Costs: Part 5 - Temporary Staff - To the bank

Use of temporary staff is now seen less as a ‘fire-fighting’ strategy for emergencies and more as an everyday necessity to keep nursery businesses running smoothly.

The drop in new candidates coming through as Level 3 early years educators – which has reduced by 30 per cent in a year, according to analysis by Cache – has intensified recruitment challenges and compounded the need for using bank and agency staff as a way of providing cover. While agency staff are employed directly by an agency, bank staff are a pool of people who tend to be employed directly by the nursery on an ad hoc basis.

For cash-strapped settings, building up a little black book is also a way of responding to fluctuations in demand.

At Acorns Nursery, part of Oaklands College in St Albans, manager Wendy Taylor has been battling to fill five vacancies within her 18-strong team. ‘We do use a number of bank staff. This is not ideal but it has been the only way we can fulfil our legal requirements regarding ratios. The majority of bank staff we employ are known to us and come on a regular basis. Often they are mums themselves and only want to work part-time or term-time only. They go through the same rigorous interview and vetting processes and have the same benefits, including pension enrolment.’

She adds, ‘One of the benefits they bring is they are usually very reliable and don’t have much sickness. However, they can’t always be as flexible as we would like and often have either another job or family commitments. This can be a problem when trying to get every­one in one place for a staff meeting. We don’t have any problem using their time efficiently as we rely heavily on them to meet the ratios and they are very much a part of the team. They all bring skills and qualities that complement our full-time members of staff.’

COST OF AGENCY STAFF

Putting aside the potentially negative effect that unfamiliar agency staff can have on the quality and continuity of care for children, their cost implications are the biggest concern for nurseries. Some nurseries go to a good deal of trouble to develop this little black book to minimise spend on expensive agency fees. At the London Early Years Foundation, chief executive June O’Sullivan corroborates that agency costs are rising all the time.

‘We have a list of agencies which we use and rates are usually at around £12 an hour,’ she says. ‘However, last week one of my staff reported that an agency she had contacted was quoting £19 an hour. Because of the Government’s unworkable policies relating to qualifications and workforce, the situation is not going to get any better, and because agency staff are increasingly in demand, the rates will continue to go up.’

Most agencies are registered for VAT, which means that on top of the labour charge there is a 20 per cent VAT charge over the temporary person’s whole contract. Nurseries cannot reclaim this and it represents a big hit.

Employers also have to ensure agency staff are up to speed in terms of skills, particularly in respect of paediatric first-aid training, now a requirement for all newly qualified nursery staff, and in areas such as safeguarding and health and safety. Many view spending money on training agency staff as ‘losing’ money.

However, using an agency can offer certain advantages – providing guaranteed cover at short notice, for example. David Hewitt, head of employment law at legal services company Citation, says, ‘The agency does the ringing round, is responsible for the DBS check and the payroll. However, agency workers come at a premium, so a nursery’s overheads will increase. Agency workers take time to fit in, however good they are, and there is no guarantee that the same individual will be back next time.’

 One of LEYF's nurseries

ON OR OFF THE BOOKS?

For those nurseries using bank staff, there is always a temptation to save on administration costs by leaving them ‘on the books’. This means that when the nursery next employs them, they don’t have to enter them on the payroll again. Mr Hewitt says, ‘This avoids having to fill in a P46 every time they start, a P45 every time they finish and giving them a different payroll number on each occasion.’

A potential problem here is that a temporary worker could acquire an ‘overarching contract’, where they could effectively be classed as a permanent employee with no contractual hours. As their length of service builds up over time, so do their employment rights.

‘If an employer leaves them on the books they remain on the payroll even if they are not working,’ says Mr Hewitt. ‘After two years they will build up certain rights, such as the right to redundancy and the right to claim unfair dismissal.’

In his experience of the sector, he has found the risk of bank staff being found to have an overarching contract is generally considered a commercial risk worth taking. ‘In most cases, nursery employers have good relationships with bank staff, and as long as this endures there is unlikely to be a problem,’ he says.

CULTIVATING AGENCIES

While Ms O’Sullivan says she would never bring in agency staff for any of her baby rooms, she believes that agency services will always have a role to play, and that providers should take responsibility for ensuring temps receive all the support they need.

She says a lot of time can be saved by ensuring a good induction process, whether it is for an agency temp or a refresher for bank staff. This should include things the individual needs to think about from the outset, such as who is the first-aider, what the evacuation procedure is and details of any children who need special observation. ‘It is a good idea to build a good relationship with at least a couple of agencies because there will always be a time when you are going to need them.’

Oaklands College’s Acorn Nursery has also used agency staff in the past few months. Ms Taylor says, ‘We have built a good relationship with one local agency and the quality of the staff they send us is generally very good. We make sure a senior or experienced member of staff supervises the agency staff and makes sure they are used efficiently. We also ask for specific people if we know they are proactive in their practice and fit well into our team. I don’t ask any agency staff back if they have not fitted into the team or are not demonstrating good practice.’

Meanwhile, Ms Taylor reports that her current staffing picture is looking brighter. ‘I have now managed to appoint two full-time staff and one part-time member. They were all people I either knew or had been recommended to come to us by the college.’

She adds, ‘They won’t be in place until the middle and end of October, so there will be a few more 50-hour weeks for me until then.’

FURTHER INFORMATION

• DfE Review of Childcare Costs(2015), https://www.gov.uk/government/publications/review-of-childcare-costs

• Ceeda (2014) Counting the Cost: An analysis of delivery costs for funded early education and childcare, https://www.ceeda.co.uk/news/our-latest-research-findings/counting-the-cost

• www.nurseryworld.co.uk/nursery-world/feature/1156409/nursery-management-business-costs-cocktail

AGENCY VIEW

Hannah Gramson, operations director, Tinies, Surrey and South London

‘Our emergency mobile is turned on from 7.30am to 7pm and we find that 90 per cent of the time we are able to meet requests for same-day temporary staff. Some of our clients have been with us 15 years, since this office opened, and we have a great working relationship. Often they will say the name of the room in the nursery that has a staffing gap, and I will know from that what is required.

‘We work together with clients on long- and short-term solutions, whether it is for a Level 3 practitioner to provide cover for eight weeks’ sick leave or for same-day, emergency cover from nursery assistants to degree Level 6.

‘We adhere to strict protocols with all our supply staff. In addition to DBS and qualifications checks, verbal references are secured going back three to five years. Our bank of supply staff is sizeable and expands in the summer months when students and teachers take on temporary work. We currently have 70 supply staff covering ad hoc emergency requirements, and in the holidays this could go up to 80-100, with students and teachers.

‘Pay varies according to individuals’ experience and qualifications, and we are happy to negotiate to work with budgets.’