2024 Childcare Staff Costs Survey Report: Key Findings and Industry Insights from 170+ U.S. Providers
Since 1990, HINGE Early Education Advisors has studied the financial practices that enable childcare providers to serve their communities long term. Speaking with hundreds of childcare business owners annually, we’ve heard first-hand about the challenges of balancing large increases in staff pay with the limits of what parents can afford to pay in tuition — putting many providers in a spot where the business model simply doesn’t work.
Our team surveyed childcare business owners in our network on their experiences with managing staff costs. We received feedback from 173 providers of privately owned small and mid-sized childcare centers across the United States to compile our 2024 Childcare Staff Costs Survey.
Staff Pay Trends
Approximately 60% of respondents report spending more than 50% of all tuition dollars on staff pay alone.
Note: This does not include other significant costs like payroll taxes, benefits, training, and recruiting.
Historically, staff pay typically comprises 42-48% of tuition on average in a normalized environment.
Two-thirds of childcare centers report staff pay rate increases of 21-50% since 2020/COVID.
Strategies Used to Manage Staff Costs
Childcare leaders are keeping a close eye on how they manage payroll. The most common strategies reported include:
Monitoring staff (46%)
Letting staff go home early when they are not needed (25%)
Monitoring pay rates (19%)
Using other cost-saving strategies (10%)
Other approaches include:
Using floaters
Using assistant team members effectively
Providing more support for Directors
Limiting management teams in the classroom
Childcare Expenses Beyond Staff Costs
According to our industry benchmarks, beyond staff costs, the complete expense load for childcare owners also includes approximately:
12-15% of all tuition dollars paid going to program costs, such as food, supplies, advertising, vehicles, and dues and licenses
22-25% of all tuition dollars paid going to facility costs, such as rent or mortgage, repairs and maintenance, janitorial, security, insurance, property taxes, and utilities
3-5% of all tuition dollars paid going to administrative costs, such as bank and ACH or credit card fees, billing systems, office supplies, travel, and Internet
Why These Numbers Matter
“These costs don’t account for reinvesting in the business, which is essential for running a sustainable program,” says Kathy Ligon, Founder & CEO of HINGE Advisors. “We all want managers, teachers, and support staff to be paid well, have excellent benefits, have fun work environments with advancement opportunities and love coming to work. We also want parents to be comfortable financially and for children to receive the high-quality care and learning they deserve. But if the childcare business model breaks down, there is no care or opportunity for anyone.”
The Call for Support
This data reflects what many in the early education sector have long known — the current financial structure of the childcare industry is under pressure. The report highlights the growing need for:
Government subsidies
Tax incentives
Support from outside employers
These interventions are vital to meeting the demands for high-quality childcare.
Access the Full Report
You can view and download the full 2024 Childcare Staff Costs Survey report below. For more information, or to learn more about HINGE’s financial benchmarks, reach out to our team at info@hingeadvisors.com.