| White Paper 2024
A New Era in Childcare:
How Upwards is Transforming America’s
Broken Market
Introduction
In 2021, Janet Yellen, U.S. Secretary of the Treasury, described childcare in the U.S. as “a textbook example of a broken market,” perfectly encapsulating the paradox wherein those who provide childcare are vastly underpaid, and the ones who need it the most can’t afford it.
For most working families, access to affordable, quality childcare remains a constant struggle. This challenge ripples outward, impacting businesses through absenteeism, turnover, and lost productivity. It strains communities by limiting economic mobility and workforce participation, especially women and underrepresented groups. And at a macro level, the U.S. economy suffers from the constrained earnings and spending power of families burdened by crippling childcare costs.
However, the traditional solutions have proven inadequate in solving the childcare crisis at scale. Employee childcare benefits are often reserved only for an organization’s top talent, leaving the vast majority of working families without support. On-site childcare centers exclusively serve the employees of a single company, failing
to meet the needs of the surrounding community. Subsidy programs operate in silos with no coordination, leading to underutilization of funds and families slipping through the cracks.
In this comprehensive white paper, Upwards examines the nuanced and oftentimes unseen factors contributing to America’s childcare crisis. It explores the systemic issues, market failures, and ripple effects that have led to this untenable situation. The paper also outlines a bold vision for a transformative, technology-driven solution that fosters unprecedented collaboration between employers, governments, families, and childcare providers.
By leveraging innovative technologies and aligning key stakeholders, Upwards presents a pathway to finally solve the childcare crisis at scale. The white paper demonstrates how this model empowers women to fully participate in the workforce, provides economic stability for childcare providers, bolsters businesses with a more reliable workforce, strengthens local economies, and cultivates a more vibrant society.
Contact: Anna Rasby-Safronova, Senior Public Relations Manager
Email: press@upwards.com
The Upwards Model:
Multiplier Effect for Families, Caregivers, Employers, & Government
When we think of universal childcare as an opportunity for every child to access high-quality care before kindergarten, after school, or during summer, regardless of location or parents’ jobs, Upwards is making this vision a reality here and now through our unique all-stakeholder approach. Upwards bridges the gaps between the needs of families, provider availability, and employer and government contributions, creating a significant economic breakthrough for everyone involved.
The economic and social benefits of universal childcare are undeniable, with studies showing that early childhood education yields a $ 4-9 return per dollar invested. It not only benefits the health, education, and development of young children and supports parents currently, but also leads to increased earnings, employment, and safety in the future.
The return on investment (ROI) in early childhood education is even higher in high-income countries like the United States. The Perry Preschool Study, a longitudinal study conducted in the 1960s, continuously confirms the high ROI of quality early childhood education, yielding as much as $12.90 per $1 invested. The public return came from a combination of
education savings, taxes on earnings, welfare savings, and crime savings. Additionally, study participants had 14% higher employment rates at age 40 (76% vs. 62%) and similar gains at 27. These benefits don’t factor in increased worker retention and productivity from parents, especially mothers.
A recent study found that since Washington, D.C., began offering two years of free universal public preschool in 2009, the percentage of mothers with young children participating in the labor force increased by 12 percentage points1. And when the cost of childcare rises, another study demonstrated a 13% decline in employment of mothers with children under age 52. Across multiple pieces of research, access to affordable quality childcare shows 12-14% increase in women in the workforce, yielding incredible benefits for the economy and wellbeing of families.
Rasheed Malik,
Kubota, “Childcare
Tiny Starz Daycare, Los Angeles, CA
Blueprint for Impact:
Upwards’ Childcare Success in California
With universal childcare still being an idea and policy goal, Upwards steps in with a tech-driven solution model. Upwards bridges the gap by efficiently combining resources from governments and employers, empowers families with tools to navigate the childcare landscape, while simultaneously stabilizing the income of childcare providers, keeping them in the industry and increasing the availability of childcare spots.
Upwards delivers results across the country, but California serves as a perfect blueprint of our model working. Here, we’ve implemented several programs demonstrating the Upwards Childcare Model:
• Upwards’ Uplift Childcare Subsidy Program: This program provides financial assistance to families, serving more families faster, eliminating waitlists and guaranteeing swift payments to providers.
• Boost by Upwards: This program in partnership with municipalities is stabilizing over 300 childcare businesses in California, creating a more reliable childcare infrastructure.
• Upwards Network: In California alone, Upwards has helped nearly 300,000 families find childcare and match with more than 33 thousand providers in the state.
• Employee benefits: Nearly 20,000 working families in California were able to easily access quality childcare through employer-provided benefits managed by Upwards.
• Supporting student parents: We partner with local colleges, like Mt. San Antonio College in Southern California, to provide childcare resources for student parents to ensure that they can complete their education journey.
$9.3 Billion
in potential economic gains from enabling more women to join the workforce
Upwards’ model, if replicated nationwide, could unlock significant economic benefits by enabling more women to join the workforce. This includes direct income from additional working mothers, cost savings for businesses due to reduced absenteeism and turnover, and productivity gains. While calculating the exact total economic gain is complex, Upwards estimates a potential first-year economic benefit of over $128,000 for the local economy per additional working mother. This translated into over $9.3 billion in potential economic gains over the first year which is compatible with the GDP of a small country.
How we arrive at this figure:
Entry Data:
• In 2018, the proportion of California women with children under five who participated in the workforce was 62.4%, compared to 75% for other primeage women.
