August 16, 2016

100% Of New Moms Return to Work At Patagonia After Childbirth. Here’s Why.

What do the United States and Papua New Guinea have in common? They’re the only two industrialized nations without federal paid family leave.

In fact, here in the U.S. just 11% of workers receive paid family leave and only three states — California, New Jersey, and Rhode Island — offer it statewide.

Patagonia ain’t about that…

Therefore, the clothing company not only offers paid maternity and paternity leave, but goes above and beyond by providing on-site childcare for all employees, too.

It’s something Patagonia has done for 33 years, and even in times of economic struggle, the program was never cut.

And according to current CEO Rose Marcario, not only is that because it’s the right thing to do, but on-site child care actually pays for itself… making it a total win-win.

How the benefits outweigh the cost

First and foremost, there are tax benefits, most notably the $150k yearly tax credit the federal government grants all qualified childcare programs.

Add in a permitted 35% deduction of unrecovered costs, and Patagonia’s child care center — which costs about $1m to run — actually only costs $500k (35% of $1m = $350k + $150k = $500k) out of pocket.

On-site child care can also lead to reduced turnover costs, which is huge, considering how much money it costs to recruit, relocate, and train new employees.

While nearly a third of working mothers in the U.S. who give birth never return to their previous job, 100% of moms have returned to work at Patagonia over the past 5 years.

Overall…

Marcario estimates the company recovers 91% of its costs annually by providing childcare. And that’s just the quantifiable number.

Add in higher employee engagement (which leads to better performance), greater loyalty, and more women in management, and it’s no wonder Marcario is so high on this strategy.

As she puts it, “Taking care of our tribe is part of our culture and our commitment to helping our own people live the way they want. It’s true, there are financial costs… but the benefits pay for themselves every year.”

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