10% discount for Nursery worker's own children?

[Whose]

I'm opening a day nursery and approaching the recruitment stage. Word is out locally, but nothing official has begun.

A local lady has said she'd be interested and asked if there would be a free place given for her child, or at least a discount.

Profit margins are really tight and the childcare ratios lean, especially for Under 2s (3:1) which is the majority of the current demand.

A lot of the local staff available will have their own young children. I'm anticipating needing 6 members of staff initially, I wouldn't be surprised if all of them had their own children... meaning that I could be looking at 6 staff with 6 kids, leaving only space for 12 full paying places.

Would I be unreasonable to limit the discount to 10% for under 2s, and perhaps 15% 2 to 3 year old, 20% over 3s?
Or is that super mean?
Google shows a huge range.

If anyone has direct experience please let me know!

My DCs nursery offers 50% discount. Staff move on once child is at school. I guess for a min wage job that isn't too bad a turnover which is better for parents and DC who attend.
I think nearly all the staff have DC there though so I guess that means the job only attracts parents with young children.

I think you do need to be a bit careful about how many staff might have their own children. I would find it quite off putting if there were 18 kids and 6 were staff members’ children. I’d worry the others wouldn’t be getting the same level of attention or care and the dynamics could be a bit odd.

It’s a really bad idea all round.

It’s bad enough when you have one member of staff in a nursery with their own child, never mind 50% of your workforce. The trouble it will cause will do you in, and that’s without taking into account the financial hit.

Don’t do it - you will live to regret it!

Think about the politics between the staff if staff-member-parents are not happy with the care their child receives.
Plus, add the fact the staff are generally very young and disputes between staff are tricky enough to manage without their own children coming into the mix…….

Offer a discount then after a year of continuous service they get a small increase. Staff retention can be a huge issue. Salary sacrifice would be way to go too

Sorry, OP, i derailed your thread a bit. No doubt you've done your market research and are confident of making a go if it. If you're prepared to offer part time or job share then you have a good chance of attracting more mature staff with older (or grown up) children who want to work but not 40+ hours.

Good luck.

When I worked in a day nursery (part time) I got 10% off but only on days I was on the rota to be working, and then if I was called in to cover absence on my days off then I wouldn't pay at all for childcare because it was seen as 'helping out'. The pay was really low though - think 5p/10p more an hour than minimum wage.

It’s 50% at ours but they have a capped number of staff places per room.
It’s a small nursery with 2 sites, not a large chain.
There’s actually not that many staff children there, most of the staff are older with a few very young without children.
Full time staff work 4 days (10hrs/day) which helps with their own childcare as they don’t need 5 days.

Be careful with salary sacrifice, if it takes the new gross pay to below nmw equivalent then you can be fined for not paying minimum wage, therefore you'd need to pay well above to account for the loss.

In both the nurseries we've used over the last 6 years (both small, 8 staff members in one and 6 in the current one) only one person has had children in the nursery, another had theirs collected as after school club.

At our current nursery the manager has secondary age kids, then there's 2 ladies in their late 40s who have worked there over 10 years and the others are young working alongside uni study.

I work at an independent school and our fee reduction depends on the length of service. Up to 2 years gets 30% off, 2-5 years it's 50% off and if you've worked for them for 5+ years, it's 70% off. However, we have several schools across the country and you can also move between them and keep your benefits. Our nursery section has over 100 children on my current campus alone, though.

I think some kind of discount is good. Or if not make sure pay is good. I worked at a nursery with my daughter, to be honest if I were you I wouldn't want all the employees children there. It was a bit of a nightmare, she didn't settle and would be upset every time she saw me as wanted me. Obviously all children are different though! Also my take home pay wasn't much after paying for the fees xx

10-15 % for under 3's then waive additional charges from 3 if they claim the 30 free hours perhaps?

@yourestandingonmyneck

Children aren't marginalised, it's just we expect parents to pay for the children they have (should be both parents btw, too many dads get off scot free). I took a huge cut in household income to stay at home, we lived in a one bed flat, no car, no pay tv, no mobile contract and took work I could do with dd at home - I kind of begrudge subsidising others because there's no magic money

[quote gogohm]@yourestandingonmyneck

Children aren't marginalised, it's just we expect parents to pay for the children they have (should be both parents btw, too many dads get off scot free). I took a huge cut in household income to stay at home, we lived in a one bed flat, no car, no pay tv, no mobile contract and took work I could do with dd at home - I kind of begrudge subsidising others because there's no magic money [/quote]
Thanks @gogohm, but that's not what I'm meaning.

I pay extortionate nursery fees myself. And am happy to do so. The bit that doesn't stack up is the low wages that actually make it to the nursery workers.

And this doesn't appear to be huge greed on the part of nurseries - as stated on this thread the margins are incredibly tight.

At a ratio of 1:3, and a daily rate of £50, a small nursery of 18 kids would take £900. 6 staff on NMW would cost around £600 (rough calculation allowing for employee NI and euro enrolment contributions). On top of this additional staffing costs, for example a manager. Then rent, insurances, utilities etc.

The margins really are incredibly tight, but if fees rise, it just wouldn't be feasible for many families to afford childcare.

It just seems like everybodies got it tough - parents are paying a lot of money in fees, but these only stretch to paying NMW. Everybody wants their children to have the best possible care, but it's so hard on these nursery workers who are doing an important and demanding job for little pay.
Finally, I've had the misfortune to come across a few people who really shouldn't be in childcare, but they've got the job because of lack of applicants due to the poor wages. This then impacts on the children.

So yes, I do think some government intervention in this area would not be unreasonable, and it's not out of concern for myself or my own finances.

Excellent post @yourestandingonmyneck.