• Recent data shows this gap is narrowing, with 67% (census.gov) of women with children under 6 in California employed in 2022, compared to 93% of men with young children. Based on these figures, Upwards conservatively estimates a potential 14% increase in workforce participation among mothers with young children if childcare challenges are resolved.
• The average yearly salary for women in California is $50,900.
• Studies show lost productivity and absenteeism cost employers $1,1503 per working parent each year, and those figures were calculated before the pandemic.
• Average turnover cost per employee replacement is $76,350 (calculated as Average Yearly Salary x 150%)4
• Finally, according to the 2022 census.gov data, there are 519,156 mothers with children under the age of 6 currently in the California workforce.
$3.7 Billion in
potential direct income for mothers entering the workforce in California alone.
Direct Income:
• An increase of 14% in workforce participation translates to approximately 72,682 additional mothers entering the California workforce (assuming the same number of mothers with young children in 2022).
• With an average salary of $50,900, this generates an estimated $3.7 billion in direct income for these mothers in the first year.
Reduced absenteeism & increased productivity:
• With additional 72,682 mothers entering the California workforce, and considering an average absenteeism cost per employee of $1,150, this translates to potential annual savings of $83.6 million for employers.
Turnover savings:
• Using the previously defined average turnover cost per employee replacement of $76,350 (calculated as Average Yearly Salary x 150%), considering that mothers stay employed when they have reliable, quality childcare through a combination of government and employer contributions facilitated by Upwards, this translates into more than $5.5 billion in employer savings ($76,350 * 72,682 women entering the workforce).
Important to note: These figures focus solely on the immediate economic impact and do not consider the long-term advantages of career mobility and improved family well-being that naturally follow from increased female workforce participation. These long-term benefits exist alongside the well-established $9-12.90 return on investment for every dollar invested in early childhood education. Upwards emphasizes that this estimated over 128,000 economic output per person represents just the initial year’s impact and adds to the positive outcomes documented in numerous studies on early childhood education investments.
If we cap a parent’s (or guardian’s) payment for childcare at 7%4 of their income, Upwards’ investment in each child is estimated at $21,396 a year. This is the combined cost of subsidized payments through our partner programs with the state and the cost of stabilizing and creating childcare spots by supporting childcare providers through our Boost program.
This initial analysis serves as a springboard for a deeper evaluation of the full benefits of quality childcare for everyone. It includes both the advantages for families and the economic Boost from more mothers working. Upwards’ model is actively putting the pieces of the childcare puzzle together, and it’s already making a real difference in communities across the country. Imagine the even bigger impact we continue fostering collaboration and bridging the gaps between everyone impacted by the childcare crisis - families, providers, employer and governments! In the next chapters, we’ll take a closer look at the complexities of childcare challenges and market forces. We’ll showcase how Upwards’ solutions are meticulously designed to address these issues, using realworld case studies and examples.
4 https://faq.sparckco.com/knowledge/step-by-step-calculations-for-turnover-costs-and-projected-savings
Can access data to access efficiency
Able to support more families with less $
By reducing administrative overhead for every 10,000 children currently receiving subsidized care, Upwards could serve an additional 2,000 children.
The Upwards Solution
There is a connection between government and employer programs where both stakeholders contribute to family childcare access and benefit from it.
Technology makes application process easy. Providers are reimbursed when care is provided
Streamlined waitlists and simplified application process for families
Childcare is more affordable and accessible for working parents by reducing costs and streamlining the childcare search process.
Employers have visibility into their employees needs and benefits utilization and can customize their programs quickly
Families and providers can connect with ease. Quality providers are discovered even if they don’t have any digital presence
More than 3 million families are supported in their search for care by Upwards.
Families enroll in subsidy programs they are eligible for and get matched with providers in as little as 24 hours.
Upwards childcare benefits result in 30% reduction in employee absenteeism
Upwards reports 5x average decrease in turnover among employees utilizing childcare assistance:
More than 2,500 employers in the US have connected their workforce to Upwards’ support.
More families stay employed and can afford care, filling local childcare spots and ensuring providers stay in business.
Micro-entreprise childcare businesses are stabillized and profitable
New childcare jobs and childcare spots are created
Providers in the Upwards network save on average 20 hours a week on admin tasks and increase their revenue by 20-30% in the first months
The Childcare Puzzle
For decades, families across America have struggled with the immense challenges of childcare. The U.S. childcare system has a complex history, beginning as a charity enterprise in the late 19th century. However, a glimpse of a more robust system emerged during World War II. Following the mobilization of millions of women into the workforce to support the war effort, legislation provided subsidized, high-quality, full-day, year-round childcare for up to six days a week for families involved in the war industry. This program, however, was shortlived. Since 1972, when President Richard Nixon vetoed a bipartisan bill to provide care for all U.S. children, the U.S. still lacks a comprehensive national childcare policy, leaving families to grapple with accessibility, affordability, and quality issues. These issues were only exacerbated by the COVID-19 pandemic.
The Crushing Costs of Care
A whopping 67% of parents spend 20% or more of their income on childcare5. Childcare costs are 32%6 higher now than they were in 2019. That’s on top of the surge in inflation we’ve seen across the broader economy since then. The average cost of childcare for two children is now greater than the average rent in all 50 states, and greater than the average mortgage payment in 45 states7.
