2024 Childcare Staff Costs Survey Report
Since 1990, HINGE 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.
Recently, 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. Here’s what our 2024 Childcare Staff Costs Survey found…
Approximately 60% of respondents report spending more than 50% of all tuition dollars on staff pay. This does not include other significant costs like payroll taxes, benefits, training, and recruiting. In a normalized environment, HINGE’s historical data shows childcare staff pay on average comprises 42-48% of all tuition dollars paid.
Staff pay rates have increased 21-50% since 2020/COVID at more than two-thirds of childcare centers.
Childcare leaders primarily manage staff costs by monitoring hours (46%), allowing staff to go home early when they are not needed in the classroom (25%), monitoring pay rates (19%), and using other strategies (10%).
Additional strategies for managing staff costs include using floaters, using assistant team members effectively, providing more support for Directors, and limiting management teams in the classroom.
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
“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.”
Echoing the call of many childcare advocates, this data points to the need for additional assistance for the childcare industry — such as government subsidies, tax incentives, and support from outside employers — in order to meet the demands for high-quality childcare.
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 benchmark, reach out to our team at info@hingeadvisors.com.