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Childcare support by employer

The business case for employer-supported childcare

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A new report by International Finance Corporation (IFC) discusses how companies can analyse their workforce to identify the type of childcare support they can offer to their employees — from on-site childcare to subsidies — that best suits their needs.

The report draws on 10 case studies of companies around the world offering various childcare options, highlights of which are provided below:

  • Recruitment: Offering childcare support can improve the quality of applicants and the speed at which vacancies can be filled. It helps Akamai in the United States and Mindtree in India to recruit and retain highly qualified software engineers, enables Borusan in Turkey to work toward building a gender-diverse workforce in a mostly male-dominated heavy manufacturing industry, allows companies such as Schön Klinik Neustadt in Germany to recruit staff for their 24/7 operations, and helps MAS Kreeda Al Safi-Madaba and Martur recruit women in locations where it is uncommon for mothers to enter formal employment.

  • Retention: Textile producer Nalt Enterprise in Vietnam estimates that it costs 85% of a factory worker’s annual salary to replace that worker. Offering childcare at Nalt reduced staff turnover by one third. Similarly, car component producer Martur in Turkey estimates that it takes eight months for a new production worker to become fully productive. In Martur’s team-centered environment, a new employee’s lower productivity reduces the productivity of the whole line. At Martur, offering childcare-related benefits reduced staff turnover by approximately 15%. The Bank of Tokyo-Mitsubishi UFJ, Ltd. in Japan realised a more than four-fold increase in the retention of new mothers and saved an estimated 5,000 million Japanese yen ($45 million) in employee turnover related costs by offering initiatives such as extended maternity leave.

  • Productivity gains: At MAS Kreeda Al Safi-Madaba, absences due to sick leave fell by 9% in the first nine months after a workplace crèche was opened. By enabling its employees to work through childcare crises, Akamai more than recoups the costs of its back-up care benefits. Farm employees at Afrifresh in South Africa have reported greater peace of mind and ability to focus on their work knowing that their children are out of harm’s way and cared for in the company’s on-site crèche. A plant manager at Pandurata Alimentos Ltda. (Bauducco) in Brazil has noted that childcare benefits have led to a reduction in accident rates as employees are more focused and at ease knowing that their children are safe.

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