A System Strained: Low Wages & High Turnover
This high cost, however, doesn’t translate to well-compensated childcare providers. Childcare workers, disproportionately women
of color, are among the lowest-paid in the country, often relying on public benefits despite their critical and demanding jobs. The median hourly wage for childcare workers is $14.6 per hour8, and only 20.7%9 have employersponsored health coverage. More than half (53%)10 of childcare workers being enrolled in at least one main public benefit program—Medicaid, CHIP, EITC, SNAP, or TANF—compared to 21% of the U.S. It’s not surprising that the industry is struggling to attract, retain and pay their workers even despite prices that feel unattainable for parents. These low wages and lack of benefits contribute to high turnover rates, which negatively impacts the quality of care children receive and accessibility of care.
A Paradox of Scarcity & Underutilization
The U.S. childcare system faces a crisis marked by both scarcity and underutilization. On one hand, vast childcare shortages exist, where 51% of Americans live in areas where there are more than three times as many children as licensed childcare slots. The number of licensed small family childcare centers (FCCs) has also been declining steadily, falling by 48% from 2005 to 201711. This situation was further exacerbated by the pandemic, with many providers and childcare workers leaving the industry. As of September 2023, there were still 39,400 fewer childcare workers compared to February 202012.
14.5 million children under the age of 6 (or 70%) have both parents in the workforce. 43% of families report difficulty accessing care. 11% of providers are full at any given time. 51% of Americans live where there are more than 3x as many children as licensed childcare slots.
However, the crisis extends beyond scarcity. Even in areas with existing childcare facilities, there’s a disconnect between what providers offer and what families need. Upwards (2024) reports that only 11% of childcare providers are actually full at any given time. Over half of providers13 are experiencing a staffing shortage, leading to long waitlists and underenrollment compared to capacity. Small home daycare providers, more affordable for families, often lack the marketing and operational resources of larger preschools and centers. This can lead to situations where families simply don’t know these providers exist, or where providers quickly fill their limited infant capacity but struggle to find enough children older than 24 months, resulting in lost income.
“In September, most of my toddlers will start TK,” says Sherine Zaki, owner and operator at Kids Time All The Time Home Daycare in Sonoma County, California. “Licensing regulations limit the number of infants I can care for. Even though I have demand, I won’t be able to take on more. The problem is, I’m already struggling to find enough toddlers to fill the spots that will open up, and this means a financial hit for me.”
In essence, even where childcare exists, there is a mismatch between what providers can offer and what families need and can afford. This mismatch, coupled with 43% of families reporting difficulty accessing care, highlights the complex and nuanced nature of the childcare crisis.
Smart Minds Daycare, Carson, CA
2.7 million parents report making job changes due to childcare challenges.
The Ripple Effect: How Childcare Impacts the Economy
Contrary to a common narrative that frames childcare as solely a social issue, the crisis has far-reaching economic implications. As the U.S. Secretary of Commerce Gina Raimondo said in 2023, the lack of affordable, accessible and flexible childcare is “a huge drag on our economy.” Families
and providers are not the only ones paying the price – employers and governments are also significantly impacted.
Consider this: nearly 14.5 million children14 under the age of 6, or nearly 70%, have both parents in the workforce. Yet, 2.7 million parents report making job changes due to childcare issues.15 This translates to lost productivity, reduced tax revenue, and a weakened overall economy.
The Gender Gap: Women Leaving the Workforce
The childcare crisis disproportionately pushes women out of the workforce. The pandemic underscored this disparity. When childcare disruptions occur women leave the workforce at consistently higher rates than men16 This is even more true for women of color with young children, who left their jobs at higher rates (4.5%) than white mothers (1.5%)17.This trend continues –in 2022, 58% of parents who quit cited childcare issues. Alarmingly, 2023 saw double the number of women leaving the workforce compared to 202218, and over half of working mothers (52%) now contemplate leaving due to childcare costs.
Researchers from LSE and Princeton used data from 134 countries (95% of world population) to measure the impact of childbirth. Inspired by Nobel laureate Claudia Goldin’s work on gender inequality, they compared mothers and fathers with similar backgrounds (age, education, etc.) and found a “motherhood penalty” in nearly every country. This penalty refers to the decrease in a woman’s employment likelihood after childbirth, impacting their lifetime earnings and career advancement. On average, 24% of women leave the workforce within the first year, with 17% and 15% still absent after five and ten years, respectively19
More women are getting college degrees making them even more work-ready. The intention to leave the workforce is not there. It’s a decision forced by the circumstances, including childcare challenges. According to surveys, 98% of mothers want to go back to work after having children, but only 13% think it’s viable on a full-time basis due to lack of affordable childcare options and workplace inflexibility20 .
16 Gusto (2022). A Real-Time Look at ‘The Great Resignation 17Federal Reserve Bank of Minneapolis, (2022). Women of color and women with children disproportionately left the labor force during the COVID-19 pandemic
18 Mother.ly (2023). State of Motherhood Report
19 The Economist (2024). How motherhood hurts careers
20 Careers After Babies (2023). Careers After Babies Report
This decline in female labor force participation has significant business consequences. The U.S. faces a structural worker shortage, with 1.4 job openings for every unemployed worker (April 2024). Employers simply cannot afford to lose female talent. Affordable and accessible childcare is essential for parents, particularly mothers, to remain in the workforce.
In February 2024, Upwards surveyed parents utilizing the platform to find care for their children. 78.57% of the parents responded they’d be willing to leave their current job for another one that offers childcare benefits.
“Searching for childcare has become
my second job and has yielded nothing other than securing the fact that my husband or I will likely be leaving the workforce since the cost of hiring a nanny isn’t worth it. We will have to dip into our savings to do this, and possibly have to move,” commented a parent who participated in the Upwards’ survey.
