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There is a single lady, working in your organization, and she has requested for the day care centre for her child at the workplace. As an HR manager what will be your response? If you accept her request, then why and how will you manage it?

This question sounds like a homework assignment, but we are always happy to help readers who are students in the HR field.

An onsite daycare center is a benefit that a few top employers offer. It can greatly improve employee morale. However, it can be expensive. Employers should not take on responsibility for children lightly.

A daycare center needs at least 20 to 30 children per day in order to be financially viable. At a minimum, the daycare center would require 3 employees, including a director with state certification (in most areas.) So, unless there are many other employees who also want their children to attend the onsite daycare center, it doesn’t make financial sense for the employer to offer this benefit.

(In general, in the HR world, benefits are determined by the employer, not the employee.)

The employer must also consider whether there is enough room onsite for a daycare center, including space to prepare healthy meals and for the children to play outdoors. A seperate facility might need to be built. Safe playground equipment would need to be provided. If children of different ages would attend, they need separate rooms for toddlers, babies, and older children. There is significant liability involved in operating a daycare center, so the employer would have to complete background checks on employees and would need additional insurance.

Employers who start a daycare center in the workplace should be committed for the long term. An employer who had to close the daycare center after one year would risk making workers more angry than if the center never opened at all.

If the employer decided to provide onsite daycare, the best option might be to outsource it to an existing franchise daycare operation, such as KinderCare.

A better option might be to offer employees a partial credit for daycare costs, or a flexible spending account.

A popular option is a flexible spending account (FSA) that allows workers to pay for daycare with pre-tax dollars. Employees without children could use the money to pay for medical expenses or care for elderly parents. Many FSAs are set up with debit cards, so the employee doesn’t have to wait to be reimbursed. (And this is probably the answer your professor is looking for.)

Employees should be aware that in some cases, the savings on their income taxes is greater when itemizing deductions and taking a tax credit for child care, rather than using an FSA.

Another option might be to allow the employee to work from home, depending upon her job duties. However, employers should be aware that this could set a precedent, and they might need to let employees without children work from home, as well.