HINGE Early Education Advisors' 2024 Childcare
Staff Costs Survey highlights the need for government and outside
employer support to keep high-quality programs operating
sustainably
GREENVILLE, S.C., July 15,
2024 /PRNewswire/ -- As part of an ongoing study of
financially stable childcare providers, HINGE Early Education
Advisors — the nation's leading expert in growing and selling
childcare businesses — has released new industry data in its 2024
Childcare Staff Costs Survey. This research summarizes input from
173 leaders of privately owned small and mid-sized childcare
centers across the United
States.
"Since 1990, we have been studying the financial practices that
enable childcare providers to serve communities long term," says
Kathy Ligon, Founder & CEO of
HINGE Advisors. "We speak with hundreds of childcare owners
annually, and over the past several years the challenge of
balancing large increases in staff pay and the limits of what
parents can afford to pay for tuition has put many providers in a
spot where the business model simply doesn't work."
HINGE Advisors' 2024 Childcare Staff Costs Survey reveals:
- 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 HINGE Advisors' 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 Ligon.
"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, Ligon says 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.
Read the full report at
www.hingeadvisors.com/blog/2024-childcare-staff-costs-survey.
About HINGE Early Education Advisors
HINGE Early
Education Advisors is the nation's leading expert in growing and
selling childcare businesses. The HINGE team — comprised of former
childcare business owners, financial experts, and commercial and
real estate brokers — has more than 300 years of combined industry
experience and has closed more school transactions than any advisor
in the nation. Learn more at hingeadvisors.com.
Media Contact:
Pamela
Caruolo
For HINGE Advisors
pamela@caruolocommunications.com
484.574.2946
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SOURCE HINGE Advisors