Failing to address childcare needs could lead to a $64.5 billion annual drain on the U.S. economy as mothers are forced to leave their jobs or reduce hours21. It can cost an employer up to 4x a high-level employee’s annual salary to backfill their position if they leave the workforce after giving birth or adopting.
Searching for childcare has become my second job and has yielded nothing other than securing the fact that my husband or I will likely be leaving the workforce... We will have to dip into our savings to do this, and possibly have to move.
- Survey Participant
The Hidden Costs & Underutilized Benefits
Reduced employee productivity, recruitment challenges, and talent retention issues stemming from childcare challenges translate to a staggering $23 billion22 annual loss for businesses.
A major driver of the lost productivity is employee absenteeism when childcare arrangements fall through. On average, working parents skip 16.9 days23more than 3 work weeks - a year due to childcare issues and lack of support like back-up care. While some salaried employees may use paid time off for childcare emergencies, this temporary solution is far from ideal. Relying on vacation time to care for sick children instead of taking much-needed breaks leads to burnout and diminished productivity. For hourly workers, these childcare absences directly translate into lost earnings for both employees and employers. Women account for 85% of all childcare absences reported by parents24
While employers may offer childcare benefits to attract and retain talent, a lack of resources or data often hinders their ability to understand how well these benefits are being utilized. This lack of insight makes it difficult to design effective programs. Imagine the frustration of an employee who can’t use a childcare benefit because there’s no available care, or because the cost remains unattainable even with the company’s contribution. Employers need a comprehensive childcare benefits solution that helps working
$23 billion is lost annually by businesses because of childcare challenges.
16.9 days on average are skipped annually by parents due to childcare issues.
15% of 8.7 million eligible families are actually receiving childcare subsidies.
parents find existing childcare options, facilitates the creation of new childcare options where there’s a shortage, utilizes data-driven insights to adapt programs as employee childcare needs evolve and connects employees with available government resources they are eligible for.
The challenge of underutilized benefits extends beyond the private sector. Despite billions allocated for childcare subsidies, governments fail to bridge the gap due to outdated regulations and lack of innovation, paradoxically leading to funding cuts. Only 15% of the nearly 8.7 million25 eligible families are actually receiving childcare subsidies. Confusing applications and excessive paperwork discourage participation. And even if families qualify for assistance, they can’t find providers who enroll families receiving subsidized care, or they get stuck on waitlists. Lengthy payment cycles that include mailing
paper-based attendance sheets and waiting for a mailed check (60 days if everything’s perfect!) further strain childcare providers already operating with tight margins. Additionally, prioritizing families solely by wait time can render assistance useless, as children may no longer need childcare by the time it’s received.
Families struggle with high costs and limited access. Providers face low wages, staffing shortages, and under-enrollment. Employers lose productivity and talent, while governments see reduced tax revenue and workforce participation. This complex crisis demands a holistic technology-driven solution, one that bridges the gap between families, providers, employers, and policymakers. In the next chapter, we’ll explore how a comprehensive and technology-enabled approach can solve the childcare crisis for everyone.
Even if families qualify for assistance, they can’t find providers who enroll families receiving subsidized care, or they get stuck on waitlists.
Zoom in on the Upwards Solution
In recent years, the importance of technology in addressing childcare challenges was highlighted at every level of government. Emphasizing the need for faster payments for providers and online applications for families, it is now recognized that technology can be a powerful tool in tackling complex childcare challenges.
But for the founders of Upwards, the vision went beyond just apps and websites. They saw a future where technology wasn’t just a tool, but a bridge. A bridge connecting families juggling work and childcare with providers striving to offer quality care. A bridge connecting employers seeking to retain talent with a government committed to supporting working families. Upwards wasn’t just about streamlining the system – it was about building a comprehensive network that addressed the human needs at its core.
Jessica Chang’s personal experience in 2017 as a new mom struggling to find affordable, quality childcare was
the catalyst for creating Upwards, where she now serves as CEO and Co-Founder. Waitlists were long, and the costs were high, making it unreasonable for her to return to work. Determined to find a solution, Chang became a daycare operator herself. She gained firsthand insights into the pain points faced by both families and providers. Having a background in both tech and business management, she quickly recognized a clear gap in the market that technology could help bridge.
Now, Upwards empowers families to access and manage quality care, helps care providers run successful care businesses, offers customizable childcare benefits for employers, and simplifies access to government subsidies. In the following sections, we will explore in-depth the specific areas of impact Upwards delivers for each stakeholder group, and how this cumulative effect uplifts communities, empowers women in the workforce, strengthens businesses, and Boosts the overall economy.
Areas of Impact
Childcare Providers & Families
Upwards operates in all 50 states and has a provider network that is 98% female-run and more than half minority-owned. This diverse network comprises over 126,000 childcare providers who use Upwards’ software to manage their businesses. Upwards’ “business-in-a-box” solution is specifically designed for small childcare providers, particularly childcare homes.
These licensed childcare providers, often run by former preschool teachers or nannies, use Upwards’ user-friendly mobile app to digitize their entire operations, from parent communication and enrollment to billing and marketing, eliminating the need for prior business experience and enabling them to devote more time and resources to the core mission of caring for children. Increased efficiency also leads to better wages and working conditions, attracting and retaining qualified staff.
“The first year was a struggle, operating under capacity and draining my savings. I started to doubt myself, questioning if I was in the right place.”
