Incentivize Talent with Better Pay

The Challenge

ECE staff earn less than most retail or fast-food workers, and the result is predictable: many leave for better-paying jobs. Programs lose 25 to 40 percent of their staff annually, disrupting operations and undermining the stable environments children need to thrive.

Parents can’t trust just anyone with their children, but the people they depend on can earn more almost anywhere else. Constant turnover forces parents to miss work or quit entirely, while children lose the consistent relationships essential for healthy development.

Most ECE programs are small businesses with razor-thin margins, so they can’t solve this problem on their own.

The Strategy for States

States have a key role in making compensation competitive — using market-based tools to keep skilled staff in the field without creating new government programs or disrupting the market. They can:

  • Adopt pay scales in state-contracted programs that reward skill and dependability

  • Offer tax credits or wage supplements to boost take-home pay

  • Open state employee benefit pools for health insurance and retirement to ECE staff

  • Encourage public-private partnerships where local employers help stabilize ECE for their workers

  • Support small ECE businesses in building the financial stability needed to offer competitive wages

The goal: Create compensation that keeps talented staff in the field — strengthening the small businesses that make ECE work and preserving parent choice.

Why This Works

Employers need reliable employees, parents need programs staffed by trusted adults, and young children need stable relationships for healthy development. But programs can’t deliver any of this without skilled staff who are paid enough to stay. 

States can help with targeted, market-friendly pay strategies that:

  • Attract and keep the skilled staff parents trust, cutting costly turnover

  • Give parents dependable programs and children the consistent relationships they need for healthy development

  • Strengthen the capacity of small ECE businesses to compete for talent and provide dependable programs for families

  • Use multiple tools — tax credits, partnerships, and existing systems — instead of one-size-fits-all funding 

The result: This approach maximizes public dollars by strengthening local markets, not growing government. It keeps families working, supports children’s development, and sustains the small businesses that power your state’s ECE system.

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