For many years, workforce shortages have been a major obstacle to business growth across the country, including for companies throughout Indiana. A range of factors have contributed to the challenges, from underdeveloped skills and higher wage demands to ineffective recruitment efforts.
A new regional analysis by the Northwest Indiana Forum Foundation examines another factor that, while less widely discussed, has been a significant barrier in workforce development. For many parents, a lack of reliable and affordable childcare is the main deterrent to returning to or entering the workforce.
The Foundation’s “A Northwest Indiana Childcare Investment Strategy – Fueling Workforce and Economic Growth,” examines the gaps in childcare access in the region, an analysis that had not previously been available to employers and economic development officials. The Foundation has used data-driven findings to detail how childcare has developed into an essential economic driver and created an outline of a multi-faceted approach to stabilizing and strengthening the childcare landscape, which in turn, will contribute to higher economic returns for the region.
“The goal is to equip leaders in NWI, such as policymakers, employers, community organizations, and foundations, with the knowledge and tools needed to collaboratively build a resilient early childhood education ecosystem. This effort will unlock the region’s full economic and human potential,” the report notes.
About the Data
The study focuses on a seven-county area of NWI, including Jasper, Lake, LaPorte, Newton, Porter, Pulaski and Starke. The goal of the data is to quantify the economic costs of childcare barriers in the region by first examining how many parents were willing to work but could not do so due to childcare constraints. The findings indicate that nearly 5,000 parents are qualified and willing to work, but childcare barriers prevent them from doing so.
The leading barriers, according to respondents in the study, are the cost of childcare and the availability of spots in childcare facilities. That lack of availability is further compounded by a labor shortage in the childcare sector itself. According to the report, “Childcare providers operate with unsustainable business models, struggling to offer competitive wages and benefits. This leads to high turnover and limits high-quality care options.” As a result, researchers predict a decline of up to nearly 30% in childcare workers by 2034, further limiting availability for parents to return to work in other sectors.
According to the data analyzed by the Foundation, if these barriers were lifted and the parents were able to return to or enter the workforce, the region could experience over $746 million to over $1 billion in economic impact. Broken down, that would mean anywhere from $200 million to $268 million in parental earnings, up to $756 million in Gross Regional Product, and $43-$46 million in tax revenue across sales, property and income taxes.
As part of the analysis, the Foundation also learned that 81% of the employers who participated in the study said they have been impacted by childcare issues. Half of the employers reported that employees needed to leave their jobs due to a lack of childcare, and 48% said they have had employees who had to reduce their work hours. A striking 38% of employers noted that they have had qualified candidates decline offers due to the inability to secure childcare to take the job.
From Data to Strategy
With solid data from which to work, the Foundation has developed a strategy to break down the childcare barriers for parents that will get them back into the workforce, help employers scale their businesses and strengthen the economic impact of the region.
One of the key recommendations is an investment strategy with more employer engagement. The strategy encourages employers to conduct thorough needs assessments within their workforce and offer greater financial support as well as support in terms of remote work options and flexible schedules, which can help reduce absenteeism and turnover.
The report also encourages larger employers to explore on-site childcare options or the development of those facilities nearby. For smaller employers who may not be able to offer greater financial support or implement their own childcare facilities, the report suggests collaboration models, where companies can pool resources to support childcare needs.
To improve childcare capacity, the report stresses the need for workforce development initiatives that will improve wages and skills for those working in the childcare industry and calls on policymakers to help curb costs and expand availability.
Ensuring Accountability
As part of the study, the Northwest Indiana Forum Foundation has developed a comprehensive Evaluation Toolkit to help measure progress and identify areas for improvement in regard to breaking down the barriers of childcare restraints. The toolkit outlines a combination of several evaluation methods, including the use of data, surveys, interviews and focus groups to help employers and economic development officials navigate more effective childcare solutions. The kit also includes tools to help track outcomes.
The study indicates that while the childcare crisis in Northwest Indiana currently negatively impacts the economic potential of the region, a clear plan delivers hope in reversing course. As the report states: “The insights gained from comprehensive analyses and the success stories of employer-engaged childcare models show that effective solutions are within reach.”
