Pivoting Through The Return of Gap Fees

My opinion:

As a working parent who didn’t experience any income loss during Covid-19 shutdowns, I didn’t understand why ‘free childcare’ applied to me in the first place. Not only did I save on my entertainment expenses due to the mandatory business closures, my childcare budget was notably reduced to zero. What annoyed me about this is I know that my ‘childcare saving’ could have helped someone more deserving and I didn’t need a discount as I budget for this expense.

Further, as I work in the childcare industry, I know that ‘free childcare’ is simply not sustainable for the Australian government or childcare businesses. It was a temporary and much needed ‘band aid’ to help childcare centres and families out of extenuating circumstances.

What’s interesting to me is the divide between Australian families on whether childcare is classified as an expense or an investment?  Even before I worked in childcare, I was a childcare advocate and see it as a necessary investment into my child’s educational experience and my career as a working mother. Like my grocery bill, I need it to function in society and while some weeks it nearly killed me, I couldn’t give up my days as I would miss out on my income.

Nevertheless, I am extremely mindful that many Australian families are still hurting from the pandemic and I believe that now more than ever before, childcare centres and families need to work together to get through this.

So how can we help each other?

Childcare centres need to understand that the transition back to gap fees will be tough for some Australian families and we need to support them. This is how:

1. Talk to each family personally and adapt to their situation:

Childcare centres need to understand that while we are all in the same storm, we are in different boats and every Australian is experiencing this pandemic in different ways. As a centre, you are responsible  to open up your communication channels and ensure you reach every enrolled family. A standard letter, email or social media post just isn’t enough. Don’t expect families to come and speak to you if they are experiencing difficulty. If someone is experiencing stress, they may actively avoid all conversations associated that increase their anxiety. Now is the time to invest back into every relationship by speaking directly with them to find out how you can work together. If you have many families hurting, it would be a good time research ways to help your families reduce their overall living expenses. Compassion and empathy are what we need right now.

2. Make childcare more affordable:

Katrina McCarter (Marketing to Mums, 2020) recent #ISOMUMS study found that the number one worry keeping mums awake at night was ‘unemployment’. This is no wonder as  household expenses are not affordable for most. Add unemployment, uncertainty and a ‘pandemic’ to the mix, it’s no wonder families are struggling with the thought of childcare fees returning. Nevertheless, the governments message is clear; childcare centres are obliged to collect gap fee payments in accordance to the Childcare Subsidy Laws. The Law is the Law.

So how do we make childcare more affordable without discounting the fees? It requires outside of the box thinking to help reduce the overall living expenses for our Australian families. Some of the ways I could suggest are;

  • Engage financial budgeting experts for families to provide advice to families.
  • Provide support with how to access human services and other government grants available at this time.
  • Consider payment plans to those needing immediate relief.
  • Promote that you offer food at your service so families can save on grocery bills.
  • Add a dinner service so families can save on expensive takeaway.
  • Provide a ‘free’ activity lists for families to still enjoy their downtime without blowing out the budget,
  • Consider a community board where people can support their local childcare by posting job vacancies, free items to give away etc.

Another option to show your support is to incorporate our loyalty rewards program Nurch. The platform gives something back after they pay their gap fees and our Nurch perks can help families save on everyday household expenses and reduce ‘affordability’ concerns for our families.

But my message is that anything you can do right now to support your community will go a long way. Talk to your families and see how you can help.

3. Review long term pricing strategies:

Financial reports indicate it could take years for Australians to recover from this pandemic. Regional cities may see an increase in population as families make the move to combat city lifestyle affordability issues and ability to work from home moving forward. This might be a good opportunity for regional expansion for some centres to consider helping alleviate the short-term losses taken in the city centres.

While some pricing increases are inevitable, several centres could remove outdated discounting practices like holiday discounts instead. It is important to look at the holiday discount usage for your centres to see if families are actually obtaining this perceived benefit. It might be useful to remove that expense from your bottom line before you review any increase in pricing. After all, the holiday discount is just that, a very small discount on a fee they budget to pay and its only available to families who can afford the luxury of holidays. There are many more parents these days using their annual leave to complete work around the house or undertaking staycations where the children could still attend the childcare centres. My point is, take a look at all of your businesses expenses and consider all options available to your business model.

Final Thoughts:

We are most certainly living in some strange times. As I write this, parts of Victoria are facing mandatory shutdowns to contain the spreading virus (again). We all need to do our part to help each other. The childcare industry is essential for all working families whether you see it as an expense or an investment, and our children’s education. Let’s work together and together, we’ll get through this.