Why Should Employers Care About Families?
The poet Maya Angelou said, “When you know better, you do better.” But despite everything we know about the tangible and intangible benefits of taking care of our working families, collectively, we American business leaders provide paid family leave to just 11 percent of U.S. workers.
Up to 35 percent of working women in the United States who give birth never return to their jobs. And those who do return to work after the birth of a child find an unsupportive environment lacking on-site child care, lactation programs and paid medical leave.
Given these realities, we don’t have to scratch our heads and wonder why there is an alarming lack of women in positions of leadership, boardrooms and public office. Women will never be able to effectively “lean in” without the proper economic, social and community support for the most critical work of all: raising the next generation.
The good news for skeptical business leaders: Supporting our working families with on-site child care isn’t just the ethical thing to do (which, frankly, should be all we need if we are to be responsible leaders), it will also balance out financially.
At Patagonia, we’ve operated an on-site child development center at our headquarters in Ventura, California, for 33 years. For our founders, it just seemed like the right thing to do back when the company was just starting out. Our employees, in turn, give more to the company because it acts as a partner in life, not an obstacle.
As Patagonia has grown significantly, especially in recent years, our on-site child care program has continued to play a major role in driving our success. We enjoy the sound of kids playing around our campus, and the math nets out, too—making my decision last year to expand on-site child care to our 400-employee distribution center in Reno, Nevada, a no-brainer.
As Patagonia’s chief executive, here’s how I think about it:
Tax Benefits—Costs Recouped: 50%
The federal government recognizes the value of on-site child care to both working parents and the economy. Qualified child care programs are granted a yearly tax credit of $150,000. In addition, the government allows a company to deduct 35 percent of unrecovered costs from its corporate tax bite.
Employee Retention—Costs Recouped: 30%
Turnover is expensive. It includes lost productivity while the position is vacant plus recruitment, relocation and training time. This can range from 35 percent of the annual salary for a non-managerial employee to 125 percent of the salary for a manager to a couple of years’ pay for a director or vice president.
At Patagonia, for the past five years, we’ve seen 100 percent of moms return to work after maternity leave. The availability of on-site child care remains important for allowing mothers to breastfeed infants on demand. For the past five years, our turnover rate for parents who have children in the program has run 25 percent less than for our general employee population.
Employee Engagement—Costs Recouped: 11%
The term engagement describes how an employee feels about his or her job and employer. Higher engagement creates higher levels of customer satisfaction and business performance. Studies indicate that when parents have access to high-quality, on-site child care at work, they are more engaged—even more so than colleagues as a whole—and that increased engagement means the company does better financially.
Bottom Line—Costs Recouped: 91%
In sum, we estimate that 91 percent of our calculable costs are recovered annually, and we’re not alone. JPMorgan Chase Bank, N.A. has estimated returns of 115 percent for its child care program and global business consultant KPMG found that its clients with on-site child care earned a return on investment (ROI) of 125 percent.
Of course, this quantifiable picture leaves out the obvious intangible benefits of providing on-site child care: more women in management (at Patagonia, women make up 50 percent of our workforce, including 50 percent of upper management positions), greater employee loyalty, stronger workplace culture and more. If we could quantify these positive impacts, an overall ROI of 115-125 percent on our own program wouldn’t surprise me.
I’ve been fortunate to see these benefits firsthand, and I strongly believe the business community should feel confident in taking the leap and adopting on-site child care and other policies that support working families, not just because it’s the right thing to do, but because your business will find greater financial success too.
To help share our story, Patagonia has just published a new book, called Family Business, designed to help employers, child development practitioners and others take advantage of everything we’ve learned over the last 33 years. I encourage you to check it out, or follow up with a wide variety of additional resources that are available to understand the benefits of on-site child care.
This article first appeared on LinkedIn.