Benefits are one of those topics that scares childcare providers. Why? Typically, in my experience, they are thought of as expensive, hard to figure out, and complicated.
Generally, that’s true. Certain types of benefits can be cost prohibitive. Sometimes, staff say they don’t want or need them because they have them through partners or public programs. And, if you don’t have a subject matter expert on your team to help you navigate the options, they can be difficult to figure out. And yes, the complexity scares people away from trying to figure it out.
So, let’s put some guardrails around what benefits are to demystify why they’re important. Hopefully this helps reduce the uncertainty and opens some other options.
The Continuum of Everything
When I began working with early care and education (ECE) business owners and operators in 2014, I needed providers to explain what curriculum in ECE is. As the son of educators, I had a general understanding but as it related to ECE, I didn’t know what was included.
As I’ve learned, the spectrum of options parents have to choose from includes programs from Kindergarten-readiness to Waldorf, to Reggio, to Montessori, to Outdoor and Forest Schools, and more.
To tie the curriculum options to benefits, think of benefits as a suite of options or what I call the ‘Continuum of Everything.’ It is a lot like selecting from a choice of cars. Everything from a hooptie to a Porsche is available…a piece of junk to a luxury mark.
This is where folks get stuck. When choosing benefits to add, you don’t have to buy a Porsche, just like you don’t have to do Montessori curriculum or a full-blown outdoor school. Knowing options is great. But not all of them need to be chosen.
What are my Options?
For those aware of ECE business assessment tools like Program Administration Scale (PAS) and Business Administration Scale (BAS), let’s turn to these tools to illuminate the options and the continuum of complexity and cost.
In BAS-2 for Family Child Care programs, benefits are addressed in Item 2 – Income and Benefits. Strands 2 and 3 categorize benefits as paid holidays, paid time off, health insurance, retirement plans, and disability income insurance.
PAS-3 for Centers addresses benefits under the Personnel Cost and Allocation Subscale, Item 5. All five strands categorize benefits as health insurance, paid holidays, paid time off, retirement plans, and professional development.
As I look at those options, I see simple to complex.
Simple to Complex
To lay the benefits options from PAS and BAS out into a continuum or spectrum, here’s how I see them — from simple to complex — and based on low to high financial investment.
- Professional development (PD)
- Providers know licensing rules require teachers to participate in 16 hours of PD per year. However, if PD is presented in a way that makes employees feel supported to advance in their careers, this can be a benefit not only a box to check.
- Financial support, freedom to pursue their own options, job-embedded practices, and other management strategies ensure that supporting an employee’s career advancement is a benefit.
- PAS-3, Item 3, for example goes into significant detail of what this benefit option could look like as a business practice. BAS-2, Item 10, Strand 2 does as well.
- Paid time off (PTO)
- PAS and BAS both recommend providers build annual calendars and tuition around a minimum of six paid holidays per year aligning with typical federal holidays.
- BAS-2, Item 2 recommends additional PTO for employees and/or the provider up to or above an additional 10 PTO days per year. PAS-3, Item 5 goes even further pushing PTO options up to 27 or more days per year in the first year of employment and to a minimum 32 PTO days after a fifth year.
- Certainly, there are budgetary concerns that should be planned for, but this could also simply mean changing variables in the formula used to calculate tuition. Managing PTO is also an administrative challenge that goes hand in hand with ratios and scheduling classroom coverage.
- Retirement
- In terms of ease and cost, in my experience, creating an opportunity for employees (and owner/operators) to invest in their retirement is relatively straight forward.
- Depending on the type of retirement plan, these can include financial match, or not.
- I believe planning for an individual’s financial future is one of the most important things employers can do to show appreciation. The longer people invest in mutual funds, individual retirement accounts, or other retirement vehicles, the happier and more secure they’ll be as they age. Long-term returns in retirement investments average 8-12% over 10 years and money doubles every seven years. Early, often, and consistency are the rules. They will love you for this as they age.
- Health
- There are a variety of ways to provide health care for employees. Everything from Telehealth, to paying health stipends, to health reimbursement accounts, to Vision/Dental, to supplemental coverage, to major medical.
- All of them have financial and administrative complexity. So, if you don’t know, the best approach is to engage with a qualified subject matter expert. This could be as simple as contacting your existing insurance carrier or an insurance broker to start the discussion, figuring out your budget, and going from there.
Conclusion
Why is the consideration of offering benefits to ECE workers increasingly important? Well, as an ECE business owner once told me: “If you can’t staff your business, you can’t do your business.”
We know accessing teachers to provide care has become increasingly difficult in the 2020s. To compete for talent, businesses of all stripes are increasing compensation and improving the work environment. Benefits are typically third on the list, but we need to start somewhere.
Then there is this fun data point.
According to the U.S. Census’ 2020 Demographic and Housing Characteristics data, the number of one-person households in the U.S. has increased sharply every decade since the 1940s. One-person households account for nearly one out of every three people. More than half the counties in Montana fall into that category, with some data suggesting that one out of every two households are solo dwellers.
The point is that if your business doesn’t offer benefits of some kind, you’re likely shrinking your talent pool.
Our advice is to start simply. Invest in your people and they’re more likely to be happier working for you and serving your families.
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Jason Nitschke is Zero to Five Montana and Montana Child Care Business Connect’s Senior Child Care Business Advisor. He is a nationally recognized economic development professional and former business owner.
Montana Child Care Business Connect is funded under a contract with the Montana Department of Public Health and Human Services. The statements herein do not necessarily reflect the opinion of the department.
