The single biggest cost in any nursery that pales all others into insignificance is the cost of staffing. These can be 75% to 85% of the total running costs and I’ve known it to represent as much as 60% of the turnover of a nursery.
Why are escalating wage costs becoming one of the biggest headaches for early years settings.
The vast majority of nursery operators know that their wages rates are poor for the level of qualification and dedication of the staff that work within this industry. But they are also aware of the problems facing parents of the affordability of quality childcare and to many extent there has to be a balance between the salary aspirations of their staff and the amount parents can afford or willing to pay. This is compounded by the government policies on funding the ‘free' hours of Early Years Entitlement, the true value of which has fallen over the past 10 years to a level far below the cost of proving those hours in a great number of nurseries. The effect on salaries of this reduction in value has further reduced the financial viability of a nursery resulting in wages becoming an ever increasing burden.
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