMICAL, 2016B 7 Case Study: JAPAN Sumitomo Chemical Company Ltd. Recognition LESSONS LEARNED & NEXT STEPS Sumitomo Chemical has received positive public recognition For Sumitomo Chemical, investments in childcare and related for its support to working parents. It obtained the next- benefits are part its efforts to retain working parents and generation Kurumin certification mark in 2008, 2012, and 2015 help them improve their work-life balance. This feeds into from the Ministry of Health, Labour and Welfare (Sumitomo the company’s overall goals of fostering gender diversity in its Chemical, 2016a) and became certified as a company that workforce and leadership as well as in Japan’s STEM industry. supports childcare, meets the Ministry’s certification criteria, and successfully carries out action plans based on the Act Moving forward, Sumitomo Chemical recognizes that its on Advancement of Measures to Support Raising Next- childcare facilities are operating at almost full capacity and Generation Children. 3 the demand for childcare services will further increase. The company is now in the process of discussing how best to move forward to meet the increased demand for services. It is also considering collecting more comprehensive gender- disaggregated data on the success of its existing daycare facilities, including data on employee satisfaction and retention, and using this data to strengthen the case for expanding childcare support to meet the growing demand. THE KURUMIN CERTIFICATION MARK The company is also one of more than 1,600 companies that have demonstrated their leadership on gender equality by signing on to the seven Women’s Empowerment Principles (WEPs), a global joint initiative of the UN Global Compact and UN Women. The WEPs initiative emphasizes the business case for investing in women and provides businesses guidance on how to support women in the workplace, marketplace, and community. 8 Case Study: JAPAN Sumitomo Chemical Company Ltd. Endnotes 1 The information presented in this IFC Tackling Childcare “mini” 2 This can vary as different age groups have different staff-to-child case study is based on data gathered throughout 2017 in collabora- ratio requirements. tion with Sumitomo Chemical’s Japan HQ as well as on interviews 3 For more information on the Act, please visit the Japanese Ministry conducted by IFC Gender Secretariat’s Women’s Employment of Health, Labour and Welfare’s website: http://www.mhlw.go.jp/ Specialist Rudaba Zehra Nasir with Jung Eun (Angela) Lee, Manager english/policy/children/children-childrearing/dl/150407-01.pdf at Sumitomo Chemical America. Sources Addati, Laura, Florence Bonnet, Ekkehard Ernst, Rossana OECD (Organisation for Economic Co-operation and Merola, and Jessica Wan. 2016. Women at Work: Trends 2016. Development). 2015a. Inequality: Greater Gender Equality Geneva, Switzerland: International Labour Organization. for More Inclusive Growth (Japan Policy Brief). Paris, France: http://www.ilo.org/gender/Informationresources/Publications/ OECD. https://www.oecd.org/policy-briefs/japan--greater- WCMS_457317/lang--en/index.htm gender-equality-for-more-inclusive-growth.pdf Catalyst Knowledge Center. 2016. Women in Science, --------. 2015b. Labor Force Participation. https://stats.oecd. Technology, Engineering, and Mathematics (STEM): org/Index.aspx?DataSetCode=LFS_SEXAGE_I_R Quick Take. http://www.catalyst.org/knowledge/women- Sumitomo Chemical. 2017. Corporate Profile. http://www. science-technology-engineering-and-mathematics- sumitomo-chem.co.jp/english/company/about/ stem#footnote30_eu4s1q4 --------. 2016a. CSR Report Highlights: Hand in Hand with The Economist. 2014. Japanese women and work: Holding Employees. https://www.sumitomo-chem.co.jp/english/csr/ back half the nation. http://www.economist.com/news/ report/pdf/csr_report2016_p71-76.pdf briefing/21599763-womens-lowly-status-japanese- workplace-has-barely-improved-decades-and-country --------. 2016b. Work-Life Balance. https://www.sumitomo- chem.co.jp/english/csr/society/employee/balance.html Gender Equality Bureau Cabinet Office (Japan). 2016. Women and Men in Japan 2016. Tokyo: Cabinet Office. http://www. Umeda, Sayuri. 2014. Japan: Support for Raising Children of the gender.go.jp/english_contents/pr_act/pub/pamphlet/women- Next Generation. U.S. Library of Congress. http://www.loc.gov/ and-men16/index.html law/foreign-news/article/japan-support-for-raising-children- of-the-next-generation Ministry of Health, Labour and Welfare (Japan). 2016. Revision of the Act on Advancement of Measures to Support Raising Women’s Empowerment Principles. 2017. Overview. http:// Next-Generation Children. http://www.mhlw.go.jp/english/ www.weprinciples.org/Site/PrincipleOverview/ policy/children/children-childrearing/dl/150407-01.pdf 9 Contact Information IFC 2121 Pennsylvania Avenue, NW Washington, DC 20433 USA +1 (202) 458-2262 BMurti@ifc.org www.IFC.org/gender @WBG_Gender ifc.org September 2017