Office creche clause in maternity benefit bill may divide the big and the small | Mint
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Business News/ Companies / News/  Office creche clause in maternity benefit bill may divide the big and the small

Office creche clause in maternity benefit bill may divide the big and the small

Maternity benefit bill says employers failing to provide creches could attract a one-year jail term and/or a fine. Smaller companies may struggle to provide the facilities

When Bharti Airtel moved to a new office in Gurugram in 2010, building a crèche was part of the original design. Photo: Priyanka Parashar/MintPremium
When Bharti Airtel moved to a new office in Gurugram in 2010, building a crèche was part of the original design. Photo: Priyanka Parashar/Mint

New Delhi: Toys, slides and animal motifs could soon be on their way to workplaces along with a happy gaggle of kids, with a new law designed to support young mothers in India close to taking effect.

Companies with 50 or more workers must set up crèches within office premises under the Maternity Benefit (Amendment) Bill, 2016, passed by the Rajya Sabha last week, that aims to stop women from leaving jobs to care for babies.

The idea of workplace crèches is somewhat recent in India. Says Sridevi Raghavan, co-founder and chief executive officer of Amelio, a Chennai-based start-up that provides onsite daycare facility for private companies, “We are the first generation of childcare/day care users. The idea of childcare was (that it was) something parents or grandparents do. Even though there is some hesitation, more and more families and companies are opting for it now."

The bill is gender-neutral, in the sense that it will also allow fathers to take their children to the crèche, if it’s far from the mother’s workplace. The crèche can be set up in the establishment’s premises or two or more firms within 500 metres can pool their resources and create a community crèche.

The rise of the middle class, higher female participation in the workforce, emergence of nuclear two-income families and the information and technology boom in the country have led to the expansion of this unorganized industry sector, including specialized early learning centres (ELCs), crèches, pre-school and other daycare facilities, offering services for a few hours to the entire day.

Under the new law, employers failing to provide the facility could attract a one-year jail term and/or a fine. A labour officer will be assigned to ensure compliance with the provisions under the bill.

However, even before the law has taken effect, several private firms have already come up with crèches.

“In terms of return on investment (ROI), it is very compelling. You are stacking up costs - there is the opportunity cost and the one-time cost of setting up the centre. There is savings in terms of retention, you save on the rehiring costs, you also have lower absenteeism," says Raghavan, who has set up six onsite centres in Chennai and Bengaluru.

When Bharti Airtel Ltd moved to a new office in Gurugram in 2010, building a crèche was part of the original design. The building has 3,000 workers, of which 600 are women. The crèche, which started off with 25 children aged 6 months to 3 years, now has children up to 5 years. The cost of the crèche is shared by the employee and the employer. The parent pays less than 10,000 per month for the crèche. “This has worked very well for us. The ROI for us has been high," says Srikant Balachandran, global chief, human resources officer of Bharti Airtel.

Many companies don’t build a crèche themselves, but outsource the job to professional daycare centres. Companies like Accenture, HCL Technologies Ltd, General Electric Co., Pepsico India Holdings Pvt. Ltd, Airtel, Flipkart Ltd, Godrej Industries Ltd, L’Oreal India Pvt. Ltd, Johnson and Johnson, Genpact Ltd and Hindustan Unilever Ltd are among companies that have ensured crèches.

HCL started its crèche in 2012. “Our philosophy is that forward looking and employee-centric practices trigger a virtuous cycle - better retention, better word of mouth, better attraction of talent, and better engagement at work. The fact that over 98% of women who proceed on maternity leave resume work and go on to continue their career journey with us serves as good mirror on the wall each time we look at the impact of our policies and programs," an HCL spokesperson said.

In fact, Swedish furniture giant Ikea, which will launch its first store in India in 2017, has already announced that it will open crèches at all its 25 planned stores in India to make it easier for female employees to cope with tough job timings.

The company plans to hire around 7,500 women employees at its stores in India by 2025.

PepsiCo’s new office in Gurgaon will house a crèche facility over 1200 sq. ft, primarily to take care of children between 6 months and 3 years. “We are committed to building a culture that offers our women employees opportunities to build their careers," says Suchitra Rajendra, vice-president, human resources, India region, PepsiCo.

There are concerns as well. As Chandrajit Banerjee, CEO of People Plus, a recruitment consultancy, says, “There is going to be a divide between the big and the small companies. I don’t think this will impact the bigger companies. The challenge will be for the Small and Medium sized Enterprises (SME). It wouldn’t make economic sense to them."

But Raghavan says the fundamental concern with most companies is liability. “They are worried about welfare of so many children in the office. This is where the need of good daycare centres comes up," she says. She says money-wise, the investment isn’t huge. “(The space and money to be spent will be decided) looking at the number of women working in a particular company and then narrowing it down to those who have children in the age group that need crèches. So, what we are looking at is just, say, 2,500 sq. ft of space. If you look at the fraction of the entire real estate of the company, this area is very small. It is workable," she says.

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Published: 16 Aug 2016, 07:58 PM IST
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