I Am Lean LLC

Daycare directors come in all forms. From those who work for large corporations with thousands of kids enrolled, to the home daycare owner with less than thirteen kids enrolled, to teachers seeking a promotion. However, many current daycare directors are really owners responsible to set the agenda for what and how goals will be accomplished in the center. As the visionary, the director can give themselves a pay raise in several ways. But before any of that can be discussed, the director has to first consider that they need to separate their role from worker to servant leader.

A servant leader is a manager whose work is to not do the physical work, but rather to support their team by providing the skill or resources needed to help them be successful. Home daycare owners have to realize that they need a team. Directors who are owners of centers have to realize that they have to take a supportive role and a major step back from doing the physical work.

Many Daycare Directors have worked their way up from teacher or home daycare owner to director of multiple centers. But yet, they are still working countless hours each month as a worker. This cannot continue to happen. A director who wants to make more money has to understand that making more money doing 40 hours of work a week is a bad deal. Trading time for money will always be capped because we each get 24 hours in the day and nothing more.

Your time is too valuable to earn only a 3% or 6% pay raise working as a director. As the visionary owner, you need to double or quadruple your salary to make your work count. In this article we’ll learn about the typical role of a daycare director, typical salary, benefits, and small things that can be done in the short term to increase pay. But we’ll also learn about ways lean concepts can help systematize daycare operations, to build a foundation for unlimited growth.

But before we get started, if you are new to I Am Lean, Welcome! I’m Ms. Tamara. I help daycare owners spend less time in the center to pursue other passions. If you are eager to dive deeper into this topic and get results faster I invite you to accept our free gift and book one of our live demonstration sessions / assessments.

What are the responsibilities of a daycare director?

The primary job of a daycare owner is to stop being the director and owner. Check out my article here to learn more about the job of a daycare director or owner and how to separate the two. Once step one is figured out, the childcare director is responsible for running the day-to-day operations of a daycare center. Their responsibilities include everything from managing the program’s budget to overseeing a team of daycare teachers.  

More specifically, daycare directors: 

• Hire, train, and develop new teaching staff 
• Establish an educational program that prepares students for preschool and beyond 
• Manage communication with families 
• Oversee the program’s finances, including tracking tuition and allocating program funds 
• Ensure the center operates in compliance with local, state and federal requirements 
• Maintain a safe and caring childcare environment for all students and staff

What is the average daycare director salary?

Daycare director salaries can range from $31,000-$78,000 per year, with a median pay in May 2021 of around $47,000 per year. According to the Bureau of Labor Statistics, the employment of daycare directors is projected to grow 8 percent from 2021 to 2031, faster than the average for all jobs. Over the next decade, an average of 6,400 childcare director openings are projected each year. 

In several online databases, the average salaries reported for “Child Care Directors” job titles were higher than those reported for “Daycare Directors” job titles, with discrepancies ranging between $2,000-$33,000 per year. 

While these roles are virtually identical, this data shows that centers that regard their work as “child care” rather than “daycare” may tend to skew towards higher compensation. If you’re an aspiring director, you may want to consider this when evaluating jobs. 

What is the average daycare director’s salary based on geographic location?

The average salary of a childcare center director differs based on geographic location, ranging from $38,400 in low-cost living regions to $70,470 in high-cost living regions in the United States.

Top paying states	Annual mean wage for daycare directors
New Jersey	$70,470
New York	$69,250
Massachusetts	$66,750
Connecticut	$65,260
Nebraska	$63,770

Source: U.S. Bureau of Labor Statistics, May 2021

The average salaries in the top paying metropolitan areas all top the national average. 

Metropolitan area	Annual mean wage for daycare directors
New York-Newark-Jersey City, NY-NJ-PA	$74,390
Vineland-Bridgeton, NJ	$73,080
Napa, CA	$70,330
Worcester, MA-CT	$69,430
Trenton, NJ	$69,370

Source: U.S. Bureau of Labor Statistics, May 2021

What is the average daycare director salary based on experience level? 

An entry-level daycare director can expect to make an average around $48,000 while an experienced daycare director with 7-9 years of experience can expect to make closer to $58,000. Data also shows that the average compensation for daycare directors typically increases with years of experience. 

Years of experience	Average daycare director salary
0-1 years	$48,199
1-3 years	$51,431
4-6 years	$54,714
7-9 years	$58,032

Source

What are some common benefits that daycare directors receive?

Daycare and childcare directors often receive benefits such as 401K, dental, health, vision, and life insurance, and paid time off. They may also have access to tuition reimbursement and professional development assistance to help them grow their skills and further their career.

