Nanny vs. Daycare: What to Consider

As parents head back to the office, who will care for their children becomes an important decision — one without an easy answer. Often, it comes down to nanny vs. daycare. Which is better for the child? Which works best for the parents?

When choosing whether to hire a nanny to care for your child in your home or place your child in a daycare facility, there are several considerations. Here are some factors to consider in your decision-making process.

1. Cost

We probably do not need to tell moms and dads this, but childcare is costly.

The average cost for placing two children in a daycare center is at least 25% more than the typical rent in every state in the US and exceeds annual typical mortgage payments in 45 states, plus the District of Columbia. Nannies are also getting $2-4/hour more than usual since the pandemic.

After making a monthly payment towards a mortgage or rent, childcare is often the next most significant expense for a family. Before deciding on a nanny vs. daycare, determine how much you can spend on childcare.

Nannies may be slightly more expensive than a daycare center, but they offer more flexibility and other advantages that could compensate for an increased cost. For example, if your child is sick, they cannot go to a daycare center, and you will need to find and pay for backup care. A nanny can still come to your home to watch a child who is ill.

Also, daycare centers may charge more for infants.

Starting a nanny share – where a nanny cares for the children of more than one family in one of the family’s homes – is a great way to reduce the costs of in-home care. Each family pays two-thirds of the nanny’s typical rate in a nanny share.

2. Timeline

The next biggest consideration for childcare after cost is finding care. During the pandemic, many daycare centers closed or opened with limited staffing, reducing the number of children they could take and creating months-long waiting lists.

This is also a competitive nanny job market. Even a few years after the height of the pandemic, the demand for nannies has continued to be strong.

While trying to get into a daycare center is a matter of playing the waiting game, proactive families can speed up the hiring process when bringing on board a nanny. While offering a highly competitive hourly pay rate will help, it is not always about the money. A family that presents as a desirable employer has a significant advantage in the job market. In a recent survey of nannies by GTM Payroll Services, working for a trustworthy/ethical family and the family’s personality were more important to them than the pay rate.

However you choose – nanny or daycare – build in extra time to adjust your child to someone else’s care. Have your nanny spend some time with your child for short periods before they begin regularly caring for your child. You can participate as well to help ease the transition.

With daycare, the first day you drop off your child should not be the first day they see the center or meet the staff. Visit the daycare center weeks before your first day to introduce your child to the facility and personnel. That will help your child feel comfortable and safe right from the start.

3. Your schedule

While you want to put your child first in any caregiving situation, your choice ultimately must work with your schedule. Daycare centers have set schedules and may charge extra for early drop-off or late pick-up. What if you only need care two or three days a week? What if you only need care in the morning or just in the afternoon? A daycare center may still charge you full price, even for part-time care, as you are taking a spot from a child who could be there five days a week.

You may have better luck finding a nanny who can fit a quirky schedule. A college student may work for you on days they do not have class. Or a nanny may be looking for just part-time work as they go back to school or work a second job.

Our recent survey of household employers asked what they like best about having a nanny. Schedule flexibility and no hassles of daycare drop-off and pick-up were among the top three reasons.

4. Back-up care

What happens when your child is sick? You cannot take them to daycare. Do you have backup care, or must you take time off from work? Can a family member, friend, or neighbor come to your house and watch your child while you go to work?

Through frequent exposure over the long term at a daycare center, your child may develop a strong resistance to germs. However, that could mean a lot of days home sick.

A nanny can still come to work even when your child is ill, allowing you to go to work as normal. However, if your child – or anyone in your home – contracts COVID-19, your nanny should stay home.

Your nanny can call in sick, and you will be stuck finding backup care for the day. They will also have paid time off, like vacation days, when you will need to find childcare.

5. Social interactions

A daycare center has built-in social relationships as your child develops critical skills by interacting with other children (and adults) throughout the day. They will learn and grow with other children and develop emotional intelligence and language skills.

A daycare center with many kids and toys can also be loud and overstimulating for a child. What’s your child’s personality? Would they be overwhelmed in this type of environment?

With a nanny, you can control the environment, but you may need to plan and communicate a little more to ensure your child gets the socialization you desire. It starts in the interview process. If social interactions for your child are essential to you, ask questions of your candidates about how they see a typical day with your child. Do they mention going to the library for storytime or other out-of-the-house activities? Do they seem comfortable with playdates? Once you have hired a nanny, communicate regularly with them about ideas to keep your child socially active. Maybe you saw something new at the children’s museum. Or leave your nanny with some petty cash to take your child to lunch. Giving your child social interactions with a nanny can work. It may just take some planning.

