Can any childcare workers explain how the money actually works?

[bumgripes]

Ratios 1:3 for under 2s. £83.50 a day at my nursery. 3 x £83.5 x 5 x 52 = every full
time worker is bringing in £57615 for the nursery. How is it that the employees are paid so badly, and nurseries are struggling to stay open? Not trying to be arsey, just curious about what I’m missing.

3 x £83.5 x 5 x 46, not 52, sorry. Although is it 52 because you have to pay for the whole year? I’m confusing myself now. But either way, it’s a lot.

Well - break it down. £83.50/number of hours (usually 10) = £8.35 an hour.

Out of your £8.35 an hour they pay for staffing usually NMW +30% for pension and employers NI and holiday costs. Plus the more qualified staff members (manager and deputy manager) are usually on a bit more.
Training.
Gas and Electricity.
Food (ours provides 3 meals and snacks every day)
Rent
Council rates (not subsidised)
Consumables - those paints and paper etc don't come free
Maintenance work
Gardener

Surely you can do the maths?

Also, Our nursery actually only has a total of 6 full timers in their care - the rest are all PT a few days a week.

@QforCucumber sure, but if the ratios stay the same and employees are paid pro-rata then each man-hour worked will bring in £25, no? I’ll take your word for the other bits, I hadn’t thought about food etc.

Our nursery is a ltd company - their accounts are easily accessible on companies house. They're barely breaking a profit for the last couple of years.

@QforCucumber thanks for the answer! I did assume there was something I was missing. But it’s not necessarily intuitive to grasp.

Nursery opening times are often 10 or 12 hours, so those 3 full time children actually require 50 or 60 hours of staff time, which is 1.6 full time staff. There will also be managers & admin roles that also need paying. Then all the food, nappies, heating, equipment, tax, national insurance, pensions, training, building rent, insurance etc.

Not everyone uses a full week, and they might not be able to fill a space eg. One nursery worker might have one child M-F, one does Monday and Tuesday, another does W-F, and a fourth does Mon-Thurs. There’s a day left over they’re not paid for but unlikely to be able to fill.

Then, nursery is open up to 52 weeks of the year. The nursery worked is entitled to holiday, so there’s got to be cover for that, which might have to be agency which comes at a premium.

DS’s do 3 meals plus snacks. They’re too small for using Brakes etc so have to order from Tesco and the price of food is going up.

They don’t get the same capped energy prices as domestic consumers.

Good nurseries need to pay for staff training, which again will come with time away from work.

Lots of reasons why most nurseries aren’t making record profits.

1. A full day at nursery is 10/11 hours, which would mean you need 2 staff to cover a full week of 50/55 hours. Don't forget you need to covering legal breaks too.
2. you rarely get (especially post covid) parents who book in full days 5 days a week all year round. So the staffing (which always has to be above legal ratios, never below) is often at points of the day above the minimum. Like, if you have 4 children after 3pm, you still need 2 staff.
3. ime wages are the biggest cost, but it's not just the wages paid to the staff, it's NI and pension contributions too, as well as the cost of absence and holiday pay. Increases to wage costs have been considerable over the last 12 months.
4. the other fixed costs are substantial. Rent, cost of training (making sure every member of staff and the setting is compliant with legal requirements of paed first aid, food handling, safeguarding, etc and renewed each year/2 years as necessary) These courses cost money and staff need to be paid for attending them, as well as paying staff to cover the person being trained. Insurance, membership of professional bodies, DBS checks, heating/lighting/energy bills - we all know what's happened there, phone bill, accountancy software. Etc
5. Consumables and costs of sales - art and craft equipment, food (which has increased in price by 25%), replacing toys and play equipment, maintenance of buildings and outside spaces.

If your nursery is a private company, you can look at their info with companies house. It's a requirement to submit accounts each year so you can see how much profit they're making and exactly where the money has gone.

I'm a childminder and work full time and ratios always full. I don't charge for my holidays.

Last year my turnover was c£27000.

Expenses were c£11,000.

My profit was c£16,000.

Does that sound a decent wage?