Five Tips to Start Childcare in Companies

March 4, 2020

By Rudaba Zehra Nasir and Bhattiprolu B. Murti

Millions of women across the world forgo employment or leave their jobs because of a key hurdle: lack of access to childcare. This has a ripple effect—companies lose talent, households lose income, and economies lose growth.

The losses can be staggering, with one study estimating unpaid care work by women at $10 trillion, or 13 percent of global GDP. Access to childcare not only boosts job opportunities for women, it also improves physical and cognitive outcomes for children. In addition, companies can realize multiple benefits: reduced absenteeism, improved profits and productivity, and increased employee retention—especially women who want to return after maternity leave.

Following years of research and experience working with companies and international organizations such as the International Labour Organization and various United Nations agencies, we offer five tips to companies interested in providing childcare for their employees.

1. Understand the costs and benefits

Before taking any steps, build internal buy-in by engaging senior leadership; analyze the benefits of offering childcare; research the needs of employees; and evaluate the resources you will need for the program.

Our research suggests that one of the main reasons employees take unplanned leave or resign is because of a lack of formal childcare options. When childcare is available, both female and male employees are less likely to take unplanned leave and are motivated to remain in their jobs.

The cost of training new employees to replace those who have left can be prohibitive. Vietnamese textile company Nalt Enterprise, for example, estimated that the costs of replacing and training a new recruit represented around 85 percent of the annual salary of one employee. Nalt, which was featured in Stop-Winlock’s Tackling Childcare report, found staff turnover fell by one third after it started a childcare program for its employees.

You may also decide to offer childcare to build your reputation as a family-friendly employer—helping raise the profile of your company and increasing awareness about the subject.

2. Don’t forget local regulations

You will need to research local laws and regulations before proceeding. Twenty-six economies have policies mandating that companies provide childcare, including Bangladesh, Brazil, Cambodia, India, Jordan, and Ukraine.

In all countries, legal requirements may include the need for acquiring license and registration, maintaining health and safety standards, and understanding liability and insurance issues. Some governments offer tax and nontax benefits as incentives to parents, employers, and stand-alone childcare centers to promote childcare services.

If there are no local childcare standards, you can draw from international guidance, including those in the recently unveiled guide developed by IFC in partnership with more than 30 institutions, such as private and public sector organizations and international groups.

3. You have many options

To build the best childcare option for employees, hold surveys, focus groups, or interviews to determine how much they are willing to pay, who would be eligible to participate, and the hours of operation. You could also research the market to explore various childcare options that are already available.

One successful way to create a childcare program is to develop a Theory of Change: first identify what the ideal program would look like, and then work backward to identify the conditions necessary to reach that goal.

Working this way, companies can choose the childcare option they want and then pilot it. If a company has multiple offices, it can pilot a program in one location before launching it at other offices. 

Employers can choose from several options ranging from less to more resource intensive. You have more options than just on-site daycare: you can create consortiums with other employers, make arrangements with outside care providers, or partner with the government. These options can be combined with other family-friendly benefits such as paid leave, flexible work hours, and breastfeeding support.

4. Experts can help

After you have settled on a solution, engage with public or private sector experts that you have identified in your research—you do not have to do it alone.

Also, companies that have successfully implemented childcare have one thing in common: they either assign a department or form a task force to lead the program. A single group will be able to focus better on the program and can be held accountable for the work.

For the task force’s work to proceed smoothly, it is crucial that those involved in the childcare plan communicate about the progress or obstacles with employees and senior managers.

5. Monitor the results

Once your company has implemented a childcare program, you will need to regularly monitor and evaluate its impact. That gives you an opportunity to adjust the program, if needed.

Companies can do this by gathering feedback from parents, monitoring children’s progress, and measuring the benefits accrued to the company, whether through reduced absenteeism, increased employee retention, or enhanced productivity.

You should also consider communicating the results externally to inspire other companies.

If you have doubts about the task ahead of you, it’s not unusual. Murtaza Ahmed, Director of Artistic Milliners, a Pakistan-based garment-manufacturing company, also had a few concerns.

“I was very apprehensive about opening the childcare center, as I was concerned about safety and liability issues,” he said. “But since the launch of our first childcare center in Karachi, it has been a great journey—our employees love it and it’s good for our business. The company, an IFC advisory client, plans to open another center soon.

As our experience shows, companies succeed when they see childcare as an investment opportunity to strengthen their human capital and expand their business. It’s good for business—and good for children, families, societies, and economies.

Published in March 2020