Ethical AND financially viable? So why aren’t more organisations taking the measures to support working families?
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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 per cent of U.S. workers.
Up to 35 per cent 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 programmes, 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.
Supporting Families Makes Financial Sense
And the good news for skeptical business leaders? Supporting our working families with onsite 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 onsite child development center at our headquarters in Ventura, Calif., for 33 years. For our founders, it just seemed like the right thing to do back when the company was just starting out. And 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 programme has continued to play a major role in driving our success. We enjoy the sound of kids playing around our campus, and 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 per cent
The federal government recognises the value of on-site child care to both working parents and the economy. It grants a qualified child care program a yearly tax credit of $150,000.
In addition, the government allows a company to deduct 35 per cent of its unrecovered costs from its corporate tax bite.
Employee Retention – Costs Recouped: 30 per cent
Turnover is expensive – including lost productivity while the position is vacant, plus recruitment, relocation, and training time. This can range from 35 per cent of annual salary for a non-managerial employee, to 125 per cent of salary for a manager. And to a couple of years’ pay for a director or vice president.
At Patagonia, for the past five years, we’ve seen 100 per cent of mums return to work after maternity leave. The availability of on-site child care remains important for allowing mothers to breast-feed infants on demand.
For the past five years, our turnover rate for parents who have children in the program has run 25 per cent less than for our general employee population.
Employee Engagement – Costs Recouped: 11 per cent
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. This increased engagement means the company does better financially.
Bottom Line – Costs Recouped: 91 per cent
In sum, we estimate that we recover 91 per cent of our calculable costs annually. We’re not alone. JP Morgan Chase Bank, N.A., has estimated returns of 115 per cent for its child-care programme.
And global business consultant KPMG found that its clients with onsite child-care earned a return on investment (ROI) of 125 per cent.
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 per cent of our workforce, including 50 per cent 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 per cent on our own programme 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 onsite 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 33 years.
I encourage you to check it out. Or follow up with a wide variety of additional resources available to understand the benefits of on-site child care.
Rose Marcario is the CEO of Patagonia. This article was orginally published on LinkedIn.
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