Bringing home into work

by 01 Nov 2006

Onsite childcare would be the holy grail of benefits for many employees with children. As Meg Mason writes, there are also numerous business benefits for providing childcare in the workplace

When the new Parliament House was built on Capital Hill in the 1980s, the planners thought to include every possibly amenity in the $1.1 billion complex. A swimming pool, a squash court, cafes, a post office and parking for 2,000 cars – everything necessary to sustain life, unless of course your life includes children. There may be 4,500 rooms, but not one of them was set aside for childcare.

True, in the 1980s, few MPs were female and even fewer had children. But that has changed. The childcare situation hasn’t, despite a couple of high profile demonstrations of just how necessary onsite childcare has become: the state MP Kirstie Marshall made national news when she was asked to leave the chamber in 2003 after attempting to breastfeed her newborn there, while the one-time sports and tourism minister, Jackie Kelly, voluntarily returned to the backbench, unable to balance the pressures of Parliament and two small children.

Of course, Parliament House is far from being the only large organisation that doesn’t offer onsite childcare. In fact, according to a 2004 Equal Opportunity for Women in the Workplace Agency (EOWA) survey, just 3 per cent of 1,744 companies provide onsite childcare facilities. An alarming 68 per cent provided no formal or informal childcare support at all.

And yet, as far as family friendly initiatives go, many employees with children would consider onsite childcare centre the holy grail. Shorter commutes, more flexibility, enhanced concentration knowing children are close by, more rapid return to work when breastfeeding can be maintained – the list is unending.

Business benefits

But more importantly to HR executives attempting to sell the idea of onsite childcare to the board, are its demonstrable benefits to the company. And they are demonstrable. According to recent surveys by the US-based National Centre for Childcare Information, 85 per cent of employers stated that providing childcare improved employee recruitment, with a third of working families willing to change employers or sacrifice other benefits and salary to access family friendly programs that better suit their needs.

Two-thirds of employees found that childcare services reduced turnover by as much as 60 per cent depending on what type of services they offered. Some 54 per cent of employers said onsite care reduced absenteeism by around 30 percent. Productivity was also impacted, with nearly half of all employers reporting increase when childcare was offered.

ExxonMobil was one of the first companies in Australia to look seriously at the question of work-based childcare, establishing their own centre five minutes walk from its Southbank headquarters in Melbourne 13 years ago. The centre now operates as a joint partner program with Shell and BP, who are also based there.

ExxonMobils experience

Patti McNulty, ExxonMobil’s HR director, says that while Shell and BP are technically competitors, they had similar childcare needs and thinking in terms of the way they want the centre run and the philosophy and aims of the centre. “All the moons lined up in terms of our childcare needs, and it is working well.”

Each partner determines its own costing and payment structure for parents, one running on a no-cost to the company basis. For ExxonMobil, the choice was made to run at a not-for-profit basis, and allow parents to pay fees with pre-tax dollars.

“Our parents can access the facility via salary sacrifice and the company provides a subsidy, as well as an annual contribution to support capital works and the ongoing costs of the centre,” says McNulty.

“And although we do have to operate a fairly healthy wait list, our daily rates are not as high as private providers and the quality is excellent. Staff keep coming back and back and particularly senior women have told me, had they not had that option, they wouldn’t be with the organisation now. It’s a very strong attractor.”

Measuring the degree to which the centre enhances staff attraction is difficult for HR but, luckily, McNulty says the department has never had to defend the cost to the board. “The benefits of the centre have never been questioned. It is just our culture, so we don’t put any kind of bounty or KPIs on it – it is just what we do.”

Even if not strictly quantifiable, the benefits are plain to see. “The key driver in setting it up was to attract women coming back into the workplace, given the cost and demand for childcare in the private sector. And we’ve seen women who have their first child stay and send their second and third child, because of the priority access scheme we operate for siblings, and we’ve seen some very strong retention go with that,” she says.

“For the women in this department, a couple have had babies and been very apprehensive about returning to work but then the children have come and had a great experience at the centre and been happy with the staff, and so the mothers have been able to focus and pick up where they left off.”

