Why Are Companies Abandoning On-Site Day Care?

On any given workday, up to 85 children are running around Patagonia's Ventura, Calif., headquarters. The outdoor retailer offers on-site day care and after-school programs for kids up to 8 years old for its 550 employees. "You cannot miss the children on-site," said Dean Carter, a vice president of human resources at Patagonia. "I hear a kid laughing and playing, and there's something that almost alleviates stress. It just melts off," he said.

Patagonia estimates the program's cost at $1 million a year, even after it collects dues from parents1472842567392 and a $150,000 annual tax deduction. But much like other family-friendly benefits, it has high returns on employee retention and engagement, a point the company hammers home in a new, glossy 400-page book, Family Business: Innovative On-Site Child Care Since 1983. "That was one of the reasons we wrote the book, really setting the business case for it," Carter said.