If you are a director who is also the owner, it would be good to understand how to sign up for these type of benefit programs, their cost, and terms. Once you hear about the benefits of lean and how your earning potential can be limitless, you’ll likely want to take your rightful place as the owner and hire a director to run your center.

How many hours a week do daycare directors work? What is their pay per hour?

Most daycare directors work full time, clocking in 40 hours or more a week. Typically, childcare directors will work during their center’s open hours, which may include early mornings and late evenings if their centers offer before- and after-school care. 

Based on the median pay in 2021 of $47,310 per year, the average hourly pay for daycare directors is $22.75 per hour. 

How do I increase my salary as a daycare director? 

The wide range of daycare director salaries indicates that there’s room for increased pay based on years of experience, location, qualifications, and other factors. 

Here are a few ways you can invest in your own professional development, advance your career, and potentially make a higher salary as a daycare director. 

1. Advance your education.

1. A study by Zippia found that 56% of childcare directors hold a bachelor’s degree, 14% hold a master’s degree, and 19% hold an associate degree. Of the daycare directors who pursued higher education, 14% majored in early childhood education, 11% in business, and 13% in nursing.
2. If you’re just starting in your career or want to make a bigger investment in your education, consider pursuing a bachelor’s degree or higher and majoring in early childhood education, business, or other related fields. Having a degree will give you a competitive edge and allow you to negotiate for a higher base salary. To learn more about degree programs that could be a great fit for you, check out NAEYC’s Early Childhood Higher Education Directory.
3. Many schools and training programs also offer continuing education courses that could benefit both new and experienced directors. These courses cover a breadth of ECE subjects, from operations and financial management to following licensing regulations and daycare manager responsibilities. One popular program that many directors have benefitted from is the Child Care Education Institute (CCEI), which offers trainings for both teachers and directors. 

2. Attain NAEYC accreditation at your daycare center. 

1. NAEYC offers a widely recognized accreditation program that ensures childcare centers adhere to the highest national standards of care and education. The process for attaining NAEYC accreditation is rigorous, and less than 10% of childcare and preschool providers in the U.S. have achieved this recognition.
2. Many parents and families choose NAEYC accredited daycare providers because they know those centers will provide high-quality, research-based education for their children. For this reason, NAEYC accreditation can increase your childcare center’s brand recognition and visibility, which can in turn help to boost enrollment and provide a basis for charging higher tuition fees. Both of these factors can improve your daycare business’s profitability, helping you make more as a director (and increase the wages of your teaching staff, too). To learn more about how to get your program accredited, check out NAEYC’s Early Learning Program Accreditation resource page.

3. Pursue bigger career opportunities. 

If you’re a more experienced daycare director, there are a few ways you can advance your career and potentially make more money. For example, suppose you started as a daycare director at a public daycare center or a larger franchise. In that case, you could explore starting your own daycare center, so you have greater ownership over the business’s operations, vision, and scope. 

Suppose you’ve been with the same type of program for many years. In that case, you could also move to other leadership roles with greater administrative responsibilities, such as directing a program with a larger student headcount or multiple locations. 

If you’re wondering how much childcare teachers typically get paid, check out our guide, How Much Do Daycare Workers Make in 2022? 

4. Pursue Four Star Parent Aware Rating. 

Parent Aware promotes the importance of high-quality care and education programs and practices to all Minnesotans. They offer professional growth for childcare and early education professionals through cutting-edge, culturally-responsive training, education, and coaching.

Highly-rated child care and early education programs participating in Parent Aware Ratings are eligible for higher rates for quality: Providers with a Three-Star Parent Aware Rating are eligible for up to 15 percent above the standard maximum rate, not to exceed the provider charge. Providers with a Four-Star Parent Aware Rating are eligible for up to 20 percent above the standard maximum rate, not to exceed the provider charge.

This rate increase could mean a 20% bump on 80% of the kids in your care. If you are a home daycare owner, moving all of your kids to a center with this four-star rating means you can double your income with no additional work. This is because home daycares are limited at the rate they can charge. Moving to a center means you can charge higher rates then get the 20% bump at the higher rate.

This is a sure way to increase the earning potential of your daycare.

5. Obtain Other Accreditations

Many states will pay higher rates for childcare that meets quality standards. Check your state’s statutes to see which accreditations they accept to allow your childcare to receive 15% higher rate for quality care.

