Staffing is the highest cost for early years providers, but without investment in people, quality is likely to take a hit.
Spending on staff accounts for at least three-quarters of costs, according to data from the Department for Education.
‘In every business or organisation I have run in early years, childcare or training, the highest cost has been staffing,’ says James Hempsall, managing director at consultancy Hempsall’s. ‘Not just pay and terms and conditions, but all the additional costs, such as recruitment, sickness, and learning and development. And in all of those experiences, the quality and care of staff has been directly related to the quality and care provided to the service user.’
The cost of cover
At Kids Planet, ensuring high-quality care while keeping costs down means making a deliberate choice not to use agency workers, drawing instead on its own bank of staff who are happy to cover irregular hours, and training staff internally through its academy.
‘We were paying agencies higher salaries for unqualified people and not getting consistency,’ says chief executive Clare Roberts. ‘So now every setting has its own supply team. These people understand our policies, procedures and approach, so they maintain our quality.’
Kindred Nurseries does use agency workers if ‘all else fails’, with HR business partner Sue Williams calling this ‘a necessary evil’.
Ensuring retention
A happy and healthy workforce further reduces costly reliance on external staff. With this in mind, Kindred offers staff healthcare assistance to help them access a virtual GP appointment and prescription on the same day, reducing time taken off work. The group also provides a financial wellbeing platform, with access to a financial adviser, pensions support and webinars on financial planning.
‘Rewards and recognition are really important,’ says Williams.
Roberts agrees that investing in retention is vital. With this in mind, Kids Planet increases annual leave by 25 per cent after two years’ service, gives staff their birthdays off work, and offers enhanced maternity, paternity, parental and adoption leave.
Kindred employs up to 80 apprentices across the group, another cost-effective way of staffing a setting and building a strong workforce pipeline for the future.
Investing in retention
Lisa Tray, director of Premier Early Years Training, says providers do not have to be large chains to boost retention by investing in staff.
‘We are seeing a lot of small chains and independent nurseries investing in courses for staff as an incentive,’ she explains. ‘It gives staff an area of responsibility and expertise and makes them feel valued.
‘It is difficult because training can be expensive. But there are options, like interest-free payment plans.’
At Kids Planet, all roles are advertised internally to attract staff members to a range of different positions across business areas to keep things interesting.
Kindred has seen nursery chefs supporting in the rooms and a room leader recently promoted to the marketing team.
Staffing solutions
There are other creative ways in which providers can address staffing costs.
Kindred’s central office in Kettering offers hybrid working to most employees, with some working fully remotely, reducing the costs of running an office.
Hempsall suggests that many settings could also look to audit the hours children actually use, as many are staffing hours they do not need to.
Changing attitudes
Providers are also having to respond to evolving approaches to work.
‘No-one stays in a job for life any more,’ says Williams. ‘Generation Z and Generation Alpha seem to want two years maximum and then they are looking to move on to the next thing. No-one is coming in and thinking they will stayin the same position for four years.’
As fewer staff want to work full-time hours, Hempsall recommends responding to their needs rather than fighting them, by building part-time roles.
Ratios
With such high costs for staff, some settings may be tempted to employ as few people as possible.
Since last September, nurseries in England have been allowed to relax staff: child ratios from 1:4 to 1:5 for two-year-olds. However, Aaron Bradbury, principal lecturer in early childhood studies at Nottingham Trent University, says the new ratios have had ‘some really damning effects’ on quality, safety and the mental health of staff.
‘Providers who have relaxed their ratios have suggested cost was a huge implication,’ says Bradbury.
‘The DfE says relaxing ratios is a choice, but for some it’s not.’
CASE STUDY: Sunbeams Day Care
Kirsty Lester, managing director of two Sunbeams settings and a Forest School in Dorset, says staffing is a huge issue across her provision, with a wage bill of around 78 per cent of turnover, not including agency staff costs.
‘Staffing is an absolute nightmare crisis,’ Lester says. ‘I could fill my baby room three times over but I can’t staff the nursery.’
Both Sunbeams settings use apprentices to help fill the gaps, but Lester says they are often unprepared for the reality of the job.
Staff can access a wellbeing programme which includes free counselling, but the company’s Christmas bonus has not been offered for three years due to costs.
Until recently, Lester was office-based, but she is now needed on the nursery floor to cover absence at least once a week. The setting also recently reviewed its opening times, realising that the majority of children were leaving at five o’clock, although staff were employed until six.
‘It’s much better financially as well as for staff wellbeing, because we were all so frazzled,’ Lester says.
Last term, Lester reconfigured staffing at one of her settings, including reducing a full-time deputy manager role to part-time to save money.
The setting has also started to apply ratios across the setting cumulatively, rather than per room, to combat staff shortages, and Lester suggests the 1:5 ratio may have to be used.
‘None of us wants the relaxed ratios, but with the way this staffing crisis is going, we have no choice,’ she says.
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