The lack of available quality child care has reached a crisis level in the U.S. — and Hampton Roads is experiencing it, too.

More than three-quarters of hundreds of Virginia employers surveyed in late August said child care availability was affecting their ability to recruit and retain workers and about 40% reported their workers were leaving their jobs because of child care issues. Half of employers said employee child care issues were negatively affecting their businesses. The Virginia Chamber of Commerce Foundation, the Virginia Early Childhood Foundation and the Federal Reserve Bank of Richmond conducted the survey to explore solutions for the state’s labor shortage.

Inside Business spoke with several stakeholders in Hampton Roads affected by or working in the child care arena.

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A mother’s frustration

When Tara Schillumeit’s workplace started requiring workers to return, she sought child care. The Williamsburg mother of three has been an auditor for the Department of Defense for 14 years. But she said everything in town had a six-month minimum wait and the cost was too prohibitive.

“It was hellacious and next to impossible,” she said.

Schillumeit said she reached out to the Equal Opportunity Employment Commission and was disheartened by the pamphlet they gave her. She said it had questions such as: Do you really need to work? Should you quit your job? Can you move?

Luckily, Schillumeit met and befriended a stay-at-home mother who now cares for her children. Her hybrid schedule includes two days a week in the Newport News office.

“Society as a whole and how we treat parents and families is absolutely abysmal,” she said.

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Staffing: ‘A constant struggle’

Mellessa Becerra, owner of Beach Montessori Christian Academy, said staffing is the biggest issue.

“For every position we fill, we lose somebody,” she said.

Open throughout the pandemic to serve emergency personnel and others, Becerra said the academy now has a wait list of students ages 7 weeks to 5 years.

“It’s a constant struggle to have adequate staff — let alone to hire additional staff that we can use to take more children,” she said. “We have probably 40 spaces available, but we can’t take the children because we don’t have the staff.”

In business for 21 years, Becerra said she’s licensed for 160 children, but has kept it close to 140 throughout the years.

“We just can’t get back to that,” she said.

With no-shows for interviews and workers quitting before they even start, Becerra said there’s no “method to the madness.” Becerra said Beach Montessori has incorporated employee incentives including dinner meetings, monthly gift cards for attendance and door prizes.

“Things to make a connection so they will be more loyal to us and not just go to the next place if they’re offered 50 cents more an hour or whatever,” she said. “That seems to be helping once we have the staff with us, but it’s just getting them to commit and come in the first place.”

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‘Part of our economic infrastructure’

Child care is grappling with a workforce crisis much like other service industries, said Lauren Small, a certified business analyst with the Hampton Roads Small Business Development Center. The coronavirus pandemic highlighted deep systemic issues within the industry, including incredibly low wages for demanding and critical work.

“There’s not going to be one solution,” Small said. “I think one of the most important things is for our business community to recognize that they need to be more engaged in child care; it’s part of our economic infrastructure.”

Small, also owner of Early Education Business Consultants in Virginia Beach and executive director for the Hampton Roads Shared Services Alliance, said American Rescue Plan dollars given to child care providers during the pandemic put a Band-Aid of sorts on the problem. In Hampton Roads, she said the funding enabled them to pay bonuses to attract staff and give their existing staff higher pay.

“But, is that sustainable with the current business model?” she asked.

Child care affects not only the workforce of today in terms of parents and families being able to go to work, but also the workforce of tomorrow since it’s a critical time in a child’s life for learning.

She said the alliance’s Childcare Director’s Leadership Academy, which started in September to shore up child care centers’ business models, had 100 independent operators sign up from across the region. Participants shared that the average employee turnover rate is at 38%, average starting pay for a lead teacher is $13.73 per hour and an assistant lead receives $12.05 per hour. Vacation time, health care and retirement plans are minimal benefits among the academy participants, if at all.

“With this pay, we’re attracting a younger, less educated workforce,” Small said. “ … We’ve had to compete with other service industries and we’re losing the battle. We can’t compete with Chick-fil-A and Target.”

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Employee benefit help

Chesapeake-based Dollar Tree offers employees a dependent care flexible spending account to help workers afford child care, said Courtney Muller, communications manager. The Internal Revenue Service allows money to be set aside tax-free up to $5,000 for individuals or $2,500 for married workers filing taxes separately.

Muller said the funds can be used to pay for care from a qualified provider at home for a dependent child, spouse or elderly parents or expenses outside the home for babysitters, nursery schools or day care centers.

Dollar Tree this year began matching workers’ pretax contributions up to $300, Muller said.

The retail chain has more than 200,000 workers throughout the U.S. and roughly 3,700 employees in Hampton Roads. Fewer than 28,000 employees are enrolled in full-time benefits and a small portion of its workforce participates in the dependent care FSA and qualifies for the company match, Muller said. Employees earning less than $100,000 per year are eligible.

“Our benefits team is always looking for ways to support the changing needs of our associates and their families,” she said.

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Virginia Beach works to find solutions

Barb Lito has been the GrowSmart coordinator for the Virginia Beach Economic Development for the past six years. But she said the city has been investing in early education for a couple of decades.

“I think that’s one thing that’s helped our child care centers be somewhat resilient during the past few years,” she said.

There are a total of 200 facilities in Virginia Beach, which includes 125 licensed child care centers plus religious-exempt and family home programs.

Lito said the biggest challenge is that many are not operating at full capacity because they are having a hard time attracting and retaining workers due to noncompetitive wages or other factors.

On the flip side, in order to pay child care workers more, they need to charge families more. And that’s a conundrum because families are already struggling with the cost of care, she said.

“When the child care industry isn’t working it affects all other industries,” Lito said. “Child care is a dual-generation workforce solution. It provides critical infrastructure support to our current workforce and also has an amazing opportunity to support the development of our future workforce.”

In support of that, Lito said GrowSmart offers targeted business support to child care providers to help stabilize staffing, increase capacity and focus on technology and automation adoption.

“Honestly, this is going to take some serious change,” Lito said. “We’re diving in and trying to figure out what we can do. This is not a quick and easy fix and it’s going to have to happen on every level — local, state and federal.”

Sandra J. Pennecke, 757-652-5836, sandra.pennecke@insidebiz.com