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Vivian Manasc, right, principal at Manasc Isaac Architects, speaks with employee Tiffany Collinge at the firm’s Edmonton offices.

JASON FRANSON/The Globe and Mail

Each week, we seek expert advice to help a small or medium-sized business overcome a key issue.

With six babies and another on the way, Manasc Isaac Architects has experienced a mini-baby boom this year. So members of the staff of 55 suggested adding an on-site daycare so they could enjoy their children at lunch and during breaks. They pointed out that an at-work solution would allow for more pick-up and drop-off flexibility than at other facilities, too.

Vivian Manasc, principal and architect in the Edmonton firm, says that having employees' children on-site could help attract and retain talented people.

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"Offering daycare facilities for our employees would allow us to better accommodate the growing families that make up our team," says Ms. Manasc. "Both moms and dads want to return to work – and we want them back."

One challenge is that the firm doesn't have the space for such a facility. Its specialty happens to be the creation of creative and sustainable buildings, however, so Ms. Manasc envisioned a modular, mobile "playhouse" with net-zero energy consumption. It would require the space of two parking stalls, plus an adjacent outdoor play area, and would operate on the Reggio Emilia approach to early childhood education, focusing on gymnastics and art. One strategy for staffing might include parents taking turns at the facility.

"We've designed many daycare facilities, so we are familiar with the operational challenges, as well as the licensing and insurance issues," says Ms. Manasc. "That's the fun of architecture – working within the rules and creating innovative solutions."

She estimates the cost of designing and completing a prototype at $100,000. If her firm can come up with the cash, and once the Playhouse is up and running, she says they will market it to companies to lease on a monthly or yearly basis.

"It's an affordable, well-scaled solution to the question of small-business childcare that could help other organizations boost employee retention and happiness," says Ms. Manasc. "The only thing we're missing is the funding. Once we find that, the rest is doable."

Many small businesses would like to provide their employees with a daycare but would likely say that running one isn't among their core strengths. However, Ms. Manasc is confident that any details can be sorted out later. "We are a very flexible and creative team and will create a solution once the facility is in place."

The Challenge: Should Manasc Isaac Architects embark on this new line of business? More broadly, is it financially smart for small businesses to host their own daycares?

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THE EXPERTS WEIGH IN

Pat Frouws, executive director of the child-care provider Simon Fraser University Childcare Society, Vancouver

SFU heavily subsidizes our child care, but our fees are still quite high. It's difficult to run a child care funded solely by parent fees. We can do a good job because the subsidy from SFU is almost half a million dollars. That includes utilities, insurance, my salary and for one office assistant. They also provide in-kind support, with our facilities, maintenance and IT services. Our buildings are rent-free.

Parents pay about 72 to 75 per cent of the total cost of child care. Fees are more than $1,200 a month for infant/toddler care five days a week. We can keep it to the market rate because so much is subsidized. Our budget right now is about $3.5-million (for 283 child care spaces). If we lost the SFU support, it would be unaffordable for parents to have the quality of child care we offer. For private daycare, you'd probably have to pay $1,400 to $1,600 a month.

We had architects design our buildings, which are designed for the age of the child who inhabits them, and each has its own outdoor space. When you think about businesses getting on-site childcare, they tend to go to a private operator or what we call big box. Because there are shareholders, they tend to cut back on quality. Children deserve grass and greenery and nature. There should be thought and intent in the space for the people inhabiting it.

But capital is just the beginning. People think they can build it and it will run, but the operations are costly without in-kind support from somewhere else. There's very little government funding. The firm would have to look at providing a long-term subsidy because the parent fees aren't going to cover the costs.

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Quality is something they need to pay attention to. If it went really poorly, that would reflect back on them. They should keep that in mind if it's attached to their business.

Victoria Sopik, co-founder, Kids and Company Ltd., a child-care provider with more than 70 centres across Canada and the U.S., Toronto

It's a terrific idea that Vivian wants to have child care close to help attract and retain her talent. Everyone wants to have an employer who cares about them that much. It sends a great message to their team.

On-site child care is a great benefit, but our research shows that often parents don't want it. The reason is that many who live some distance from their offices don't want to travel with a crying baby during rush hour. But more importantly, it usually limits the driving to one parent and doesn't allow for staying late for a project. What we found to be more successful was having child care close to where people lived. That way mum might drop off the child while dad picks up on the way home.

Also most employers want to be hands-off from a liability perspective. They want us in between as the experts with our multi-million-dollar insurance policy behind us.

It sounds like a nice idea to have employees go in and teach, but they may not do it in a way that other parents appreciate. Can you imagine how tough it would be if you're not happy with how your boss or employee handled a certain situation? Then you have to turn around and go work with them.

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Is it financially smart to run your own on-site daycare? If they're a highly profitable company and were going to run it at a loss, or close to that, it could potentially work. But they'd lose a lot of money by having to staff it appropriately.

Patricia MacLean, director of communications and marketing, Ericsson Canada Inc., a provider of wireless network equipment, Mississauga

We chose to offer on-site daycare starting in 1997 because we were expanding quite quickly and our key demographics were young engineers, so we saw a need for our employees. The daycare now has 65 children. It's run independently by a parent committee in conjunction with the company's daycare director. Parents pay part of the cost.

Having an on-site daycare reduces turnover, since employees have convenience and peace of mind when it comes to child care. It also helps us attract potential employees in the demographic zone that we are looking at, which is 25- to 30-year-olds, and differentiates us from our competitors.

Companies must also realize, however, that you may have to provide a long-term subsidy because the parent fees aren't going to cover the costs of quality daycare.

THREE THINGS THE COMPANY COULD DO NOW

Think about costs

It might be more expensive for you and other small businesses to run a daycare than you think.

Reconsider using staff as minders

Doing so could put co-workers in uncomfortable situations with their peers.

Consider your demographic

If you are looking for employees in the "baby zone," having a daycare could set you apart from the competition.

Facing a challenge? If your company could use expert help, please contact us at smallbusiness@globeandmail.com.

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Interviews have been edited and condensed.

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