More Companies Find on-Site Day Care Pays Off in Profits, Employee Relations : Workplace: Employees say it’s one reason they’ll stay with a firm. Employers are discovering the benefits, and they’re not just at the bottom line.


It saved a California bank at least $138,000 in one year. A bank in Virginia says it greatly increased employees’ willingness to work overtime and reduced tardiness. And a North Carolina software company credits it with reducing employee turnover to just 15 percent of the industry average.

All these companies offer on-site day care for employees’ children. Industry analysts point out that day-care referral services and financial assistance provided by employer-sponsored flexible spending accounts and vouchers are also effective ways of raising the productivity and lowering the stress of working parents while providing bottom-line value to the employer.

Companies that have taken the plunge and established on-site day-care centers rave about the employee response, and though few have conducted a cost-benefit analysis, those that do say they have noticed bottom-line benefits.


A cost-savings study of Union Bank’s on-site child-care center in Monterey Park, Calif., showed that the bank saved between $138,000 and $232,000 during 1987, the first year of the center’s operation. The savings came primarily from reduced turnover and absenteeism, and shortened maternity leaves. The bank, which had 1,200 employees at the time of the study, provided $105,000 in operating support to the center that year, in addition to the total start-up cost of $430,000 for the center, which has places for 64 children.

Employee retention has been another positive result. At Dominion Bankshares, a Roanoke, Va.-based bank holding company with offices in Maryland and Washington, a 1987 survey one year after establishment of a day-care center at its headquarters showed that 48 percent of the workers said the center was a factor in their decision to stay at Dominion.

SAS Institute Inc., a producer of computer software products in Cary, N.C., established its day-care center in 1981, during a period when the computer-industry employee turnover rate hit 32%. Last year, when turnover in the industry averaged 28%, SAS kept its down to just 4%.

“In the ‘90s, employers will be bidding for the best people and will use the benefit package as a tool. Child care is now a part of that package,” says John Musto, a Pennsylvania consultant.

The need to attract and retain employees is expected to become more critical as the year 2000 approaches. By then, the U.S. Department of Labor predicts, women will account for 47% of the labor force.

A three-year study by the National Council of Jewish Women’s Center for the Child in New York found that women were 9% more likely to return to their jobs after childbirth if their employer offered some type of child-care support.

Supervisors at SAS also noted increased productivity from parents who know their children are in a safe place. The children have lunch in the company cafeteria, and parents have the option of eating with them, company spokeswoman Lynne Donges said.