“I got my daycare license in May. But by December I only had three families enrolled. The first year was a struggle, operating under capacity and draining my savings. I started to doubt myself, questioning if I was in the right place. Then, I joined Upwards’ California Subsidy program. Interest picked up quickly, and I filled all 14 spots within a few months. Now, a year later, I still get inquiries from parents, but my daycare is at full capacity. I’ve hired four staff members, and was able to raise their wages after their first year,” shares Sandra Segura, daycare owner and operator in Bakersfield, CA.
By empowering home daycares like Sandra’s to stay in the industry and thrive, Upwards makes affordable childcare a reality for countless families. Family Childcare Homes (FCCs) offer unique advantages that larger centers simply can’t compete with.
Here’s why FCCs are a crucial piece to building a sustainable childcare system that works for families:
- Sandra Segura, daycare owner
Flexibility: FCCs offer more flexible hours, including earlier pick-up and later drop-off options. Many FCCs are able to accommodate overnight stays and weekend care, making them a lifeline for frontline workers, essential workers, blue-collar workers, and those with non-traditional work schedules.
“When I started my daycare in Rohnert Park, CA in 2011, I saw a gap in care for parents with non-traditional work schedules,” says Sherine Zaki, daycare owner and operator in Sonoma County, CA. “I was the only provider in the area offering weekend and overnight care, supporting parents who were grocery store night shift workers, casino employees finishing late, nurses, and restaurant staff.”
Families working non-traditional hours, like night shifts or early mornings, often face complex and expensive solutions. They resort to piecing together care from multiple sources, creating a daily scramble.
Upwards Survey
The Upwards survey paints a vivid picture of this struggle for working families across the country:
“To find a daycare that opens at 4 am, I have to find someone to watch my children until 6 am and then drop them off.”
- School Bus Driver, IL
“My place of employment is staffed 24/7, including holidays and weekends. If you don’t fit in the daycare norms of M-F, 7am-6pm, you have no childcare and have to call in sick”
- Healthcare Worker, NE
“I work night shift, so I don’t get any sleep during the day because I have no childcare.”
- Healthcare Worker, CA
“The daycare’s hours are literally the same as my shift, 7:30 am to 4:30 pm. I drop my kids off at 7:30, but I’m late to work and have to stay past 4:30 every day. This means my husband has to come and pick up my car (since I have the car seats) and then go get the kids.”
- HR Specialist, MN
Upwards daycare network can bridge the gap between current offerings and parental needs
daycares in the Upwards network are open 7 pm to 11 pm
of daycares in the Upwards network offer drop off before 7 am
of daycares in the Upwards network are open after 6 pm
of daycares in the Upwards network offer care on weekends
Lower Costs:
Located in residential neighborhoods, FCCs typically have lower overhead and administrative expenses compared to centers. This translates to more affordable pricing for
Center-based care is 20% to 50% more expensive than home-based care depending on the children’s age, and county population size26
Talking about childcare pricing, Brittany ThomasArthur, Owner and Operator of Little Learners Daycare in Iowa, says, “home daycare providers, myself included, don’t like to go far above what the state subsidy is because they set it based on the median income in our area. We know these families struggle, and you can tell – it’s not about the money. You’re doing it because you care about the families you serve and their children.”
Personalized Care:
With smaller group sizes, FCCs can provide a more personalized environment approach.
Parents are not only concerned about the lack of individualized approach in childcare centers but also the crowded environments, which make it easier for children to be exposed to sickness. This increased exposure to illnesses often leads parents to skip work more frequently.
In family childcare homes (FCCs), the staff-to-child ratio is typically around 1 adult to 4-6 children, depending on the children’s ages. This is in contrast to childcare centers, where the ratio can be as high as 1 adult to 12 or 14 preschoolers. The smaller group sizes in FCCs allow for a more personalized and nurturing environment while still remaining affordable.
As Jennifer Beament, owner and operator of Hearts and Stars Childcare
in Rohnert Park in California, explains, “When I started thinking about opening my own daycare, my vision was to create an environment that they walked in and they felt like this is a home away from home. It’s important for them to feel like they belong where they’re going. Little kids especially don’t understand a setting of a school yet, they understand love and care.”
Upwards empowers FCCs, these vital childcare providers, ensuring a wider network of affordable and flexible options for families across the country. This, in turn, allows parents, particularly those working non-standard hours, to re-enter or remain in the workforce, contributing to a stronger economy and a more secure future for their families.
For families, Upwards’ platform provides an efficient way to search, communicate, and manage their childcare needs. Parents can quickly find and compare providers in their area, accessing real-time information
There are up to
3.5x fewer children per adult in family childcare homes compared to childcare centers.
on available openings, hours of operation, educational approaches, and more. This streamlines the typically cumbersome process of manually contacting multiple providers decreasing the search time from 20+ hours to minutes.
Once a family selects a provider, they can handle the entire enrollment process, ongoing communication, and even receive updates on their child’s day through the Upwards app.
Upwards’ platform has supported more than 3 million families in finding and managing affordable care for their children. Upwards’ network offers a diverse range of flexible care options, including drop-in, non-traditional, night-time, and extended or summer care. This caters to the varied needs of modern families, providing the convenience required to balance work
Upwards supported
3 million families in finding affordable, quality childcare.
and family obligations.