And it isn’t just mothers. Half of the children attending ExxonMobil’s centre travel in with their father, which suggests that the onsite facility helps parents share the responsibility of care between themselves, according to McNulty.

Needed at National Australia Bank

National Australia Bank, meanwhile, is in the process of rolling out a series of new day care facilities, in response to the success of its Treetops centre, onsite at its North Sydney headquarters. According to Ilona Charles, NAB’s general manager of workplace relations, childcare is at the forefront of the bank’s family friendly program, raised frequently by staff as one of their main work-life requirements.

“We have a number of surveys we run internally, measuring employee engagement, and when we have measured demand for childcare the response has been huge. In Melbourne CBD, we had something like 700 children who would attend centres, and similar figures in Sydney, so we’re working with a number of providers and searching for new sites,” Charles says.

Finding appropriate locations in congested central business districts is one of the greatest challenges to the bank, but funding the operations is surprisingly straightforward. “We can open a centre at no cost,”Charles says, “because setup costs are born by the provider,” an external company like KU Children’s Services, which also operates ExxonMobil’s facility. The bank holds the head lease on the site so that staff can still qualify for the Fringe Benefit Tax exemption, and then the bank subsidises fees and allows salary sacrifice to bring daily rates down for parents.

When the decision was made to begin rolling out more centres in Melbourne and possibly Brisbane, HR was required to illustrate its merits to the board. “We did have to put forward our rationale and demonstrate ROI, but retention is the main thing there,” Charles says.

“The cost of recruiting and re-recruiting are just so enormous that it is really self-evident as to why we need to respond to childcare needs. From the organisation’s perspective, it is just one of the ways of retaining key people across all levels of the business, not just senior people, and make life a little bit easier for them.”

Profitability

Onsite childcare certainly does not have to be expensive, according to Bowdoin College micro-economist Rachel Connelly, whose research and subsequent book, Kids At Work: The Value of Employer-Sponsored Onsite Child Care Centres, has shown that work-based day care can actually be profitable for the company. Connelly based her research on three manufacturing companies with around 600 employees each, two of which offered onsite day care. Staff were primarily blue-collar shift workers with few other day care options. The two companies with day care straight away recorded wage savings of between $150,000 and $250,000 a year because staff would work for less when day care was provided. But on top of that, the study showed that even employees without children considered the facility such a major workplace benefit they showed willingness to pay up to $225 per year from their own salaries to subsidise the centre, so great is its perceived impact on profitability, productivity and absenteeism.

Of the study, Connelly said: “I was impressed with the near universality of positive feeling workers showed about working for a company that had a childcare centre. They liked the idea that their company took care of the person who worked down the row from them. Economists generally don’t want to hear about people caring about each other. But it shouldn’t be so surprising that people who work with each other for five or more years should care about each other and that that actually translates into economic behaviour – if the opportunity exists, to say you are willing to pay a little something to have this benefit for all employees.”

Cheaper options

While onsite childcare may not be feasible for many smaller companies, there are a host of other care options employers can consider, according to Anna McPhee, director of the Equal Opportunities for Women in the Workplace Agency (EOWA). Cheaper than establishing an onsite centre is leasing an existing centre, so that employees can still claim the Fringe Benefit Tax exemption, or if the company isn't big enough, buying a number of permanent places at an existing private centre nearby.

For emergency care, consider offering a room in the building where parents can bring a sick child and still access a computer and do a full day's work. One company that has caught the attention of the EOWA offers childcare to women attending job interviews: “It can be very difficult for a woman who hasn't started working yet, and who hasn't set up childcare, to attend an interview at short notice, but this employer, a hospitality company, recognises that a lot of its potential employees will have children,” McPhee says.

Conference care is also important for women with small children who don't want to miss out on training and development but who can't travel without children. “The main thing is companies should talk to their staff, see what they need, offer a suite of initiatives because there is no one-size-fits-all solution,” she says.

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