child care

Which tech company offers the best child care?

October 14, 2013: 12:35 PM ET

Which tech companies offer the best child care services? Hint: Not one with many women at the top.

By Jennifer Alsever

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FORTUNE -- Facebook's recently announced plans for a sprawling $120 million housing community near its Menlo Park campus will include affordable employee homes and a laundry list of amenities like a pub, convenience store, bicycle repair shop, hair stylist -- even a doggy day care. One perk missing from that list: daycare for kids.

The tech giant is not in the minority. Bay Area companies often plan expansive offices with gyms, kitchens, game rooms, and other lavish perks to attract and retain the brightest workers. But onsite child care centers rarely make the list of amenities. Only 7% of companies nationwide offer on-site daycare to employees, according to a 2012 National Study of Employers, a percentage that has stayed held since 2005. Meanwhile about one-third of Fortune's Best Companies to Work For list offer the convenience to parents with young kids.

Facebook (FB) and local developer St. Anton Partners designed the 394-unit housing project with feedback from employees in focus groups. St. Anton is building the project, while Facebook will subsidize just 15 units set aside for employees to meet state requirements for affordable housing.

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Despite the lack of child care, a Facebook spokeswoman says the company offers plenty of other cushy perks to parents. Couples who give birth or adopt get $4,000 in "baby cash," and the company also gives generous four-month maternity and paternity leave to all employees. She would not say whether child care is a benefit planned for the future. "We offer a number of benefits to make our employees' lives better, and we are constantly evaluating potential new offerings," she says.

While some companies have found cost savings with improved productivity and lower absenteeism, on-site child care does not typically hit the top of the HR agenda -- especially in a weak labor market, says Rachel Connelly, a Bowdoin College economics professor and co-author of the book, Kids at Work: The Value of Employer-Sponsored On-Site Child Care Centers.

There's the cost: A 10,000-square-foot on-site center that can handle 100 kids might cost $1.7 million to $2 million to build, according to Reed Construction Data, which tracks building statistics. Then there's the added challenge of state regulations, liability risks, and operational costs, says Jennifer Sabatini Fraone, associate director of the Boston College Center for Work & Family, which studies work life balance issues.

"It's more complicated than hiring a few babysitters," she says. "It's difficult to develop a sound business case for them because the ROI often can be nebulous."

Many companies outsource the job to professional daycare centers. But even so, if a company's daycare doesn't have enough spots to fill employee demand, it can frustrate workers, adds Connelly. "So it's either 'go big' or nothing," says Connelly, "and a lot of them choose nothing."

Instead, says Fraone, many companies offer dependent care assistance plans that help parents pay for child care with pre-tax dollars or access to referral services like Care.com, which helps parents find pre-screened providers.

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Google (GOOG) and Cisco (CSCO) are among the few big tech firms that offer on-campus child care. Cisco has two centers on its San Jose, Calif., campus, and Google has four centers specifically for "Googler kids" near its Mountain View headquarters.

Google, which topped Fortune's Best Companies to Work For list this year, touts a "family first" philosophy, offering new moms five-month paid maternity leave, $500 in baby cash, preferred parking spots -- even high chairs in all its company cafes. That's in addition to the long list of other employee perks like subsidized massages and a seven-acre sports complex.

Santa Clara, Calif.-based Intel (INTC), meanwhile, has taken a different route to help out parents with young kids. To avoid the cost of building child care centers on each of its main campuses, Intel partnered with 17 local child care centers across the U.S. that are close to its offices. In exchange for Intel support and funding, those child care centers give admission priority to children of Intel employees and offer slots for backup daycare.

"Child care is one of the most intense things that new parents worry about," says Intel spokeswoman Gail Dundas. "To know Intel has vetted these child care centers and engaged with them makes a difference. It helps you make decisions."

At Yahoo (YHOO), CEO Marissa Mayer decided this year to extend the paid leave time for new parents -- a move implemented not long after she took heat for revoking the company's telecommuting policy. Now new moms get 16 weeks of paid leave, and dads get eight. New parents also get $500 to spend on baby-related items. Like Facebook, Yahoo has no plans for an on-site child care facility.

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