Kadine Thompson, serves in the U.S. Army Reserve in addition to her civilian career. As a reservist, Thompson was able to utilize Upwards’ military childcare program to secure reliable care for her kids during mandatory drill weekends. Finding childcare for these obligations was a major challenge that even made her question staying in the Army Reserve: “Sometimes I’ve gotten to the point where I’m like, is staying in the Army worth it? It was like a big burden came off my shoulders. I was able to focus and just be at work for the first time. If I continue to have reliable childcare for drill weekends, when my contract expires, I will want to renew it.” Upwards’ tailored program for military families allowed Thompson to access convenient, affordable childcare options that accommodated her Reserve schedule, relieving a significant burden.
Employers & Working Families
The story of Kadine Thompson, a single mom in the U.S. Army Reserves, exemplifies the widespread struggle families face with securing reliable childcare. These challenges extend beyond the individual, impacting businesses through lost productivity and employee turnover resulting. A staggering $23 billion is lost annually by U.S. employers due to childcare issues.
By integrating with both employers and government entities, Upwards bridges the gap and is able to leverage a range of childcare benefits and government subsidies to increase affordability and accessibility for working families. Upwards currently partners with over a thousand of employers nationwide, including industry leaders like Amazon, Chobani, Dollywood, JCPenney, Trane Technologies, and the U.S. Army Reserves and National Guard.
Upwards simplifies childcare benefits for companies, providing data-driven insights that help tailor benefits packages to specific employee population needs. Upwards’ solutions
have led to a remarkable:
5x average decrease in turnover among employees utilizing childcare assistance. This translates to substantial cost savings for companies due to reduced recruitment and onboarding expenses.
The positive impact of accessible childcare extends beyond Upwards’ direct partners. A recent study by the Manufacturing Institute highlights the critical role childcare plays in attracting and retaining female talent.
The study found that women cite lack of flexibility (63.1%) and lack of childcare support (49.2%) as their top barriers to entering or remaining in manufacturing careers. While women currently comprise only 29% of the manufacturing workforce, the study estimates that increasing that share to 35% could fill the current 746,000 job vacancies in the sector.
Upwards partner Trane Technologies exemplifies the positive impact of childcare solutions on women in manufacturing. “We’re committed to uplifting women so they can thrive at
Upwards simplifies childcare benefits for companies, providing data-driven insights that help tailor benefits packages to specific employee population needs.
5x average decrease in turnover is seen among employees utilizing childcare benefits.
$23 billion is lost annually by U.S. employers due to childcare issues.
Businesses see a
4.25x return on every dollar invested in childcare benefits.
work and home,” says Mairead Magner, Sr. VP and CHRO at Trane Technologies. “By piloting affordable, accessible childcare solutions with Upwards, we’re helping women balance their work and family responsibilities, allowing them to fully participate in the workforce and pursue rewarding careers in manufacturing.”
Independent research supports the financial benefits of childcare benefits for employers. A study by Moms First and Boston Consulting Group found that employers can see a return of up to $4.25 for every dollar invested in childcare benefits. This return on investment can be achieved by retaining as little as 1% of their eligible employees.
Upwards has analyzed the impact of its childcare programs on employee retention rates across healthcare and manufacturing partners. Among over 42,000 manufacturing workers across eight companies, employees utilizing Upwards childcare benefits were 6.48 times less likely to leave the company within a 10-12 month period.
The impact is even more pronounced in the healthcare sector. Upwards analyzed data from nearly 90,000 healthcare workers across eight hospitals (rural, urban, large states, and small) and found that employees utilizing employer-provided childcare benefits were 13 times less likely to leave the organization.
Here’s an example story illustrating the impact of childcare challenges on a company and its employees:
The financial toll is significant.
Studies show the average cost of employee turnover can be calculated using this formula:
Average
Turnover Cost
For ABC, using an average entry-level salary of $35,000 and senior manager salary of $120,000: [$35,000 x .5) + ($120,000 x 2.5)]/2 = $158,750. So the average turnover cost is $158,750 per employee departure at ABC. If just 1% of its 2,600 working parents (26 employees) leave annually due to childcare issues, the total turnover and replacement cost would exceed $4.1 million.
Upwards Solutions for Government Partners
Upwards collaborates with over 20 government entities (municipal, state, federal) – including the California Department of Social Services, Park City (UT), and the U.S. Army – to develop scalable childcare solutions. Upwards leverages its technology and established provider network to focus on three key areas:
Optimizing Subsidy Programs:
Upwards streamlines administration, improves efficiency, and reduces costs, ensuring faster access to quality care for families in need and military families.
This translates into increased tax revenue as more parents are able to enter or re-enter the workforce. Additionally, efficient use of funds allows programs to serve more children, creating a more skilled future generation for the workforce.
By alleviating the childcare burden, Upwards empowers greater workforce participation among minorities and women who disproportionately shoulder family caregiving responsibilities. This, in turn, secures economic mobility for them and their families.
Increasing Supply:
Programs like Boost help providers expand capacity, creating new childcare jobs and improving access for working families.
This injects more money into the local economy as new jobs are created and filled. Additionally, a robust childcare system allows parents to participate more fully in the workforce, further Boosting the local economy.
Supporting Recruitment, Readiness, & Retention of Military Service Members
Upwards provides military families with safe, reliable, and cost-free childcare during weekend drill, battle assembly training, and emergency deployment. This translates to a safer community and a stronger national defense.
Uplift by Upwards Subsidy Program Transforms California’s Childcare Landscape CASE STUDY:
Upwards Uplift Subsidy Program in California is taking on inefficiencies in the way funds are distributed—streamlining waitlists, matching families with quality
Traditional subsidy solutions regularly fall short in providing access to childcare when families actually need who’ve waited the longest, even
Costs and Underutilized Benefits section, this creates a backlog of fashioned, paper-based systems. Traditional solutions offer provider
lists but lack personalized guidance. Families spend hours searching websites and making calls to find suitable care, with no dedicated support.
