INSIST: Make On-Site Child Care Pay for Itself

Research showing the business benefits of paid family and medical leave and other critical programs is abundant. For now, though, let me illustrate the basic math that gives me confidence as Patagonia’s chief executive not only to provide on-site child care to our parents at our headquarters, but, as of this year, to expand it to our 400-employee distribution center in Reno, Nevada, as well.

By Rose Marcario - Fast Company

To support our families, Patagonia provides company-paid health care and sick time for all employees; paid maternity and paternity leave; access to on-site child care for employees at our headquarters in Ventura, California, and at our Reno, Nevada, distribution center; and financial support to those who need it, among other benefits. In particular, offering on-site child care, we believe, is the right thing to do for employees, working parents, and the life of the workplace.

However, a reasonable businessperson might ask, "What does it cost?" It’s expensive if you offer high-quality care and subsidize your employees’ tuition—but not as expensive as you’d think.

Child Care Isn't Just A "Nice To Have"

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% of U.S. workers.

To date, three states and the District of Columbia offer paid family leave: California, New Jersey, and Rhode Island. The United States is one of only two countries in the industrialized world that offers no federal paid maternity leave. And every day in America, most women return to work after the birth of a child to find an unsupportive environment lacking on-site child care, lactation programs, and paid medical leave.

We don’t have to scratch our heads and wonder why there's an alarming lack of women in 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, though, is something I've learned firsthand: Supporting our working families isn’t just the ethical thing to do (which, frankly, should be reason enough for responsible leaders); it will also balance out financially.

Research showing the business benefits of paid family and medical leave and other critical programs is abundant. For now, though, let me illustrate the basic math that gives me confidence as Patagonia’s chief executive not only to provide on-site child care to our parents at our headquarters, but, as of this year, to expand it to our 400-employee distribution center in Reno, Nevada, as well.

Tax Benefits

Costs recouped: 50%

The federal government recognizes the value of on-site child care to both working parents and the economy, and grants a qualified child-care program a yearly tax credit of $150,000. In addition, the government allows a company to deduct 35% of its unrecovered costs from its corporate tax bite.

To date, costs after revenues (tuition fees) for running Patagonia’s child development center are approximately $1 million. With a yearly tax deduction of $150,000 and a second deduction of 35% of costs (35% of $1 million = $350,000), that’s a total of $500,000 in costs recouped, or 50%. READ MORE

Photo Credit: Philippe Petit/Paris Match via Getty Images