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Backing workers upSuperior firm lands big-name clients, fundingBoulder Daily Camera - September 11, 2006 - by Kathleen JonesWhen 2 1/2-year-old Zoe Zimmerman was hospitalized with pneumonia in August, her parents took time off from their jobs to care for her.
But after Zoe recovered enough to leave the hospital, and the doctor recommended keeping her home several more weeks, father Todd Zimmerman turned to the Backup Care Options program provided by his workplace as an employee benefit through Superior-based Work Options Group.
"Zoe is no longer contagious and she's feeling better, but the doctor wants her to rest at home before going back to daycare," said Zimmerman, who works at Boulder-based New Hope Natural Media. "I just called the number they provided and Anne Marie (the caregiver) came out to our home. She has just been great. My wife and I both missed a week of work while Zoe was so sick. Now we can go back to more of a regular schedule at work."
Employee absenteeism due to conflicts between responsibilities at work and personal lives costs American businesses as much as $33.6 billion per year, according to a recent study by MetLife Mature Market Institute.
Work Options Group, a 20-year-old company, helps reduce absenteeism, providing temporary backup care that allows clients' employees to continue working during breakdowns in caregiving arrangements. Arrangements can be made to watch sick children and children home because of school closures and holidays, as well as spouses or elderly loved ones recovering from surgery or illness. Arrangements also can be made to cover for absent nannies or caregivers.
Since developing its Backup Care Options program several years ago, Work Options Group's client list has expanded rapidly, including the recent addition of Microsoft Corp., Princeton University, Reuters, The National Education Association and the Children's Hospital-Denver, said Cindy Carrillo, company president and founder. Work Options Group currently serves about 80 client employers, "representing more than 500,000 employee lives," Carrillo said.
The company reported scheduling 124,000 hours of backup care in 2005, representing a 277 percent increase from 2004. This year, Carrillo said she expects to top 200,000 hours of backup care scheduled.
She said the company's focus during the past four years has been developing the infrastructure needed for a nationwide, full-service backup program, including a national network of thousands of contracted childcare centers, home-care agencies, nanny agencies and adolescent centers to actually provide the care. The company also has developed an around-the-clock call center.
The company's rapidly expanding client list recently attracted funding from a group of investors, led by principals from Allen & Co., Denver-based St. Charles Capital, Countryside Asset Management Corp. and Vestar Capital Partners. Carrillo declined to say how much the firms invested, but said the funding will allow the company to increase its marketing efforts.
John Moritz, president of Countryside Asset Management Corp. and a Work Options Group boardmember, predicted continued, rapid expansion in the number of companies signing up for Backup Care Options.
"With the investment of this group, it's a well-capitalized company, so what we see for the future is the ability to expand the sales force and get the word out to more potential clients," Moritz said. "There's thousands of companies that can use this product and Work Options Group is in the best position to provide it."
He said the quality of the management team, which includes Carrillo as the founder and visionary and Chris Gatti as the chief executive, together with the existing client base, made Work Options Group attractive as an investment opportunity.
"When you have Microsoft, Ernst and Young, Prudential Financial, AT&T, Time Warner, Verizon Wireless, Merrill Lynch and Princeton University as clients, it leads one to the belief that the product itself is something that is needed," Moritz said. "It's gone through the human resource process of due diligence at these organizations, it's passed that sniff test as something that's needed by many employees."
Michael Franson, a managing director at St. Charles Capital, said he expects to see continued success for Work Options Group in attracting large clients in the short-term future.
"In the long term, we expect to see them going beyond backup childcare," he said.
Work Options says about 90 percent of its work addresses childcare, with the remainder focused on adults.
"Their services started with childcare, but in the future, elder care in going to become a more important part of their backup care program as the population ages and more employees become responsible for the care of their elderly parents," Franson said.
"It's such a unique company offering such a unique service, and the market opportunity is so immense - the combination of those two things combined with a solid management team," to make Work Options Group attractive to investors, he said. "We're really excited about the future potential for Work Options Group."
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