Published: Oct 28, 2016 6:04 a.m. ET
Though expensive to run, companies say they pay off in employee morale and retention

By
RACHEL FEINTZEIG
One of the largest day-care centers in Atlanta has more than 66,000 square feet of outdoor and indoor space, including three playgrounds, basketball courts and a water play area.

To enroll their children, parents must meet one big requirement: work for Home Depot Inc. HD, -0.75%

The retail giant reasoned that putting a child-care facility on its corporate campus — where working parents can be steps away from their children — would ease the strain of juggling work and family. And Home Depot isn’t alone: Companies like outdoor outfitter Patagonia Inc. and energy-bar maker Clif Bar & Co. have also invested in on-site child care.

The programs can be complicated and costly to run, part of the reason only 4% of employers offer a child-care center near or on-site, according to the Society for Human Resource Management. But bosses say the investment pays off and keeps women in the workforce.
At Patagonia, of Ventura, Calif., parents eat lunch with their preschoolers and breast-feed infants during meetings. Eighty-one children, from 8 weeks to 8 years of age, attend programs at the company’s headquarters, and 10 spend their days in classrooms that opened in the company’s Reno, Nev., facilities in January. Patagonia runs the program itself, a task that required hiring a 28-person staff and spending about $1 million a year.

“It’s a line item that would be really easy to cut if you just saw it on a single Excel spreadsheet,” says Dean Carter, the company’s head of human resources. But Patagonia estimates it recovers 91% of costs annually, because of tax credits, increased employee engagement and low staff turnover. Parents with children in the program have been 25% less likely than the average Patagonia employee to leave over the past five years. And 100% of mothers have returned to work after maternity leave over the same period.

Help in the workplace
Child care has long been a critical issue for working mothers. Women shoulder more of the burden at home, according to data from LeanIn.Org and McKinsey & Co. More than a third of women surveyed said they do more when it comes to housework and child care than their spouses, while only 7% of men said their share was greater.

Ken Matos, the vice president of research for consulting, coaching and research firm Life Meets Work, says women face pressure to be both ideal workers and ideal mothers. On-site child care is one way to “bridge those identities without stigma,” he says.

To be sure, child care isn’t a single-gender issue. On-site centers can be a powerful benefit for fathers, too, say executives and researchers.

“More and more dads are intimately involved in these decisions [around child care] and struggling with them as well,” says Erin Kelly, a professor at the Massachusetts Institute of Technology’s Sloan School of Management who has studied employers’ family policies and benefits.

Yet the struggle to balance work and home remains more pronounced for many women, and sometimes leads mothers to leave the workforce. At Burns & McDonnell, an engineering, construction, architecture and consulting firm based in Kansas City, Mo., women make up about 25% of the 5,400-person workforce. Chief Executive Greg Graves says that the company found itself losing mothers who wanted to stay home with their children.

“We need to work harder to convince these moms that they can have both,” Graves says. “They can have great careers and still be terrific parents.”

The company in May opened a 20,000-square-foot child-care center featuring a nearly 8-foot-long Lite-Brite-like picture-building toy, lab coats for children to don during science-themed activities and a nearby peanut-free kitchen. Prices aren’t subsidized — full-time care for an infant costs parents nearly $1,400 a month. But Graves hopes the center — which cost the company more than $2 million to build — will help the company reach its goal of a workforce that’s one-third female. Currently, just under half of the 144 spots in the center are filled.

The corporate hurdles
Lots of hurdles have kept on-site care from becoming widespread. Executives say it can be challenging to predict enrollment in corporate child-care centers. Many worry about children’s safety and compliance issues. Upfront costs and real estate constraints also deter many companies. Plus, researchers note that employer-sponsored child care isn’t always the answer to talent issues facing a company — often simpler, cheaper fixes like flexible work options can do just as well to attract and retain parents.

Bright Horizons Family Solutions, BFAM, -0.07% a provider of child-care services based in Watertown, Mass., operates 464 company-sponsored centers, including Burns’s, up from 389 in 2011. But the company’s less-expensive offerings, like backup care, are growing more rapidly, according to CEO Dave Lissy.

“There are costs associated with it,” Lissy says of on-site care. Companies “have to become believers that there’s a good return on investment, and that’s a process for many companies.”

The benefit can be “really sticky” for companies looking to increase retention, Lissy says. At Clif Bar, 98% of employee parents whose children attend the company day care said they were more likely to stay working for the firm because of the center, according to a survey conducted by the company that runs the child-care center.

“It was a huge relief,” Kate Torgersen, a Clif Bar senior communications manager, says of the chance to enroll her children in the 6,700-square-foot center. Torgersen estimates that she has trimmed two hours from her day by not having to do a separate child-care drop-off for two of her children — a third recently moved on to kindergarten — leaving more time for work.

Home Depot, which currently has 264 children enrolled in its program, believes on-site child care is a “competitive advantage,” says Arlette Guthrie, a vice president for human resources at the company. Candidates ask about it during interviews, and parents who join the company and sign up gain “peace of mind” that leads to better performance.

“Our associates can only do their best work when their home life is taken care of,” she says.

Rachel Feintzeig is a Wall Street Journal reporter in New York. Email her at rachel.feintzeig@wsj.com.

The story “The case for day care at the office” first appeared on WSJ.com.