Increasing Revenues, But Not Effectiveness As the composition of American households continue to diversify – more single-parent families, two parents pursuing career advancement and larger ethnic representation –, children’s day care services are critical to the country’s economic and family life. The industry has been growing at a 2.5% annual compound rate, including through 2016, with approximately 2,000 additional for-profit businesses during the past year while non-profit facilities have remained the same, at approximately 21,000. Despite the growth and importance of children’s day care services, only 70% of 4-year-olds in the US are enrolled in preschool, compared to 80% in Canada, most European countries, Japan, Australia, New Zealand and others.

Ready for a Birth Spurt? Since the recent peak in US births of 4.3 million during 2007 (today’s 3rd-graders), the birthrate has declined 7% every year; however, the 3.98 million births during 2014 was the first increase since 2007, signaling a coming need for more day care facilities. These 2014 babies will be the projected 4.29 million 3-year olds of 2017, or 6.9% more than 2013; the projected 4.3 million 4-year olds of 2018, or 7.7% more than 2013; and the projected 4.31 million 5- year olds of 2019, or 4.6% more than 2013. By 2030, there will be 10.883 million boys and 10.346 million girls younger than 5 years of age in the US, a 6.7% and 6.1% increase, respectively, compared to 2015.

Women and Mothers in the US Labor Force According to US Bureau of Labor Statistics projections, the total US labor force is forecast to increase 7.9% from 2014 to 2024, or an average annual rate of +0.5%, primarily because of aging Baby Boomers leaving the labor force in huge numbers. The rate of women joining the US labor force will be lower during this 10-year period, compared to 2004– 2014, but it will be more than men, resulting in women’s share of the labor force increasing from 46.8% for 2014 to 47.2% by 2024. Another major factor is that the share of 55+ adults will increase an average of 1.8% per year, 3 times faster than the entire labor force. The rate of increase for those 25–54 will be just 0.4% per year, but they will account for almost 64% of all US workers.

Employer Participation and Support A 2015 report clearly makes the case for the value of childcare for employers: During a 6-month period, 45% of parents missed work an average of 4.3 days and 65% of their work schedules were adversely affected because of childcare issues. Among a number of family-friendly policies from the “best companies” according to Working Mother magazine, 96% provided a childcare resource and referral service and 89% backup childcare, compared to less than 10% of the majority of US companies. Of the childcare assistance from US employers, Dependent Care Assistance Plans (DCAP) that help employees pay for childcare with pre-tax dollars and access to information to help locate childcare in the community are the top two at 61% and 37%, respectively.

Unaffordable Childcare Costs for Many Families For childcare to be affordable for the average American family, the US Department of Health and Human Services calculates that the cost should be 10% of a family’s annual household income. The actual average cost during 2014 (the latest data) for one infant for full-time care in a childcare center, which is the type of facility that serves the most children, was 7% to just more than 15% of a married couple’s median income. For single parents in every state, it’s almost 250% more than the US government benchmark of 10% of income, at more than 24% of a single parent’s median income, and even more than 10% of a married couple’s.

Advertising Strategies For-profit childcare centers are likely to find that a combination of early morning and late evening news and an email newsletter to be the most cost- effective advertising strategy to promote their brand and engage directly with parents. For-profit childcare centers with multiple locations in the market or separate centers that serve different neighborhoods may want to consider hosting a family activity, such as a picnic or childhood safety or fitness carnival, to promote their services. For-profit and non-profit childcare facilities may be able to forge relationships with local retailers whose primary products and services are targeted at young families and cross-promoting with posters, coupons, special offers and collateral materials.

New Media Strategies A daycare center that takes the initiative to be more visible in the mobile channel is likely to attract more attention from young parents. Content should include photos and video testimonials, special event invitations, introductory coupons, etc. Since daycares must establish strong relationships with parents, owners/managers should find a blog a powerful engagement tool. Content should explain available programs and subsidies to cover part of the cost, the center’s security and safety protocol, etc. Invite current parents to share their stories on social media networks, explaining why they needed childcare services, how they found the facility where their children receive care, the center’s qualities, its programs and how their children’s learning has progressed.