As 2020 draws to a close, our thoughts are quickly turning towards 2021 and what needs to be done to ensure that occupancy begins on a high note into the New Year.

With many Providers currently developing their 2021 business and marketing strategies, it’s important to understand what has been, and still is, driving occupancy in the sector – and how Providers can capitalise on these forces to ensure occupancy remains strong throughout 2021.

So, what is driving occupancy in the Childcare sector?

Over the last few years, we have seen significant growth across the childcare industry, driven by an increasing number of Services, changing entitlements and more flexible options for Families. This has led to an overall increase in the proportion and number of children attending childcare Services – up 2.9% in the last 2 years according to the most recent Childcare in Australia report.

For Families, there are a range of social, economic and financial factors that come into play when choosing childcare. To help Providers understand how they can integrate these factors into their strategic thinking for 2021, our team have broken them down here.

 

The changing workforce

Over the past 12 months, many Providers have offered flexible solutions for childcare in direct response to requirements from Families and the changing workforce landscape. Whether it’s differing sessions of care, flexible payment options, ad-hoc care options or online learning opportunities – the availability of these flexible care options has been the key to many Providers occupancy growth as we move forward with COVID-19.

With the number of people working non-standard hours on the rise, longer day care hours are great news for working parents. Almost 30% of Providers recently surveyed by Xplor said that providing extended hours of care was a major occupancy driver for Families when choosing a childcare Centre.

Keep watch though – a ‘pink recession’  is looming, with women already seeing faster job losses than men throughout the third quarter of 2020. Flexible care options may well become a more significant driving force for many Families.

Investment opportunities abound

It’s no secret that the Australian ECEC investment market has grown exponentially over the last five years with strong acquisition numbers.

The appetite for ECEC Centre investment has emerged with the arrival of national and international operators taking control of independent operators – initially attracted by the certainty for investment returns. We have seen this in play in recent years with “major international private equity firms and investment banks signalling confidence in the sector by acquiring large portfolios or taking equity positions” says Kerrianne Meulman Managing Director at Urban Economics – with portfolio expansion following closely behind.

Changes to planning and council approval processes has also seen the emergence of many new operators to the sector in recent years, with ECEC Centres increasingly integrated within mixed use developments creating early learning hubs with other facilities such as swim schools and retail shops.

Whilst this significantly increases competition within the sector – there are opportunities for smaller and community-based Providers to differentiate themselves from local competitors.

Here our team explain how Providers can stand out from the pack.

Value adding programs

Enrichment programs play an important role in the development of a child, but they also factor into a Centre’s occupancy.  

Whether it’s a weekly sports programs, Artist in Residence, music class, swimming lesson or yoga session – a lot of childcare Providers now offer Families a range of enrichment programs as part of the daily fee for care – and as a result, see an upward shift in occupancy according to 56% of Providers recently surveyed by Xplor.

And it makes sense. With financial pressures continuing to mount, Families are looking for the best bang for their buck and by offering a range of additional and engaging programs, childcare Providers can tap into this desire whilst providing an exceptional benefit to the children in their care.

It’s a win for everybody. 

Intimate care options

More and more, we have seen that Families are valuing more intimate care options for their child.

Whether that occurs due to higher Educator to child ratios, smaller room sizes or a more individualised program, intimate care options have been a driving force and unique selling point for many Providers as Families opt for a more community-based environment.

Increasing Educator to child ratios is often not a possibility for Providers (especially with the financial effects of COVID-19 still emerging), however there are many ways to offer Families that more intimate and personalised care. Why not look at increasing the education reporting for each child to give Families greater insight, develop a specific drop off/pick up routine to increase Family/Educator engagement or initiate a range of parent information evenings or Centre events to bring Families together (both enrolled and prospective).

Sector fluctuations

With a record number of childcare Centre openings around Australia (16,209 in total at last count), changing corporate requirements and shifting government policy (especially over the last 8 months) Providers are facing incredible and continuing levels of competition and occupancy upheaval.

These sector influences can have dramatic effects on not only a Centre’s market share but also the number of children attending care, and the number of days they are attending – with positive and negative implications when it comes to occupancy as we have felt clearly throughout the sectors COVID-19 pandemic response.

According to a recent study conducted by The Australian Childcare Alliance, occupancy rates are diverse across regions, even reflecting different occupancy rates within the same regions – indicative that there were a range of factors at play in influencing Centre performance including catchment size, demographic, government entitlements, offering etc.

So, what does this mean for Providers? Keep your ear to the ground and stay abreast of changes within (and outside) the sector as well as in your local community. This will allow you to remain nimble and adapt quickly to accommodate these changes in order to stay ahead of your competitors.

Nutrition and wellbeing

Nutrition and child wellbeing programs have always been an influencing factor in Families’ decision-making process and therefore a driving force for occupancy growth. According to a recent survey by Xplor, about 38% of responders agreed that a childcare Centre that provided healthier options and more variety of food had better occupancy rates than those that provided a basic nutrition offering.

With the general movement towards more sustainable practices and farm to table living, why not touch base with a local Paediatric Dietician or speak with Families about what they would like to see? Make small changes to your nutrition offering, that won’t break the bank, and use it as part of your marketing strategy.

How can you capitalise on these influences?

Firstly, it’s time to delve deep when discussing your strategic plan for 2021 and understand what changes you can make to your Centre or offering to align with the direction the sector is moving in.

Don’t be afraid to trial something new and ask your Families what they value. Put a plan in place focused on delivering what Families identify as being of value to them and start to breed loyalty in your Centre.

Secondly, it’s no good having an exceptional Centre and offering if no one knows about it.

With Families having more options than ever, Centres should put more emphasis on standing out from the pack – whether it be through the facilities, staff, or offering. Here our team discuss what you can do to boost your USP and kick your marketing strategy into gear!

The Enrolment Hub in-house Marketing Team can also help. They work in partnership with Early Learning Providers to develop customised strategic marketing and advertising campaigns that help get the word out easily and effectively.

You should be in constant contact with your Families and waitlist to ensure your Centre remains front of mind – especially now. We know that this can take up a significant amount of time for busy Centre Directors, so it might be time to look at outsourcing this task to an experienced Enrolments Team.

Now is the time to look to the future and set your Centre up for success in 2021.

Why not get in touch with Director Scott Monaghan today to see how Enrolment Hub can help you. Simply give him a call on (02) 8123 2300 or send him an email at: scottm@enrolmenthub.com

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