Offering Daycare Services to Employees: Great for Morale, or Just Too Costly?

daycareThe cost of childcare can be cost prohibitive for parents, especially when working a full-time job at the same time. Some employers offer in-house daycare services as an added benefit, which can help reduce turnover and absenteeism, while increasing morale and productivity among employees with children.

A report published in Bloomberg Businessweek found that childcare issues lead the ranks for causing family-related problems in the workplace, leading to shortened work days among the 80 percent of companies surveyed. In this article, we’ll take a look at the pros and cons of setting up an in-house daycare program for your employees to use.

There’s no doubt that offering on-site child care is a great benefit for employees, but it doesn’t come without added expense for the business.

Benefits of In-House Daycare Services In-house daycare can make all the difference for your employees with children. Some parents avoid working altogether because the cost of daycare can be more than they bring in on a monthly basis, making it pointless for parents to take on the added responsibility and stress that come with a full-time job.

For employees, in-house daycare means less stress and worry about their children’s well-being, and more focus and concentration on work. For employers, on-site daycare reduces the amount of family-related absenteeism, keeps employee morale high, and helps attract and retain talent.

A survey conducted by Bright Horizons found that 23 percent of employees turned down job change offers and refrained from perusing other employment options due to the fact that their employer offered on-site childcare services. As an employer, you also get the added benefit of showing your employees that you care about both them and their families.

The same report published by BusinessWeek found that even employees without young children would be willing to help subsidize the annual cost of child care by contributing, on average, $125 to $225 per year, just to keep employee morale high and increase productivity.

Cons of On-Site Child Care Services Both the initial setup and operating costs of an on-site daycare program can be a burden to smaller companies. Not only do you have to provide all the necessary tools to run a daycare efficiently, you also have to consider the cost of hiring additional employees to run the program. Of course, the operating costs may vary depending on the number of employees that take advantage of the program.

Consider the total expense of operating a daycare center, including hard assets, additional salaries, and state licensing requirements. In addition to purchasing the required materials, like cribs, to run a daycare, you’ll also have to meet your state’s licensing requirements as a daycare provider. This includes initial and continuing education for your employees who work directly with the children. Most companies are not in the business of running a childcare facility, so you’ll have to consider how much time, effort, and money you’d want to put into such a program.

An article published by Forbes estimates that the average cost per child in a daycare program is $300 to $400, just for hard assets alone. You’ll have to consider the additional salaries, start-up costs, and day to day operating expenses that comes with running this type of program.

Consider Alternatives Opening and operating a full in-house daycare center for your employees may be out of reach for most small businesses, but there are other benefits you can offer to help attract and retain employees with children. Think about offering flexible work schedules to accommodate families with children, paid maternity leave for both mothers and fathers, and access to better health coverage.

If you can’t afford to run a daycare program on your own, think about contributing to the cost your employees have to pay as an added benefit. There’s no doubt that offering an on-site childcare center is a great way to increase employee moral and productivity, but the costs of operating such a program can make it restrictive for smaller businesses. If you can’t afford or don’t want to run a childcare program, think about added benefits you can give to your employees to help offset the costs.

Brian Flax is a freelance writer based out of the Washington, D.C., area. He is experienced in a variety of topics including education, technology, and business management.