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Childcare Management Software: 4 Simple Steps to Calculate the Real ROI

It’s the ultimate Catch-22 situation: you know your processes are outdated, take too long, and cost too much—but you don’t have the time or money to do anything about it. 

Sound familiar?

Lucky for you, there is an answer. Childcare management software can both streamline your processes and give you more time to focus on building your ECE business. Plus, it’s easy to set up and if you use it right, the return on investment (ROI) is through the roof!

Ask any ECE business that’s already taken the leap, and they’ll tell you that once you’ve found the right software solution, the benefits are easy to see.

But what if you want to know whether it’s worth the investment *before* diving in?

We’ve created this in-depth guide to give you the numbers behind the need for childcare management software. Whether you’re a math lover or a hater, it’s time to grab your calculator, pull up a seat, and get down to business!

Table of Contents

  • 4 simple steps to figuring out the ROI of childcare management software
  • Step #1: Understand the time cost savings of childcare management software
  • Step #2: Figure out employee turnover rates
  • Step #3: Learn to speak the parents’ language
  • Step #3: Understand all your need-to-know numbers
  • Investing in childcare management software: Less is more.

Why invest in childcare management software?

Childcare management software makes life simple. 

From automating processes to helping you keep everything in one place, having great software on your side can be a game changer. Here’s why:

  • Better parent engagement: With everything on their plates, finding time to consistently engage in their child’s schooling can be tough for parents. Customizable surveys and real-time messaging centers mean Grade A communication (no more failed attempts at mind reading). 
  • Easy payments, on-time: The key to a healthy corporate budget is collecting payments in full and on time. Childcare management software means one-click payment reminders and 24/7 log-ins for parents.  
  • Hassle-free enrollment: Hello auto-enrollment, goodbye paperwork. Simple.
  • One place for everything: The best childcare management software offers full system integration. No more balancing one hundred and one different platforms.🙌
  • Less time on paperwork, more time for teaching: Flexible, shareable lesson plans, reporting templates and easy-to-use tracking means teachers can wave goodbye to admin pile-up. 
  • Increased employee retention: Better systems = happier employees. And happier employees tend to stay longer

4 simple steps to figuring out the ROI of childcare management software 

Step #1: Understand the time cost savings of childcare management software

We all know paperwork takes precious time away from quality time with young children. 

In fact, first-year kindergarten teachers spend almost a quarter of their 50-hour work weeks on admin duties. With average contract hours at 35 hours per week and so many teachers working more, it’s little surprise that today's educators have twice as much work stress as other US employees. 

But there is good news. With the right childcare management software, you can create streamlined systems that minimize that stress and let teachers do more of what they love and less of the other stuff. 

So, how much time and resources can you save, you ask? Let’s figure this out. 

Assuming an average cost of $3 per child per month with a program like LineLeader by ChildcareCRM, you’ll spend just $7.50 a week on the software for 10 kids.

Now, let’s say a smart childcare management software program could also help reduce childcare workers’ admin duties by up to 75%. 

Hours spent on admin with new software = 3 hours per week

Cost per hour = $11

Cost of program per 10 kids = $7.50 per week

3 hours x $11 per hour + $7.50 for software = $40.50 per week with child care management software.

This means a weekly savings of $91.50 ($366 per month!) or an ROI of 1220% for just one teacher using the new system. We’re not mathematicians, but that’s a pretty significant return! 

 

Step #2: Figure out employee turnover rates

We’ve all heard that happy employees = a happy business. 

And with early childhood workforce turnover rates now as high as 25%, supporting teachers is more important than it’s ever been. From minimizing workloads to maximizing efficiency, the right childcare management system can make employees’ lives easier, reduce teacher burnout and bring that turnover rate way down.

Let’s take a look at the math: 

The formula

Number of regrettable departures (ND) = No. of employees x Annual turnover %

Average cost of departures (C) = Cost of hiring + Cost of onboarding and training + Cost of learning and development + Cost of time with the unfilled role

Number of regrettable departures x Average cost of departures = Annual cost of turnover

Example

Let’s imagine a school has 10 classes with 10 children per class, and the cost of a childcare management software subscription is 100 children x $3 per week. That’s around $15,600 a year.  

Let’s say the school also has 20 employees with a 25% annual turnover rate. 

ND = 5 

Maybe the school spends $2,000 per person on hiring, $1,000 per person on onboarding, learning, and development, and loses $3,000 in productivity from the time it takes to refill a role.  

C = $6,000

The school’s annual cost of turnover = $30,000.

By reducing teacher burnout with smart childcare management software and retaining just an extra 20% of its teachers, that center could save $6,000 per year. That’s an ROI of 38%!

Step #3: Learn to speak the parents’ language

Girl on phone

If you’re an ECE pro, you know a successful school is all about parent buy-in. 

That’s why it’s SO important to get parents on your side by creating a great school experience for them and their children.

How? Engage them with technology. 

A huge 73% of millennial parents interact more with each other digitally than in real life, and 81% have shared a photo of their child on social media. In other words, millennials and tech go hand-in-hand.

So how can we break the benefits of high parent engagement down into hard numbers?

First, we’ll assume an average annual revenue per child. Let’s say it’s $3,000.

Next, we’ll need to know the potential revenue per family or the average number of children per family. The current US average is 1.779 children, but let’s round it up to 2 children per family. 

$3,000 x 2 = $6,000 per year

With just these simple numbers it’s easy to see that, by building great parent engagement, a childcare management software investment of $3 per child, per month ($156 per year) could double your revenue and almost 20X your investment. That’s an ROI of 1923% for just one child. 

Step #4: Understand all your need-to-know numbers

If you’ve crunched the numbers with us up to this point, you’ll see that childcare management software offers a substantial return on investment—and that’s only considering your time cost savings, reduced employee turnover rates, and boosted enrollment. 

Childcare management software is all about helping you do everything in one place—and every minute/cent you save adds additional ROI. 

For your final calculations, make sure to add up the time/cost of each business area and compare it to the time/cost savings with software. No matter what childcare management software you choose, it will almost definitely beat the clock. And, if you include measurements for things like how long it takes to enroll a new student, sort payroll or bring in unpaid tuition fees, the numbers will just keep adding up. 📈👍 

Investing in childcare management software: Less is more.

The cool thing about childcare management software is that it does every job in one place. From enrolling students to paying your employees, you only need to invest in one tool, instead of twenty. 

Of course, one tool also means just a one-time software set-up and one-time employee training. And, with a tool like LineLeader by ChildcareCRM, setup’s quick and easy, and the features are tailored to your ECE business’s most important functions.

It’s hard to deny the impact investing in early childhood education can have on your budget and your bottom lines. With childcare management software on your side, you can minimize your costs to maximize your time. It’s a win-win. 👌

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Meet The Author

Hope Dasher is a marketing professional with years of SEO content writing and social media strategy experience. Hope had a Bachelor's degree from The University of Texas at Dallas in Psychology and Child Development and an emphasis on language. She has extensive knowledge of the childcare system, effective marketing strategies, and copywriting. Hope serves as a Content Specialist for the Marketing team at LineLeader by ChildcareCRM.

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