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A Daycare Center Cherished by Parents—and by a Company

This story is part of a series on IFC’s work to help create markets that give new opportunities to people in developing countries. These innovative approaches have helped solve some of the largest problems in countries or, sometimes, entire regions.

By Inaê Riveras, IFC Communications

BANGALORE, India—Every day is the same routine. Rishit Singh wakes up early, eats his breakfast, and then heads to Mindtree, a technology firm based in the Indian city of Bangalore. Once there, he greets his friends and supervisors then quickly gets on to the business at hand: running toy trains, building castles out of blocks, and herding a menagerie of stuffed animals.

Rishit is two years old. He is one of 90 children attending Mindtree’s daycare center, Little Critters, which the company built within its headquarters to address a slow but deep social transformation taking place in many growing cities in India.

Typically, extended family members here are the ones taking care of young children as their parents go to work. As more young adults leave their places of birth for higher-paying jobs and career opportunities in bigger cities, couples are increasingly depending on external childcare. But the options are limited and the quality is inconsistent. Too often, one parent—usually mom—is forced to quit her job to stay at home with the kids.

This can take a toll on families’ incomes. It also widens the gender gap—with consequences to the country’s economic growth. A recent study shows that if women participated in the Indian economy at the same rate as men, the country could add $2.9 trillion to its GDP by 2025.

But in Bangalore, Mindtree has been able to retain nearly all workers who go on maternity or paternity leave because of children-related benefits including the daycare facility.

Mindtree’s childcare services for workers is one of 10 case studies examined in a new IFC report released today on the benefits businesses gain by investing in childcare. The study also provides guidance to employers on finding a childcare strategy that is right for their business.

For Mindtree Chief Executive Officer Rostow Ravanan, offering daycare facilities makes business sense .

“Women graduate, join the workforce, and when they get married, have a child, we see a big dropout of people in whom we had invested,” Ravanan says. “We needed to bring them back into the workforce post-childbirth and engage them again.”

 

Creating Change

Mindtree decided to look broadly at the problem. One decision was to create a daycare facility. In 2009, it opened a custom-built childcare center that caters to children aged six months to eight years. All employees are eligible to enroll their children at the daycare, and costs are subsidized. Twenty children are on the wait list, and the company is considering expanding the service.

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Retaining workers is especially tricky in high-demand sectors such as information technology, which accounts for more than a third of private sector employment in India. The labor market is highly competitive, and the workforce is young. At Mindtree, the average age range of its 16,500 workers (10,000 of them in Bangalore alone) is 25 to 27 years. Almost a third of them are women.

But the childcare center has yielded positive results to the company—in addition to other progressive policies such as paid maternity and paternity leave, support for breastfeeding mothers, and flexible work options for women returning from maternity leave. Almost all female employees who take maternity leave return to work . Ninety percent of new mothers still work at Mindtree one year after returning from maternity leave, up from 82 percent a few years ago.

Mindtree’s approach helps it retain men as well. One of them is Rishit's father, Vedant Singh. When the baby was 8 months old, he declined a job offer from another company—which did not offer on-site childcare. Staying close to his son, he said, was “non-negotiable.”

“Sometimes when we’re tired of work, we just come (to the daycare) to meet our son and we feel recharged,” says 30-year-old Singh. His wife is also an employee at Mindtree.

 

Beyond Compliance

The IFC study features case studies of businesses in 10 countries. It examines each company’s business rationale for offering childcare, assesses the impact of the benefits on its performance, and reflects on lessons learned in the development of childcare strategies.

The material is especially timely for Indian companies. This year, the government of India passed legislation requiring six months of maternity leave. Companies with more than 50 employees face an additional requirement: they must provide a daycare facility either on site or near the workplace. The government is still working on the guidelines.

Helping companies expand access to high-quality childcare is an important objective for IFC .

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“Our research enables us to explore with different stakeholders the future of childcare-provider markets in different geographies,” says IFC’s gender finance specialist, Roshika Singh. “This opens the door to awareness and discussion.”

The legislation is expected to sharply increase the number of childcare providers, but IFC aims to help companies go beyond compliance and be “the employers of choice,” says Singh. “Our intention is to create a market for quality childcare providers that will open up opportunities for investments.”

For Rishit’s parents—who met in Bangalore while studying—what they see every day at home is indisputable evidence that they’ve made the right decision.

“Our child gets to play, mingle with other children, an opportunity he would not have gotten by staying at home,” says Vedant Singh, proudly. “He’s become more independent. He learned to share, and he learned to fight also. It’s like a blessing.”

Read more about IFC's work to support gender equality, visit www.ifc.org/gender

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Published in September 2017