@gogohm - your post is a bit Four Yorkshire Men in tone. We're arguing for better Early Years provision for children and better pay and conditions for staff. What's wrong with that? You say we expect parents to pay for their children but they are educated for free until they're 18 and are cared for by the NHS for life. Why shouldn't we support care and education of under 4s.

@AmanitaRubescens

Excellent post *@yourestandingonmyneck*.

@gogohm - your post is a bit Four Yorkshire Men in tone. We're arguing for better Early Years provision for children and better pay and conditions for staff. What's wrong with that? You say we expect parents to pay for their children but they are educated for free until they're 18 and are cared for by the NHS for life. Why shouldn't we support care and education of under 4s.

Couldn't agree more with this,

TBF @gogohm I took a huge cut in household income to stay at home, we lived in a one bed flat, no car, no pay tv, no mobile contract

we grew up in a household like this, DM didn't want to work as wanted to stay at home with us (I don't know what childcare etc was like then in her defence) - but that actually ended up being to our detriment. I was the oldest and couldn't go to after school activities or friends parties a lot of the time as no transport, we didn't have many things a lot of our friends had, no holidays or big days out, no theme park trips over summer, we had no Sky TV whereas most other kids in my year did so they'd talk about shows I'd never even heard of - Now at 35, I work full time, one reason being that I don't want my kids to miss out on those things.

Sorry, I got distracted with work and have only just come back. So many replies, thank you! Catching up now

@yourestandingonmyneck - It’s so difficult to run a nursery, that I don’t even know where to start.

Like you say, the profit margins are tiny. Most of the time it’s a struggle to break even.

The main problem is that the childcare funding has actually created a culture where parents do not think they should pay for childcare. They think it should be free. This means that it’s a struggle to get anyone to pay for additional hours and food, especially as meals are provided in primary schools - nursery parents don’t understand why meals are not provided in nurseries also.

The cost of rent in D1 buildings is extortionate - much, much higher than the cost of rent for a shop (think 50 times higher) - and so are business rates (which most shops do not pay). The turnover of a nursery is similar to a shop, which tells you how profitable a nursery is in comparison to a shop. It makes sense that rents would be more expensive because nurseries have to be spacious to accommodate the children, but the government could stop charging business rates if they really wanted to help the childcare industry. Nurseries in Scotland do not pay business rates - how is it fair?

Finally, the real kicker (apart from the fact that local authorities keep 20% or more of the childcare funding for themselves and provide nothing in return), is the fact that you can’t charge VAT, but have to pay it on everything - utilities, services and everything you purchase for the nursery. So running a nursery costs 20% more than running any other business, and that is before you take anything else into account (the high rents and business rates, the need for so many staff, etc.).

Very soon it will be impossible to even break even - at which point all nurseries will have to close.

@EYProvider Yes, this is what I was getting at but you are obviously just more knowledgeable than me.

Even as a layperson I can see how difficult they have it. What you have just outlined is even worse.

You are right, I fully agree, the government should be offering assistance.

Best of luck to the OP. You are providing a valuable service and I hope you have some support. I have a huge amount of respect for you for doing it.

Good luck xXx

[quote EYProvider]@yourestandingonmyneck - It’s so difficult to run a nursery, that I don’t even know where to start.

Like you say, the profit margins are tiny. Most of the time it’s a struggle to break even.

The main problem is that the childcare funding has actually created a culture where parents do not think they should pay for childcare. They think it should be free. This means that it’s a struggle to get anyone to pay for additional hours and food, especially as meals are provided in primary schools - nursery parents don’t understand why meals are not provided in nurseries also.

The cost of rent in D1 buildings is extortionate - much, much higher than the cost of rent for a shop (think 50 times higher) - and so are business rates (which most shops do not pay). The turnover of a nursery is similar to a shop, which tells you how profitable a nursery is in comparison to a shop. It makes sense that rents would be more expensive because nurseries have to be spacious to accommodate the children, but the government could stop charging business rates if they really wanted to help the childcare industry. Nurseries in Scotland do not pay business rates - how is it fair?

Finally, the real kicker (apart from the fact that local authorities keep 20% or more of the childcare funding for themselves and provide nothing in return), is the fact that you can’t charge VAT, but have to pay it on everything - utilities, services and everything you purchase for the nursery. So running a nursery costs 20% more than running any other business, and that is before you take anything else into account (the high rents and business rates, the need for so many staff, etc.).

Very soon it will be impossible to even break even - at which point all nurseries will have to close.[/quote]
Thanks for this - I knew running a nursery was really difficult with tight margins but didn't fully understand why, I've found your post really informative and will help spread the word about this.

Last nursery I worked it was a 30% discount regardless of age, nursery before that was 20% discount regardless of age.

As @QforCucumber said above, it's really important to understand that you cannot offer them to be allowed to pay too much of their nursery fees under Salary Sacrifice if their pay isn't much above Minimum Wage. Salary Sacrifice is only legal for sacrificing the difference between an employee's wages and NMW. Also I don't think a worker in a nursery has any different rights to salary sacrifice for childcare than any other worker - all employees can pay for a certain amount of childcare from pre-tax salary and I can't see anything in the rules that increase the limit for someone whose employer is the nursery offering the childcare.

You can't possibly give your employees free childcare, no. If they want that deal they can register themselves as a childminder. If they want the security of having an employer then they can't have their cake and eat it by demanding they get to set the rules too.

I only got 10% discount at the private nursery I worked at.

This seems an unfair perk, as it's a perk only some staff get and some don't, and they're doing the same job. Essentially it's extra money to some staff and not others. So, I wouldn't give any at all, but I would pay as much as I could to all staff instead.

@EYProvider - thanks for your post. How do the big providers like Children 1st and Busy Bees make so much money?