Upwards Uplift program currently supports 103 families in California by providing more than 6,000 weeks of subsidized childcare, ensuring the sustainability of 15 local childcare providers by guaranteeing rapid payment when care is delivered and fostering stable enrollment.
In contrast to the lengthy application and enrollment processes of other major subsidy programs, which can take up to 30 days, Upwards processes applications, matches, tours, and enrolls families within just 5 days. This efficiency has allowed Upwards Uplift Program in California to fill 90% of its slots within the first 6 months of operation, far exceeding the two-year estimate set by the government body.
This focus on efficiency stands in stark contrast to the traditional system, where administrative costs often consume over 55% of the allocated funds. Upwards’ model reduces these costs to below 40%.
By reducing administrative overhead, Upwards serves more children. Imagine the impact if this approach were applied more broadly. Upwards estimates that by reducing administrative overhead for every 10,000 children currently receiving subsidized care, we could serve an additional 2,000 children. This translates into high-quality care, nutritious meals, and a nurturing environment for more children,
impacting their development and family well-being.
For Ariel M., a working mom in Kern County, CA, childcare was a constant hurdle. Juggling her job at a local restaurant, her education, and caring for her daughters left her feeling overwhelmed. Every Friday, payday, it was a scramble to transfer money between accounts, just to ensure she had enough to cover childcare.
Discovering the program through her childcare provider, Helping Hands Preschool, was a turning point for Ariel’s family.
“I applied on a Thursday, and my daughter was able to start five days a week that following Monday,”
Ariel shares, highlighting the efficiency and responsiveness of Upwards. The financial assistance provided by Upwards allowed Ariel to save approximately $800 per month on childcare expenses, enabling her to focus on her studies and spend quality time with her family without the
Precious Lambs Early Learning Academy, Murrieta, CA
constant worry of financial strain.
“If it weren’t for Upwards, I would be choosing between going to school and staying home, for sure,” Ariel expressed, highlighting the program’s crucial role in supporting her educational and personal goals.
The program provided essential childcare support, allowing parents to focus on finding work and securing stable housing, while ensuring their children had a safe and nurturing environment off the streets.
Upwards’ Uplift Subsidy Program has been a transformative force for families facing homelessness, like Monique and Jane from Los Angeles County. With peace of mind that their children were receiving nurturing quality care, both Monique and Jane28 were able to secure jobs and stable housing. For Jane, the program’s speed and efficiency were a game-changer. Her application was processed and childcare placement secured within a remarkable 24 hours. This swift action allowed her to focus on finding work and housing. Jane benefitted from a stable and nurturing environment for her child for a full year before relocating for a full-time job – a testament to Uplift’s long-term support.
Traditional subsidy systems have compounded the challenges faced by childcare providers operating on narrow margins and discouraged many from accepting subsidy children. Payment from the state can take as
long as 60 days, putting a significant strain on their businesses. Upwards is addressing this by paying providers within 72 hours, a small change that can have a transformative impact. This improves cash flow for providers, allowing them to invest in staff, equipment, and quality improvements. In fact, Upwards’ Uplift Subsidy Providers have achieved an average 70% growth in enrollment since joining the program, translating directly to increased earnings.
As Natalie Lamb, a childcare provider, shares: “When I started [with the Upwards Subsidy Program], I had not been enrolling children and there was a lot of uncertainty. Fast forward, and I’m now at full capacity! And some families are already requesting spots for their unborn kids because they’re seeing the awesome care their current little ones are getting. Upwards’ subsidy team helped me navigate the business side of things and provided the resources to enhance the quality of care I offer. Steady enrollments mean steady income, and that’s been a game-changer for me.”
Upwards’ unique technology- and datadriven model allow for our employer and government programs to form a powerful synergy. When Upwards childcare benefits are offered through employers, we match employees with both Upwards’ Uplift program and other government subsidies. This “crossover model” multiplies the impact by leveraging both employer and
CASE STUDY:
Boosting Providers to Stabilize the Childcare Market
Upwards’ model, which bridges the gap between various stakeholders in childcare and combines real-time data on childcare needs, allows us to directly address supply and demand imbalances. By empowering existing childcare providers, we can significantly increase childcare capacity.
Upwards’ Boost program, powered by partnerships with municipalities, delivers on this promise, building upon our existing daycare management platform’s capabilities. Since its 2022 launch, Boost has grown to support 14 communities in 6 states.
By participating in the Boost program childcare providers effectively digitize their entire operation. The Boost program equips childcare providers with Upwards’ comprehensive daycare management platform, free of charge. This user-friendly app automates administrative tasks (saving an average of 20 hours weekly), streamlines family matching, and offers marketing assistance to fill vacancies.
Furthermore, the platform facilitates seamless communication between providers and parents. Features include virtual and in-person tour scheduling, photo and video sharing for parent engagement, and in-app tools for communication.
Boost also empowers providers with financial management tools like attendance tracking, tuition processing, and subsidy reimbursement. Additionally, the program offers a library of professionally curated activities for lesson planning, along with dedicated business coaching and 1-on-1 assistance tailored to each provider’s needs.
