Childcare as an Economic Development Priority: Best Practices for Businesses

The availability of quality, affordable childcare is more than a family issue; it is increasingly becoming an economic necessity. Across the country, businesses and economic development leaders recognize that a lack of childcare options limits workforce participation, increases turnover, and reduces productivity. When parents can’t find reliable care, they are forced to reduce their hours, miss work, or leave the workforce entirely. These life disruptions can result in a smaller labor pool, making it harder for businesses to recruit and retain talent.

Childcare must be treated as essential infrastructure, just like roads and broadband, to create a thriving economy. By recognizing the value of childcare, business leaders and local stakeholders can work toward creating a culture that uplifts families and attracts high-quality talent.

The following best practices provide actionable solutions for businesses, local leaders, and policymakers seeking to address childcare challenges.

1. Support and Expand Existing Childcare Providers

Building new childcare facilities is important but takes time. A faster solution is to support and expand the capacity of existing providers. Many childcare businesses struggle to access traditional small business resources, even though they function like any other small business. Ensuring they receive support from Small Business Development Centers (SBDCs), Chambers of Commerce, and local economic development organizations can help them scale up.

2. Build Partnerships with Nonprofits and Community Organizations

Nonprofits and economic development agencies can work together to develop strategic solutions. In Kingman, Arizona, for example, community leaders are addressing the childcare shortage by bringing together stakeholders, including workforce development teams and education organizations, to expand licensing support and create scholarship programs.

3. Engage Businesses as Childcare Champions

Employee exit surveys consistently rank childcare challenges among the top three reasons for turnover. According to a recent report from The Place for Working Parents, businesses that provide childcare benefits see a 30% decrease in absences and a 60% reduction in turnover.

Many companies, including JCPenney, Best Buy, and Home Depot, offer childcare benefits such as backup care, flexible spending accounts, and subsidies to help employees manage childcare costs. Others, like Clif Bar and VGM Group, have invested in on-site childcare facilities.

4. Use Business Retention & Expansion (BR&E) Visits to Identify Needs

Childcare challenges often emerge during BR&E visits. In Crawfordsville, Indiana, economic developers learned through these visits that childcare shortages limit workforce participation. Their response led to the creation of an Early Childhood Coalition, the hiring of an Early Learning Director, and the development of a 125-seat childcare facility.

5. Incentivize and Support New Childcare Providers

Encouraging new childcare businesses can help close the gap, but startup costs and regulatory barriers often prevent providers from entering the market. Incentivizing new providers through financial and technical assistance can help meet demand.

6. Advocate for Policy and Funding Solutions

Long-term solutions require policy support and increased funding for childcare programs. Local and state leaders can advocate for expanded childcare subsidies, higher wages for childcare workers, and investments in early education programs.

7. Encourage Public-Private Collaboration

Public-private partnerships can be instrumental in addressing childcare shortages. Businesses, philanthropic organizations, and economic development agencies can work together to establish new facilities, provide scholarships, and improve childcare access. Explore co-op models where businesses and childcare providers pool resources to reduce costs.

Taking the First Step

Addressing childcare shortages is a strategic investment in workforce development and economic growth. Businesses, community leaders, and policymakers must collaborate to implement solutions to ensure families can access affordable childcare.

Communities can strengthen their economies, support working families, and create a more resilient and competitive workforce by taking action. The first step is simple: start the conversation, assess local needs, and explore partnerships that make childcare accessible for all.

Hancock Economic Development Council

The Hancock Economic Development Council is dedicated to empowering businesses of all sizes, fueling growth, and fostering a thriving community. Our unwavering commitment to Hancock County drives us to amplify the voices of our business leaders and shine a spotlight on the inspiring stories that make our County a remarkable place to live and work.

Discover how the HEDC can support your business by reaching out directly—let's work together to build a brighter future for Hancock County.