More Companies Offering On-Site Daycare In Renewed Back-To-Office Push

An increasing number of companies are considering on-site childcare centers as a workplace amenity, in the latest bid to bring workers back to the office.

Employers are taking their lead from the Biden administration’s plan to implement the $53B CHIPS Act for semiconductor manufacturing, which would require chipmakers chasing federal subsidies to ensure access to affordable, high-quality care. Companies across a range of industries are also beginning to explore similar initiatives in spite of cost and liability issues, The Wall Street Journal reports.

Eleven percent of employers across all industries provided on-site daycare between April 2021 and September 2022, according to business network Best Place for Working Parents, double the number of workplaces offering childcare in pre-pandemic years.

The shift is a reaction to seeing parents leave the workforce altogether or go part time during the pandemic as childcare businesses folded, workers quit the profession and employers try to facilitate parents’ return to offices. One-third of the women and one-fifth of the men who left the workforce during the pandemic cited a lack of childcare or its expense, according to a 2022 McKinsey & Co. survey.

“It’s one of our top attraction and retention tools,” Marriott International Vice President of Benefits Judy Fennimore told the WSJ.

Last year, Marriott expanded its childcare offerings at its new global headquarters in Bethesda, Maryland, and encourages its employees to visit their children during the workday and bring them to the company’s café.

Other employers are following suit. Meatpacker Tyson is creating childcare space at its Arkansas headquarters and Tennessee processing plant, while camera and medical equipment manufacturer Olympus added a daycare facility to its Massachusetts office last year, and Eden Health added a designated space in its Boston offices for daycare last summer.

But obstacles remain in place for employers considering the move. Set-up and operating costs for on-site daycare often pencils higher than providing childcare subsidies and opens companies up to potential liabilities, Purdue University Professor of Management Ellen Ernst Kossek told the WSJ. Additionally, a shortage of childcare workers — there are approximately 58,000, 6% fewer than February 2020 — is also a factor.

Local regulations could also come into play in some locales. In Boston, Mayor Michelle Wu signed an executive order over the summer attempting to force office developers with projects reaching 100K SF or more to build on-site daycare or invest in off-site facilities, adding teeth to existing regulation that hadn’t been closely followed.

Those factors are overlapping to create more demand from corporate clients hoping to retain employees and draw working parents back to the office. Facilities draw parents back to the office, said Stephen Kramer, CEO of Bright Horizons, which teams up with companies to design and run on-site childcare.

Parents using workplace-provided daycare facilities “tend to be the earliest adopters of coming back to the office,” he told the WSJ.