Understanding staffing challenges – and finding solutions

New data compiled by specialist research firm CACI provides insight into the demographics of childcare staff and suggests useful strategies to boost recruitment and retention in the sector.

We have all witnessed the recruitment and staffing crisis in the incubator industry, and it was a recurring issue raised at the Global Incubator Business Summit earlier this year. Many CACI clients say recruiting is a growing challenge that is holding business back. In parallel industries, our clients are facing similar challenges, and some are closing sites that have had ongoing recruiting issues.

As a result, companies are doing everything to be more tempting. Examples include interest-free loans, assistance with housing and travel costs, and more flexible rotations. While these arrangements are laudable, they are part of a negative spiral of rising costs, in a context of problems with the global supply of products, and cannot be seriously considered as long-term solutions.

There is no miracle cure, but solutions are necessary. To do this, we need to have a comprehensive understanding of the situation and identify who is currently working in the industry and who needs to be attracted. Only then can we implement relevant benefits that actually work.

To understand the staffing challenges, CACI used Acorn demographic segmentation tools, which we typically use to analyze incubator customers, to assess the demographics of incubator staff.

Typically, private nurseries target parents in the affluent groups highlighted in red in Figure 1, at the higher end of Acorn’s income scale.

Figure 1 – Typical target acorn groups and relatives

To understand the wants and needs of your staff, we have profiled over 10,000 staff members in over 400 nurseries, belonging to several nursery groups, nationwide.

Figure 2 overlays the most overrepresented Acorn groups among nursery staff. Golden “primary” groups are essential for staffing. These three relatively young, low-income groups represent nearly one-third of all staff and have very different demographics than typical target parents. As such, they are likely to have very different lifestyles and, more importantly for the staff challenge, may not live in the same neighborhoods where successful nurseries are located.

A more mixed demographic represents an additional 26% of staff. We have defined them as the “secondary” groups, because they are slightly less represented among the crèche staff. These range from career climbers with relatively high incomes and prosperous suburbs to the lowest income group, difficult circumstances.

Three of these four subgroups (marked with a green check mark in Figure 2) overlap with the main Acorn parent groups. Areas with high volumes of these three elements can represent an ideal area of ​​profitability for childcare locations, as they have high potential for both valuable parents and sufficient target staff.

In contrast, areas dominated by three of the wealthiest and most targeted Acorn groups – Lavish Lifestyles, Executive Wealth and City Sophisticates have extremely low levels of staff representation. These three areas, marked with a blue cross in Figure 2, potentially represent high-risk areas for nurserymen. While these locations shouldn’t have problems with high occupancy, they are facing staffing shortages and rising staffing and recruitment costs. In turn, these pressures jeopardize the profitability, safety and brand reputation of nurseries.

Figure 3 shows that many of the high-risk, high-opportunity areas are often nearby. In these areas, careful targeting of recruitment and support for transportation costs and flexible hours could help attract nearby staff.

Figure 3 – High-Risk, High-Opportunity Postcode Areas

With more than 450,000 people having left the wider UK workforce since 2019, the sector is battling to retain staff attracted from other sectors, which are facing similar staff shortages and recruiting from groups similar demographics. Call center professionals, caregivers and catering workers share similar Acorn characteristics, and the incubator industry needs to watch rising wages and relative benefits in these competing industries to avoid losing staff who might think that the grass is greener there. Similarly, nurseries should consider targeting these sectors and clearly selling the benefits of their roles to attract new hires. Another possible rich vein could attract the large number of over-50s who left the national workforce during the pandemic in nursery roles as an attractive second career.

And remember, the cost of living crisis is likely to have a disproportionate impact on nursery staff. CACI’s analysis reveals that 4 of the 7 primary and secondary enrollment groups will experience significant declines in their disposable income. This will increase the stress faced by staff and could lead to salary inflation as incubators compete to retain valuable staff who face key business decisions as they need to increase their income.

In summary, staffing is now such an important issue that it must be factored into decisions about the location of activities and the acquisition of nurseries – as there are stark contrasts between parents’ lifestyles and staff in many settings, which could impact the viability of the site.

Additionally, to ensure that your nurseries retain and recruit the staff you need to operate safely and profitably, you should:

  • Understand your staff and their needs
  • Know where to target to recruit effectively
  • Understand the additional pressures your staff face as they experience a real decline in income due to the rising cost of living.

For a more detailed version of this report and analysis, please contact Olivia Johnston at ojohnston@caci.co.uk.