How childcare will change in 2021

Pedro Silva
  • The COVID-19 pandemic has disrupted the industry and it is now accelerating change in the childcare sector into 2021 and beyond.
  • The number of quality childcare providers will become more limited in the short term, but grow as new ones enter the market.
  • Employers will need to provide more tools and support to working parents that are flexible, disrupted and tax-efficient.

This year has shown how vital childcare is to the economy, businesses and, most of all, working parents.

The COVID-19 pandemic has disrupted the industry and it is now accelerating change in the childcare sector into 2021 and beyond. How U.S. society deals with these changes will impact our future as a country. How employers deal with these changes will impact the future of their workforce and the competitiveness of their business.

No crystal ball is perfect, but we expect these five trends to reshape childcare next year.

1. Few financially strong providers will survive the pandemic and new ones will emerge

Among childcare providers, enrollment continues to be down 67% on average across the country, according to a July survey by the National Association for the Education of Young Children. The Bipartisan Policy Center finds that more than 70% of parents surveyed in August reported that their childcare program had closed or was operating at reduced capacity.

Nearly 13% of parents report they were forced to quit their jobs or reduce their work hours due to a lack of childcare. The changing landscape of providers will require more support for working parents to find affordable childcare and mean that employer-sponsored benefit programs should be more flexible to help every employee with their particular needs.

2. Childcare and summer care providers will be safer and better prepared

Roughly 19.5 million children did not have summer camp experiences because of coronavirus-related shutdowns. The CDC research shows how camps can open next summer and prevent coronavirus spread by using extensive safety protocols.

Next year will see more summer care as working parents want activities for their kids who spent last summer in lockdown. Employers that help parents balance their jobs and childcare next summer have an opportunity to make major gains in productivity and keep a valuable segment of their workforce happy. 

3. Working parents will need more help

Flexible schedules are not enough. S&P Global and AARP found that the amount of time required for childcare duties since the pandemic began has increased for 58% of parents. Nearly half of households earning more than $100,000 per year had difficulty finding quality childcare, according to the Center for American Progress.

Employers that support working parents more in 2021 will see gains in workforce productivity and lower employee turnover. Better childcare benefit programs can enhance an organization’s diversity and inclusive goals. These things are excellent outcomes for employers and parents, but organizations should offer more help to working parents because it also increases business and financial performance.

4. More tax incentives are coming to help parents, providers and employers who offer benefits

The incoming Biden administration will make childcare a priority as part of its Build Back Better plan, which aims to spend $775 billion over the next decade to bolster the caregiving economy. Regardless of whether Congress is divided, tax breaks for working families and employers who provide childcare benefits have bipartisan support. 

Parents and employers will need guidance on how to take advantage of the evolving tax environment. Tax-efficient childcare benefits can save employers up to 70% on program costs. This doesn’t happen automatically. Arvorie’s platform can help employers optimize their childcare benefit programs while giving them more financial resources to support working families.

5. A surge of tools and support for childcare are on the way

Working parents need so much relief that they are experimenting with new ways of childcare delivery, such as remote learning and e-babysitting. The effectiveness of all these innovations remains to be seen, but the trend to a more flexible, distributed and safer childcare system will continue.

More tools and supports are coming to working parents. For example, Arvorie’s Connect plan gives parents a childcare search engine and exclusive rates at high-quality providers. Organizations can become employers of choice among parents in the new year by adopting such tools and support benefits.

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