Employers use onsite daycare to attract employees

When Lieutenant Jonathan Lowe drops his twin toddlers off at the San Diego Police Department’s on-site day care, he can expect to receive no less than three pictures of them throughout the day. Sometimes they’re napping. Other times, they’re painting or playing on the playground.

Lowe benefits from the country’s first on-site day care service for a police department. About five years ago, an officer with young kids started lobbying for the idea. It came to fruition early last year. 

Employers such as Qualtrics, Johnson & Johnson, Cisco and the San Diego Police Department all offer day care services at the office as a benefit to employees. The hope is that this will attract talent and keep them there. 

Not being able to find someone they can afford and trust to take care of their kids is something many parents, particularly mothers, struggle with at work. This issue has been exacerbated by the recession and pandemic with 91,000 licensed child care spaces closing during the recession, and a third of the remaining child care spaces closing at least temporarily in 2020, according to California’s Master Plan for Early Learning and Care. 

While the plan encourages broader action regarding creating more child care sites, it also recognizes the role employers can play in offering child care services. “Employers have typically established child care facilities when a shortage affects their workforce or as a tool to recruit and retain employees with particular skills,” the report reads. 

One company that contracts day care services, whether at the office or in the more traditional child care center, is KinderCare. The company provides 13 companies with on-site day care services in California, sometimes with a separate building that is attached to the office, including the San Diego Police Department.

“You could go down and have lunch with your child,” said Dan Figurski, brand president for KinderCare for Employers, which has offered on-site services since 1992. “You might be able to go down and breastfeed your child if you’re a working mother. It was really convenient.”

KinderCare also works with 90 other companies in the state, where the employer offers to subsidize child care expenses at an off site KinderCare center. The employer could subsidize it anywhere from 10% to 90%. 

Lowe spends about $860 per month for each kid to attend three days of child care. That’s  half the market price of a regular KinderCare site, he was told. 

“If we didn’t have KinderCare, we would be paying for a nanny and using my in-laws,” Lowe said. 

The child care centers can be customized to the employer. For example, KinderCare’s on-site service works specifically with the San Diego Police Department, offering longer hours, 5 a.m. to 7 p.m., than a typical day care service. They were also open during the holidays this year.

“In general, affordable child care is difficult,” Lowe said. “But when you’re talking about a profession where we do shift work, we work on weekends, we work on holidays, it’s especially difficult for families to be able to find child care that’s available and open at certain times.”

On-site day cares have mainly been limited to large businesses, public agencies, universities, and hospitals, according to the master plan. Typically, you see on-site care at places where income is higher, said Anna Powell, a senior research and policy associate at UC Berkeley’s Center for the Study of Child Care Employment.

On-site services can also put child care at the whims of an employer. Many employers have decided to close these centers, since they’re expensive to maintain, she said. 

“Employers are interested (because) they understand that it’s of interest to their employees … but they can change their mind and we’ve seen this happen a number of times,” Powell said. “In terms of a long-term solution, that seems like a real risk.”

Employers also don’t receive any public funding or other incentives to offer child care, said Dario Valles, a visiting scholar at UCLA’s labor center, who researches child care workers in California.

“Child care is one of the most expensive costs that parents have to cover,” he said. “The cost of child care can rival that of college tuition. It’s a huge incentive for an employer to recruit and retain their workforce, but there’s little support on the backend to maintain a sustainable program.”

He pointed to Cal State Long Beach, which offered on-site care. It made sense for the university, particularly since students could work at the center as part of their training to be child care workers. However, when the university decided to close the site for renovation, parents who used the service were left without child care for 18 months.

Powell recommends that employers offer to subsidize child care costs instead of providing an on-site service. “It’s true they can take the benefit away, but the difference is that the program doesn’t close,” she said. “The parent just now resumes paying for it. Because every time a program closes and workers leave, there’s a reduction in the availability of care, as opposed to how it’s paid for.”

Financial support for this story was provided by the Smidt Foundation and The James Irvine Foundation.