Finding the right balance with staffing numbers is always tricky, even in the best of times. Like most businesses, though, day care centers are making tough financial decisions to keep their doors open. Dwindling enrollment numbers due to unemployment, the work-from-home movement, and concerns about the global pandemic are all rocking the childcare industry. When it’s time to make cuts, it’s often staff who are the first to go.
The Center for the Study of Child Care Employment found that of the 2,000 California daycare centers surveyed, 78% of them have already made staffing changes in response to the current economic climate. That story is repeating itself all over the United States, but it may not last forever. As concerns about the pandemic ease and more parents go back to work, enrollment numbers could shoot up. That could leave many daycare centers grappling with the question of when and how many new staff to hire.
So what’s the best way to make these tough staffing decisions? Here are some key metrics to help you determine whether it’s time to reduce your staff numbers or put out the “now hiring” sign.
Key Metrics For Achieving the Right Number of Staff in Your Daycare Center
When it comes to making a staffing decision for your daycare center, data is key. Of course, when it comes to your business, it’s good to have a healthy amount of gut-instinct sprinkled in, too. We’ll cover both of these.
Looking at the Hard Data
- Year-over-year student enrollment. Look back into your records and see where student enrollment was a year ago. How about two years ago? Collect data on the year-over-year changes in your enrollment. Where does it currently stand and how has that changed over the last five years? If the numbers are down drastically, then it may be time to make some cuts. If the numbers are the same or rising, then it may be time to hire new staff and grab an opportunity to grow your business.
- Student-to-staff ratios. You probably know your ratios by heart. After all, the government publishes its ratio recommendations online. It’s probably the first question a lot of prospective parents ask you, too. While it’s pretty easy to calculate the current ratio, what you really want to look at is what happens if you change that ratio. For instance, if you lose one or two employees, will it mean you’ll need to drop any children from your enrollment? If you increase your staff numbers, could you also increase your enrollment numbers? Make sure you know your local, state, and federal guidelines for staffing requirements, too. You don’t want to make cuts and end up violating any rules.
- Know your counts. What time are parents arriving for pick up and drop off? How many kids do you have on a typical Wednesday? You need these numbers. They will inform you about what kind of coverage you need and when. That can be a clear indication of when you need more staff and when you have a lot of people standing around (and getting paid for it!).
- Staff hours and scheduling. Take a look at the total number of hours you are scheduling versus the total number of staff. Are you giving everyone the hours they want, or are you cutting them short to spread the available time around? Make sure you aren’t giving out more hours than you really have to give. Labor is usually one of the biggest expenses in a business, so being generous with hours is a surefire way to kill your bottom line. If you have more people than you do hours, it’s time to make cuts.
- Cash flow. Expenses in child care centers are on the rise, with new requirements for PPE and cleaning supplies. You need to know the current state of your financials and how current changes are impacting them. Hiring a new person will be a big drain on your cash flow. You need to be reasonably certain they’ll bring a return on your investment, so proceed with caution. If money is starting to get tight and you can’t cover costs, though, then cutting staff is usually the most obvious (although painful) choice.
Your Gut Feeling on the Current Climate
While you can get the metrics above from data, you’ll also need to do a gut check when it comes to hiring and lay-offs. The biggest gut check you need to make is to consider the current climate you are operating in and whether those factors are here to stay.
For instance, is enrollment down because a large employer laid off a lot of workers? If the job economy is strong in your area, then your numbers could go back up rather quickly as parents find new jobs. Or is enrollment down because of a global pandemic? A lot of parents pulled their children out of daycare because of concerns over infection rates. They may have seen keeping their kids home as an easy to way cut their own expenses. But as the infection rate goes does, more children will need to go back into childcare.
So can your business weather the storm or is it time to make changes? It may be you need to have a few lean months but can avoid layoffs. Or it might mean starting to make those job cuts in anticipation of a long-term decrease in the number of students. Talk to parents, communicate with staff, and trust your instinct.
Making the Right Decision With Better Data
Many of the metrics you need to make these staffing decisions will come from data collected from your child care management software. If you aren’t already putting a good software package to use, now is the time. The reporting from good child care management software can help take the guesswork out of decision-making. Instead, you’ll have hard numbers for data-driven decision-making. That helps take the emotion out of it and give you a clear roadmap for the future of your child care business. Not using child care management software yet? Check out Prime Childcare Software. The intuitive interface allows you to simply point and click to get the information that you need. Your hours become more productive, your parents are more informed, and you’ll have the information you need to make the best decision possible. Schedule a free consultation with our team to learn more about our software package and how it could help your child care center thrive.