A nanny share could also provide social connections for your child as you join another family that ideally has similarly aged children.

6. Personal attention

While a daycare center may provide social interactions, it may not provide the personal attention you want for your child. There can be high turnover in personnel at a facility so your child may not make strong connections with any of the staff during their time at the center.

A nanny provides one-on-one care for your child, and you will have more control over how a caregiver works with them and your child’s schedule. Nannies can be an extension of your parenting style and reinforce your values. Ideally, a nanny will care for your child for years, creating a deep, personal bond between caregiver and child that can continue even after your nanny stops working for your family.

7. Education

A daycare center may offer an early childhood program that focuses on the skills that can prepare your child for preschool and beyond.

If this type of preparation is what you want for your child, you can hire a nanny with an early childhood education background. During the hiring process, ask about the learning and skill-building activities a caregiver would bring into your home as they care for your child.

By knowing what you want in a nanny and asking the right interview questions, you can find the ideal caregiver for your child.

8. Licensing and credentials

Safety is a top concern for parents. Daycare centers are staffed by vetted, licensed caregivers. Facilities need to meet state safety regulations to stay open and operate. Before placing your child in a daycare center, make sure its license is up to date and check for any complaints made against the facility. Ask if they have been accredited by the National Association for the Education of Young Children (NAEYC).

When hiring a nanny, include the credentials you want in a caregiver in your job description. First aid and child CPR are typical trainings taken by nannies. Organizations like the International Nanny Association offer exams for nannies to become credentialed so families know that their caregiver understands safe and healthy ways to care for their children.

As part of the hiring process, run a background check and call the references provided by your candidates. These steps can help you assess your nanny’s abilities to keep your child safe while in their care.

Nanny vs. daycare research

The National Institute of Child Health and Human Development (NICHD) Study of Early Child Care and Youth Development analyzed the relationships between childcare experiences, childcare characteristics, and children’s developmental outcomes.

It looked at the long-term effects of different types of childcare arrangements, including in-home care by a nanny or relative, center-based care, and home-based care in the childcare provider’s home.

The major goal of the study, which included more than 1,000 children, was to examine how differences in childcare experiences relate to children’s social, emotional, intellectual, and language development and to their physical growth and health. The study began in the early 1990s and followed children from birth until the age of 18.

The study found few differences in development between children cared for by a relative or nanny in the home versus children cared for in group settings (center-based or home-based childcare).

Children in center-based care were more likely to acquire ear infections, respiratory infections, and stomach bugs than children cared for in their own homes. However, these children in center-based care likely received a boost to their immune systems as they were less likely to come down with respiratory or stomach illnesses between the ages of three and four-and-a-half.

The biggest impact on child development

The NICHD study found that parental and family factors like parent education, home environment, and the quality of the parent-child relationship have a much more significant impact — two to three times greater — on a child’s development than the type of childcare.

Nanny vs. daycare?

Deciding between a nanny or daycare will depend on what you think is best for your child and works for you. Each will come with its benefits and challenges. Some questions to think about:

• How flexible is your work schedule?
• Do you have a set work schedule, or do your hours vary?
• What will your commute be like with a daycare drop-off?
• How much childcare do you need? Full-time or just a few days a week?
• What can you afford to pay?
• Are you ok with having someone in your home all day during the week?
• In which environment will your child be most comfortable?
• What do you hope your child gains from their childcare experience?

Think about those questions. Create a list of pros and cons and make a decision that you can feel good about.

GTM can help

If you decide that a nanny is the right childcare option, you will become a household employer. This is where GTM Payroll Services comes in to help remove the worries and hassles of household employment, from paying your nanny with direct deposit to remitting the proper taxes on time, every time, to taking care of year-end tax forms. It’s a comprehensive service for busy families who would rather spend time doing the things they love in life than figuring out payroll and taxes. To learn more, call (800) 929-9213 and speak with one of our household employment experts. They’ll answer all your questions in a complimentary, no-obligation consultation. Or schedule time with us at your convenience.

Hiring a nanny?

Download Your Guide to Hiring a Nanny. This guide outlines the steps to hiring a nanny the right way and maintaining a strong relationship with your employee.