Taking ‘Care’ Out of Day Care at Google Talking Business

By Joe Nocera

In early May, Google held a series of secret focus groups with employees who had children in day care facilities at the company. The purpose was to gauge their reaction to a company plan to raise the amount it charged for in-house day care by 75 percent.

For infants, whose parents had been paying less than $1,500 a month, the cost would rise to more than $2,500, well above the market rate. For toddlers and preschoolers, whose parents were charged less, the price increases were equally eye-popping. Parents with two kids in Google day care would likely see their annual day care bill grow to almost $60,000 from around $35,000.

At the first of the three focus groups, parents wept openly. As the word spread, the Google parents began to fight back. They came up with ideas to save money, used the company’s TGIF sessions – a weekly forum for employees to bring concerns to management – to plead their case, and conducted surveys showing that most parents with children in Google day care would have to find less expensive options.

Do you think you know how this story ends? You’re probably guessing that because it involves “do no evil” Google, Fortune magazine’s “Best Company to Work For” in the past two years, this is a heartwarming tale of a good company reversing a dumb decision.

If only. Although Google is rolling back its price increase slightly – to 69 percent instead of the original 75 percent – and is phasing in the higher price over five quarters, the outline of the original decision remains largely unchanged. At a TGIF in June, Sergey Brin, who founded Google with Larry Page, said he had no sympathy for the parents and was tired of “Googlers” who felt entitled to perks like “bottled water and M&Ms,” according to several people in the meeting. On Monday, Google began to implement the first phase of its new day care plan, letting go of the outsourcing firm that had been handling one of its facilities.

Google first began offering day care three and a half years ago, and perhaps it is only coincidence that this occurred not long after a woman named Susan Wojcicki returned to the company from maternity leave. Wojcicki is a figure of significant stature at Google; hers was the garage that Brin and Page rented while starting up Google. Today she serves as company’s vice president of product management, though as I discovered in talking to unhappy Google parents this week, not many Googlers seem to know what she does for the company. Everybody, however, knows that she is Brin’s multimillionaire sister- in-law.

From the start, Wojcicki has been a passionate advocate for Google’s day care efforts, though there is some dispute about how much decision-making authority she has.

Google plays down her role, although the parents I spoke to – none of whom would be quoted by name, fearing they would be fired – said that the company’s day care approach is aligned with her views.

Its first facility, called the Kinderplex, was run by the Children’s Creative Learning Centers, or CCLC, which according to its Web site offers “learning in a play-based, developmentally appropriate environment that incorporates a variety of activities and multicultural aspects in a thematic style.” One of its other Silicon Valley clients, Electronic Arts, sent me a statement telling me how happy it has been with CCLC.

According to Google, there were numerous complains about CCLC, but the Google parents I spoke to disagree. They say that at the Kinderplex, the teacher-child ratios were low, the teachers were first-rate, the facility was clean and upbeat, and the food – organic, naturally – was terrific.

But at least one parent was not happy: Wojcicki. She is a proponent of Reggio Emilia, a preschool philosophy that stresses the ability of even small children to chart their own learning path, and emphasizes the use of natural materials whenever possible. It is the hot philosophy of the moment.

A year after the Kinderplex started, Google opened its second day care center, the Woods, which Google ran itself. The Woods was an expensive undertaking; in terms of the space per child, the aesthetic beauty of its toys and the college degrees of its teachers, it put the Kinderplex to shame. It also utilized the Reggio Emilia philosophy.

With the Woods open, Google now had 200 day care spots and was promoting this new perk as a recruiting tool. Meanwhile, the company was growing like crazy, its young employees were growing up and starting to have babies, and well, you can just picture what happened next. The wait list ballooned insanely, finally reaching more than 700 people. New employees who arrived at Google thinking they were getting in-house day care were stunned to discover that it could take up to two years to land a coveted spot.

Meanwhile, someone at Google woke up one day and realized that the company was subsidizing each child to the tune of $39,000 a year. Although Google won’t break down the numbers, it seems clear that most of the subsidy came from the Woods. Nonetheless, Google’s executive management group decided that the way to solve the dual problems of a too-long wait list and a too-large subsidy was – are you sitting down for this? – to get rid of CCLC and make the Kinderplex more like the Woods! (Google says it was always planning to replace CCLC.) Given that decision, the only possible way to reduce the subsidy was to raise prices through the roof.

When I spoke to Laszlo Bock, the company vice president for people operations, aka human resources, he told me that “what is really driving the cost is we essentially focus on really high quality.” Google can’t just have low ratios: it has to have the lowest of anybody. Its teachers have to be the best. Its toys have to be the most advanced. If it costs a lot of money to provide The Greatest Day Care on Earth, well, that’s life.

Google has also started charging people several hundreds dollars to stay on the waiting list; as a result the list had dropped to around 300 parents. By next fall, Google plans to open new facilities with another – ta da! – 300 places. See? No more waiting list.

Google, I should note, disagrees with the way I tell this story. The company points out that the prices are lower than originally planned, that it is expanding its day care operation, that its facilities will be state-of-the-art, and that it will be giving scholarships to parents who can’t afford to keep their children in Google day care. The company also says that employees will have to show proof of household income to qualify.

But here is the real problem: providing day care is not an economics experiment, nor should it be just another Google perk, alongside organic food and free candy. As the technology blog Valleywag noted recently, the company no longer advertises day care as an employee benefit. That’s the real shame.

Google may be providing the greatest day care ever, but so what? It doesn’t matter how good the day care is if only its wealthiest employees can afford it. If Google really wanted to do something about its day care crisis, it would have spent less time creating its super-duper day care centers, and more time figuring out how to “scale” day care for everybody, no matter what their salaries.

Instead, Google has shown that it thinks about day care the same way every other company does. If day care is the judge, that’s just what Google is fast becoming: just another company.

Originally published by The New York Times Media Group.

(c) 2008 International Herald Tribune. Provided by ProQuest Information and Learning. All rights Reserved.