In Minnesota, Minnesota Statute 119B.13, subd. 3a & 3b, is the legal authority to allow daycares with any of the following accreditations eligible for the 15% higher rate for quality:

• Accredited Professional Preschool Learning Environment (APPLE) for Early Childhood Education or School Age Programs
• American Montessori Society (AMS) School Accreditation
• Association of Christian Schools International (ACSI) Accreditation
• Association of Montessori International – USA (AMI) Montessori School Recognition
• Cognia (formerly called AdvancED) – Early Learning Accreditation
• Council on Accreditation (COA) – Child and Youth Development – Early Childhood Education (CYD-ECE) Accreditation
• Council on Accreditation (COA) – Child and Youth Development – Out-of-School Time (CYD-OST) Accreditation
• Council on Accreditation (COA) – Private Early Childhood or Youth Development
• Green Apple Accreditation of Children’s Services (GAACS) – Early Education Center (EEC) Accreditation
• Green Apple Enrichment Program Accreditation (GAEPA)
• Head Start Performance Excellence and Quality Recognition Program
• Ignite SAC Interim Accreditation Program*
• Minnesota Afterschool Accreditation Program (MAAP)
• Minnesota Nonpublic School Accrediting Association (MNSAA)
• National Accreditation Commission for Early Care and Education Programs (NAC) Accreditation
• National Association for the Education of Young Children (NAEYC) Accreditation
• National Early Childhood Program Accreditation Commission Inc. (NECPA) Accreditation
• National Lutheran School Accreditation (NLSA)

6. Stabilize Current Income Streams

Receive Payment or Written Authorization Upfront

Before you consider earning extra income, lets ensure you have stabilized your current income. For example, it’s a hard lesson to learn if you don’t require payment upfront. Yes. Many directors have suffered months of not receiving payment for daycare. This is because payment could be coming from supplemental sources such as county programs or scholarship awards. Always, as a standard require cash payments up front and/or a written authorization in hand from any source other than cash.

These days, a verbal authorization is not enough to ensure you will receive payment because there could be multiple workers involved with a county or scholarship programs who give conflicting verbal information about a parent’s eligibility. Before you provide any care, ensure that you have the written authorization which states the number of hours, the rate, the dates authorized, and the name of the child. All care expires on the date of the authorization at which time cash is due upfront for each week of additional care.

Set Fees to address Inflation, Staff, and Supply Costs

Now then let’s discuss your fees. Each year, for your license, you have to pay someone or spend time going through each child’s account, paperwork, immunizations, food information, and other records. Your staff expects pay increases. You also may plan seasonal activities outside of the normal care of service such as field trips, summer water park events, or even graduation. These costs have to be recovered for the business to stay in business.

If your daycare is not charging an initial application fee, once-a-year registration fee, summer activity fee, and annual rate increase, consider this a great place to stabilize. Parents understand as they too expect to receive pay raises each year as the price of many goods and services increase.

Use Lean to Maximize Your Food Reimbursement

Next you have to maximize your food reimbursement. There is nothing worse than knowing you are eligible to receive payment, but not get the benefit of it. It will take learning about lean for you to capitalize on this action item. But essentially, you need to create documented processes to teach staff how to manage food and documentation of children’s food accounts. Check out my ebook on How To Write Good Work Instructions for help with this step.

Then you need to establish time management sheets for staff responsible for collecting receipts, tracking kid accounts, ordering food, etc. These sheets are called leader standard work. Check my Facebook video for an overview of what it is. You can send me a request for an in-debt training video of Leader Standard Work.

Once this is done, you need to hold teachers accountable for entering in attendance at the time of service. To achieve this requires there to be good training books and training plans in place. Our company writes your training books for you so that all staff is trained in the exact same way and held accountable for the work they do.

Establish Lean 5S

To stabilize current income streams, you need to establish a lean 5S program to help your staff find anything in 8 seconds or less. 5S will cut down on inventory you have to purchase, wasted items, and bring efficiency to your center. The S’s stand for Sort, Straighten, Shine, Standardize, and Sustain. My favorite 5S video is from Gemba Academy and available on YouTube.

Host a 5S workshop for your staff. Plan 4 hours to just clean and learn, clean organize, and learn some more. Getting all the staff involved will be a great team builder. Training them on a skill they can use forever will help stabilize your staff retention.

Stabilize Your Staff

Hiring staff and finding good talent is daunting in itself. Childcare is so highly regulated with the background checks and lower wages that it’s difficult to obtain highly qualified staff willing to work in such a stressful environment, at times. Once you find those amazing people you don’t want to lose them. The best way to retain your staff is to establish a lean continuous improvement program.

