Gary Romano, CEO, Civitas Strategies, has personally advised thousands of small businesses.
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The importance of business partnerships in supporting child care has been recognized for decades. Large companies have made significant strides in advocating for and implementing family-friendly policies, such as on-site child care centers, backup care and flexible spending accounts. These critical programs, offered by companies like Patagonia and Marriott, have helped working parents balance their professional and family responsibilities.
However, traditional partnership models require a large initial investment to build facilities, meet regulatory requirements and staff up. This large cost has meant that these traditional models are almost exclusively offered by large businesses (and even then, only around 10% of large businesses).
The result is that while 12% of workers have access to some form of child care support, the vast majority are working for large businesses and small businesses, which employ a significant portion of the U.S. workforce and have to compete in the labor market without them. According to a study by the Bipartisan Policy Center titled "Child Care is a Business Affair: Perspectives from Business Leaders on Child Care Policies," small businesses face unique challenges in supporting their employees' child care needs due to limited budgets, human resources infrastructure and representation in policy discussions.
This disparity is particularly concerning given that small businesses are the backbone of the U.S. economy. In 2020, small businesses employed 60.6 million people, which represented 47.1% of the private workforce.
Creating Partnerships To Support The Workforce
It is crucial to find ways for small businesses to partner with child care providers, even with limited resources, to support their employees and promote a more inclusive and productive workforce.
The Texas Child Care Provider Expansion Initiative, launched in August 2022, offers a promising model for encouraging small businesses to engage in child care partnerships. Through this program, the Texas Workforce Commission invested $234 million to expand child care access statewide. As part of the eligibility criteria for the program, child care businesses seeking grant funds needed a partnership with employers.
While the state allowed traditional partnerships such as those for on-site child care or contracted child care near a business’s operating location, they also allowed a broader interpretation. Specifically, partnerships were allowed between a child care business that provides some benefit to employees, broadly defined. The result of this broader interpretation was a greater opportunity for partnership with small businesses.
For example, one allowable approach involved child care providers offering discounts or waiving registration fees for employees of partnering small businesses. This arrangement reduces costs for families without placing a substantial burden on the child care provider or the small business. In exchange, the small business promotes the child care program to its employees, helping the provider reduce marketing costs, reach a targeted audience and stabilize revenue streams.
Due to the ease of creating these mutually beneficial partnerships and their low cost of entry, the model is scalable and can be adapted to suit the needs of various small businesses and child care providers with or without state support. By leveraging their unique strengths and resources, small businesses and child care providers can create a support system that benefits working parents, their children and the broader community—for little to no cost.
Considerations For Business Owners And Policy Makers
As policymakers and business leaders continue to address the child care challenges faced by working families, it is essential to include the perspectives and needs of small businesses in the conversation. Innovative partnership models, like those demonstrated in the Texas Child Care Provider Expansion Initiative, can serve as a foundation for developing inclusive, sustainable solutions that support both small businesses and their employees.
For child care business owners, partnerships with local businesses offer a valuable opportunity to reduce marketing costs and increase the likelihood that slots will be filled quickly, leading to greater stability in revenue. These partnerships can be forged at all levels of business, especially with small businesses that are already frequented by child care business owners.
Establishing a relationship can be straightforward, often involving local small businesses referring their employees to the child care provider. For instance, consider negotiating discounts or fee waivers with local child care providers in exchange for promoting their services to your employees. This mutual benefit can help reduce costs for both parties and provide valuable support to working parents.
For other small business owners, partnering with a child care business can help make it easier for employees to find access to care. For example, a partnership could include giving the business' employees priority on a waitlist for care, increasing the velocity of securing a slot. Alternatively, a partnership where the child care business forgoes a registration fee or offers a discount provides a retention strategy for an employer with no direct cost to them.
For state and regional leaders aiming to increase economic stability within the child care sector, fostering these business relationships can be a low-cost way to improve outcomes for child care businesses. Encouraging local businesses to form partnerships with child care providers can create a support network that benefits the broader community. By promoting these partnerships, state and regional leaders can help ensure that child care providers remain financially stable while also supporting the workforce by making child care more accessible and affordable for working parents.
The collaboration between small businesses and child care providers represents a mutually beneficial solution to the ongoing challenges faced by working families. By adopting innovative partnership models, small businesses can enhance their support for employees while child care providers gain greater stability and reach. State and regional leaders play a crucial role in fostering these relationships, ultimately contributing to a more inclusive and sustainable economy.
As we continue to navigate the complexities of work-life balance, such partnerships offer a promising path forward, ensuring that all families have access to the quality child care they need to thrive.
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