Study: Workplace Daycare Can Cut Costs

August 26, 2003 ( - Providing onsite daycare for employees who put in long hours could cut absenteeism by an average 20% and turnover by an average 23%, according to a new report.

A study by consultant Circadian Technologies also showed that workplace daycare centers at companies with “extended hours” employees can also boost recruitment by an average 10%, while at the same time improving worker morale and the company’s image.

“Employer-sponsored child care can produce a measurable return on investment for businesses by improving productivity and customer satisfaction, and by reducing absenteeism, turnover and overtime,” wrote study author Jennifer Allen. “In addition, when employers help increase local availability of child care, especially during extended hours, they benefit the community at large. High-quality childhood education benefits the intellectual development of children. Everybody wins: employers, employees, and children.”

The flip side of the picture, according to Circadian, illustrates the potential costs of absenteeism and turnover, specifically:

  • absenteeism costs $789 per worker per year
  • turnover can cost $25,000 to $50,000 to replace one employee,

According to the study, companies have successfully implemented onsite child care, subsidized offsite child care and backup or ill child care.

The study defined “extended hours” work sites as those that operate outside the boundaries of 7 a.m. to 7 p.m. with employees regularly working nights, on-call shifts, or weekends.

Copies of the study, “Cost Benefits of Child Care for Extended Hours of Operations,” are available at