Continuous improvement is like an idea program. Your staff has voice to share their thoughts and opinions about all things operations, or marketing, or finance, or maintenance, or food program, or facilities, etc. Whatever work they do, as the experts of that work, they have the right to improve it.

People just want to be heard and feel appreciated for the work that they do. Daycare is one industry where this concept matters the most because 80% of all other jobs pay more than daycare. Daycare staff are passionate about working in daycare for something other than the pay.

Establish Lean Tiered Management

Tiered Management is a lean program that starts with putting the people who do the work at the highest tier of the organization. Those staff are given standards to meet, and they collect data to show why the standards can’t be met. Staff then sends information and requests for either money or a skill to the tier who supports them. Each supporting tier focusing on the biggest program of given to them. Whatever they can’t figure out they give to their supporting tier either requesting money or a skill to help them. This repeats until the owner’s tier is reached.

Owners who this type of system only has to dedicate 15% of their time running the operations of the business. That is 32 hours of time freed up. If a Director who is the owner of a daycare decides to open up one additional location that has two classrooms of each age group, the revenue generated will be $1,000,000 and the profits will be $400,000.

Tiered management is based on having a strong strategy written and executed for your daycare. Check out my ebook: Better Family Daycares Strategy for help with creating a Strategy for your business.

Establish New Sources of Revenue

Now that you have stabilized income sources, consider adding these options or better yet ask your staff through their continuous improvement program which ideas they can come up with to bring in additional revenue.

Take caution if your daycare is a non-profit

Directors of daycares that are non-profit can give themselves pay raises in unlimited ways. This section says to take caution because having lots of income without having lean principles, such as respect each individual or creating value for the customer, can hurt the culture of the daycare, lessen staff job satisfaction, and deliver inefficient quality that parents will notice.

One Major Way is By Using Grants

Grants are also available to for-profit daycares. For example, during the Covid Pandemic, millions were distributed in forgivable PPP loans and stabilization grants to help all daycares weather the storm. Grants can come from any number of sources such as the city, state, county, or federal government, local foundations, businesses, or other non-profits.

Receiving this large pay raise may help to hire additional staff to cover up problems, but it can not fix foundational gaps such as staff who don’t have problem solving skills or a voice to speak through continuous improvement.

Having a grant writer on staff could pay for itself seven times over. Otherwise, a director could write grants themselves or use their business manager to try to find and apply for grants.

Partner with a local restaurant

Local restaurants could offer anyone who makes a purchase on a certain day, during a certain window of time, a discount of 20% off their order. A portion of all proceeds earned during the event could go to benefit the daycare. Pizza restaurants, submarine restaurants, locally owned franchised restaurants, etc. can give your daycare this bump in income once a month. It’s a great collaboration between local businesses who share common parents, clients, and the goal of ensuring the well-being of children.

Partner with a local sports team

Sports teams such as your city baseball team, football team, soccer team, or basketball team like to keep strong ties to the community. Why not with your daycare? Sports teams can offer discounted tickets to an event on a certain day. A portion of the proceeds will go to benefit your daycare.

How can I prepare for daycare director interviews?

During the daycare director interview process, you can expect to answer general and in-depth questions such as:

• Why are you leaving your current job?
• Why do you want to work for our daycare center?
• What are the most difficult aspects of working with kids?
• What are your goals for the center should you become the director?
• What’s the best way to create an engaging and stimulating environment for children? 
• What are some differences between caring for infants, toddlers, and preschoolers?
• When’s a time that you dealt with a difficult parent, and how did you handle the situation?
  
   

Expect to also answer questions regarding your certifications, licensing procedures, and previous experiences working with children and interacting with their parents. Remember that you’re also interviewing them to ensure that the opportunity is a good fit. Be prepared to answer these questions openly and honestly, but also come up with your own questions about the daycare center, job expectations, benefits, salary, and growth opportunities. 

Ask them what lean programs they have in place or have heard of. Ask them if they have a 5S program or a Continuous improvement program. Ask them if they are using leader standard work for time management of staff tasks and responsibilities. See if this is something they are open to you trying out to bring efficiency, if needed.

Pursuing a career as a daycare director

If you dream of owning a daycare or furthering your career in childcare, be sure to understand what responsibilities are required for the operations of the business including strategy, standardized documentation, and lean training and onboarding plans. Also understand how not only your experience and education will impact your salary, but also how your treating staff well, training them to be process improvers, and listening to their ideas could earn you higher wages as well.

If you are eager to dive deeper into this topic and get results faster I invite you to accept our free gift and book one of our live demonstration sessions / assessments.