The Childcare Equation

July 10, 2020

The first five years of life are critical for children to build the strong educational, mental, and emotional foundation upon which future learning is built. The experiences, including access to quality childcare, during these formative years can significantly influence future outcomes. Childcare is important for children, and it is essential for working parents. Parents rely on childcare to help them enter, re-enter, or remain in the workforce. but access to affordable, quality childcare is hard to come by. Now due to the COVID-19 pandemic, families are experiencing additional challenges in finding childcare that meets their needs. The challenges we face are persistent and complex, but solvable, and the business community must be a part of that solution. 

It is no secret that parents dedicate significant energy and resources balancing their roles at home, in the community, and in the workplace. Parents must consider various factors in determining the level and type of childcare solutions that best meet their needs. These factors make up what we’re referring to as the 'Childcare Equation.'

Every piece of the equation is vital to making the whole picture work.

Every piece of the equation is vital to making the whole picture work. This equation results from working parents navigating the following factors: 

  • Their work responsibilities, including their hours, schedule, and employer flexibility;
  • Their home environment, including who in the home might be available to care for young children and their physical proximity to a childcare program;
  • The options in their community, including availability of childcare, potential conflicting schedules with older children attending school; and
  • Their family composition, including the work schedule of a partner, spouse, or extended family member to share caregiving responsibilities.

Of the options within their community, working parents must determine which childcare arrangement best meets their needs. Examples of those arrangements include children staying at home with a parent or guardian, attending a childcare center, attending Pre-K, staying with a nanny or au pair, staying at a licensed home-based program, staying with a family member or friend, attending Head Start or Early Head Start programs, or utilizing any combination of these options to meet full coverage of a working parent’s childcare needs. 

The Childcare Equation for each family is unique to their needs. For example, in our recent reports, Untapped Potential: Economic Impact of Childcare Breakdowns on U.S. States, we found that a significant portion of families with young children utilize multiple sources for childcare, not just external providers. In fact, in our June 2020 Parent Survey (additional data to come), at least 33% of working parents identified that they used multiple providers.  

On average – parents with a child who stayed at home with a parent or guardian pre-COVID indicated that they used this coverage 81% of the time, or roughly 4 out of 5 days a week. Even as the most frequently used solution, the typical working parent in America uses a combination of providers to meet their childcare needs. This combination of care options complicates the Childcare Equation for families and adds another piece to the puzzle that, if changed, results in the need to adjust the entire equation. 

 

Additional Insights from Untapped Potential Research

1 in 4 parents use more than one provider

Of parents that use a childcare center, over 40% also use at least one additional source

About 4/5 of single parents utilize just one provider

Parents making over $50k are slightly more likely to use multiple providers than parents making less than $50k

The Childcare Equation was already hard to get right during a strong economy. The demand for childcare outpaces the supply in most states. Since the outbreak of COVID-19, it has become nearly impossible, as childcare options have been dramatically limited across the United States. Those options have dwindled in both the amount of programs open-  including both home- and center-based childcare - and in the capacity of these programs to care for children due to social distancing. Many of the childcare options parents previously relied on are no longer available.

Because of the pandemic, many states and cities have started to offer additional subsidies for childcare to help working parents access care. These options have been primarily reserved for essential workers, and this approach has likely been impactful for parents who work in the healthcare industry. Our Untapped Potential research showed that healthcare respondents were nearly twice as likely to utilize a childcare center pre-COVID than their non-healthcare peers (27% to 14%). However, this still leaves many families without the support they need. 

Childcare as an Industry

The majority of childcare in this country is offered by small businesses—almost 700,000 businesses who employ 1.5 million employees. There is growing concern for the ability for childcare businesses to weather this storm. Given the financial strain that this crisis has placed on childcare providers, we could see the supply of childcare drop below pre-COVID levels, with up to 4.5 million childcare slots disappearing permanently.  

Pre-pandemic, there were nearly 700,000 small, childcare businesses who employed 1.5 million employees.

On the other hand, if there is a prolonged economic recession, demand for childcare will decrease. Parents who are not employed are much less likely to utilize a childcare center (3%) vs. those parents who are employed (23%).  

Families now face immense pressure to reevaluate their Childcare Equation. Faced with this burden, families are having to make tough decisions regarding their employment situation. As a result, businesses will surely encounter difficulties with their return to work plans, including recruiting and retaining employees. Here we offer a few solutions to consider: 

  • When possible, provide flexible working hours to give parents more agency in their Childcare Equation while promoting continued work and productivity.  
  • Better understand your employees’ Childcare Equations by conducting a quick survey to learn about your working parents’ pre-COVID childcare arrangements. This will help your business anticipate your working parents’ childcare needs as we phase back to work.  
  • Provide a work-from-home stipend for parents to purchase either job-related technology or to purchase childcare materials can help ease the financial burden families are facing. 
  • Provide childcare assistance for working parents. Childcare providers will likely need to raise the cost of care to afford the additional costs of adhering to increase sanitation and lower child-staff ratios.  Assistance should be available for both licensed home- and center-based care as parents need the most flexibility possible and home-based childcare providers may be able to re-open sooner than centers due to their smaller size.  
  • Normalize family-centric behavior during normal work routines. Companies can allow parents to operate within otherwise limited physical or technological constraints. For example, video calls can be difficult to manage for parents who are simultaneously working and caring for children. Some suggestions for making this easier for parents include:  
    • Allowing children or family to be in the picture/background during group video chat 
    • Allowing videos to be off while listening to a meeting and caring for a child 
    • Creating channels that allow for a reduction in meetings/video calls for status updates or team check-ins (including templates, forms, Slack, or Microsoft Teams, that can be completed prior to a meeting that frees up an individual from joining a call/meeting) 
    • Increase the use of optional scheduling, and set parameters for scheduling consecutive meetings (i.e., require 15 to 30 minute breaks between company or team meetings to allow parents to prioritize childcare or address something in the home while balancing work).

These family-centric norms will also benefit those without young children by addressing some stresses many are feeling in our current environment.  

Parents that relied 100 percent on family, friends, or neighbors for childcare may face limited changes, although those changes may vary widely by each family’s circumstances. For the roughly one in four families who relied on grandparents to assist with childcare, they are facing the added dilemma of either having childcare or potentially putting elderly grandparents at risk of exposure. For parents who relied on a childcare center, Head Start program, home-based provider, or other external provider, the childcare options likely require immediate and drastic change.

Given the length and extent of public health and economic changes, external childcare options may not be available for a significant amount of time. Furthermore, childcare providers who survive this crisis and remain in business will operate at limited capacity for some time in order to follow public health guidance. This is not a temporary situation facing families, but rather a new reality. A reality in which families need support from the business community to help meet the dynamic, ever-evolving needs of the Childcare Equation. 

The Chamber Foundation will be exploring these and other scenarios in the coming months as the states slowly begin to reopen and navigate the specific challenges brought by this pandemic. We will seek to understand these challenges from every angle, including the revised Childcare Equations of parents, employer solutions, and childcare provider needs and capacity constraints with new data that is accompanied by the stories behind those numbers.