The program’s results demonstrate its effectiveness in stabilizing participating childcare providers. Notably, 97% have remained open throughout the program year, exceeding the 80% goal set by our municipal partners and mitigating the effect of the end of American Rescue Plan stabilization funding that was expected to result in 70,000 providers
across the county closing their doors in 2023. Here’s a closer look at some additional positive outcomes:
• Job Creation: The program is on track to support more than 350 providers, and has stabilized and created over 66.529 childcare jobs.
• Revenue Growth: At least 30% of providers have reported a gross revenue increase of 20-30%.
• Increased Capacity: Providers who hired additional staff have collectively increased childcare slots by approximately 50-60%. This represents a significant improvement for their daycare businesses.
Jennifer Beament, owner of Hearts and Stars Childcare in Sonoma County, exemplifies the program’s impact. After joining Upward in August, her daycare reached capacity within just 2-3 months. She has successfully maintained full enrollment ever since, expanding her license and growing her business from a small daycare into a large one.
Other local non-Boost childcare centers and family daycare homes currently operate at an average enrollment rate of only 71%, with an average daily attendance of just 39%. California Childcare Resource & Referral Network data reveals a further cause for alarm: a staggering loss of 18,000 licensed childcare slots across the state between 2019 and 2021.
Therefore, the Boost program leverages the Upwards model to break the vicious cycle contributing to the childcare crisis. With better support, providers can stay in business, leading to more childcare spots, increased affordability and access for families.
CASE STUDY:
How Reliable Childcare Supports Military Readiness & Retention
Military families face distinct challenges, particularly when securing reliable childcare. Deployments, frequent relocations, and extended training periods often create challenges for families with young children.
Through this pioneering partnership, Upwards secures the U.S. Army Reserve and National Guard families have access to safe, reliable, and cost-free childcare during weekend drill, battle assembly, and emergency deployment. Within just eight months of the program’s launch, Upwards has supported thousands Army Reserve families with access to quality childcare.
Here’s how the program benefits participating military families:
• Relieves stress on parents who don’t have family or friends nearby to watch their children.
• Gives spouses the opportunity to get back to work.
• Parents can fully focus on their drills knowing that their children are with a licensed, vetted childcare provider.
• Provides flexibility for those who need care last minute.
• Opens the door for reenlistment and career growth opportunities.
The program’s positive impact is evident in the experiences of participating families, as illustrated by these quotes:
Impact on Retention & Reenlistment:
Staff Sergeant Jessica Millican, from a dual-military household in Kansas, struggled to find quality childcare after her husband deployed. But thanks to the new pilot program, she was matched with a provider who had the necessary experience and qualifications to support her two sons with neurodivergence and severe allergies. “Having childcare I could trust, I was able to focus on my job,” she explains. “I was able to set aside my worries for my children and be a productive member of my unit.”
Millican’s experience had a profound impact. “In November,” she says, “I reenlisted indefinitely. Without the program, I was definitely asking, ‘Could I make it work with my husband
deployed? Was the Army the best choice for my family?’ But this program has given me the confidence to sign an indefinite contract with the Army and continue my career.”
LaRee Lowman, U.S. Army Reserve Specialist E4 has been relying on the program’s drill childcare for her 2-yearold since September. She emphasized the significance of childcare in the reserves, stating, “Childcare is an issue, one of the top five reasons I hear why soldiers don’t want to re-enlist or stay in. On active duty, you have on-post childcare support, but you don’t have those same resources on the reserves side when you’re not near a base. So, it’s hard.”
Impact on readiness:
Chrissa Marie Sutters, U.S. Army Reserve Specialist E4, emphasized the role childcare support plays in military readiness: “from my own experience and also from my peers, having childcare in the military is critical. Many times, we don’t have a say in what happens; we have to go with what is assigned to us. Having childcare gives you the peace of mind to pack up and do your job as needed.”
“This program has given me the confidence to sign an indefinite contract with the Army and continue my career”
- Staff Sergeant Jessica Millican
Supporting military spouses’ employment:
Captain Peter Ogao’s family struggled with childcare during his deployments. Now, the Upward program allows his wife, a healthcare worker, to continue working while he attends drills. He says: “If it weren’t for my wife, I would have had to stay behind during deployment without available services. When I was gone it was hard and expensive for our family. Now for the upcoming 4-day training I know I can utilize this new program for all our childcare needs.”
Upwards’ unique model expands the impact of the military childcare program even further. Since National Guard and Reserve members balance military careers with civilian jobs, Upwards can connect them to childcare benefits if offered through their civilian employers. This multiplies the support they receive, providing regular childcare search assistance, weekday care, backup care, and childcare for military duties.
One such beneficiary is U.S. Army Reservist Babiga Nembhard, who was able to receive covered childcare for her drill weekends through the program. Additionally, she received weekday childcare assistance through her partner’s Upwards childcare benefits offered by his employer, a delivery service company.
Nembhard highlighted the significance of this combined support, stating, “Having readily available childcare for military families would be able to get a lot more done where training is concerned.” The ability to leverage both military childcare assistance and employerprovided benefits through Upwards’ unique model ensured comprehensive childcare coverage for her family.
Future Outlook
Upwards’ model creates a virtuous cycle that strengthens the local economy. When childcare providers are at capacity and their administrative burden is lifted, caregivers earn dignified wages, stay in the industry,
participate in state subsidy programs. This combined support creates a stable childcare foundation, allowing workers to build secure livelihoods and thrive. Upwards is committed to fostering this collaborative environment, creating a
| White Paper 2024
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Contact: Anna Rasby-Safronova, Senior Public Relations Manager
Email: press@upwards.com
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