Both the UK and US governments have recently announced massive economic stimulus packages in response to the coronavirus, which promise to relieve some of the financial pressures facing the early years sectors at the moment.
Last week, I had the chance to speak with Kris Murray, president and founder of the US-based Child Care Success Company, to discuss what the coronavirus might mean for the bottom line of many early years professionals.
Having entered the child care industry in the midst of the 2008 global financial crisis, Kris is an authority in weathering tough economic times.
“When people start losing jobs during a recession, one of the very first things they cut back on is child care,” Kris says. “It’s important we make adjustments now — to anticipate that drop in enrollment, shift funding, figure out how to reduce expenses and protect our money. That way, we won’t get caught off guard.”
While these stimulus packages promise a great deal of relief to the sector, you can still take some additional steps today to make doubly sure that you’re financially secure.
If you’re concerned about how a closure will impact your finances, we’re here to help.
Here are some steps you can take right now to stay afloat in the coming weeks.
Supporting your staff in the United Kingdom 🇬🇧
Kris estimates that staff payroll accounts for between 50 and 65 percent of a child care setting’s expenses. That is to say, any adjustments you make here will have the greatest impact on your finances.
Fortunately for those in the UK, the Coronavirus Job Retention Scheme covers up to 80 percent of the wages of workers who remain on their employer’s payroll, but are unable to work due to a mandated closure. For early years professionals, this scheme promises to significantly reduce the burden of payroll costs for early years settings during the closure.
My colleague Matt just wrote an outstanding in-depth explanation of the UK relief scheme, and how it will assist your financial challenges related to staffing. If this applies to you, I really recommend you give it a read.
Financial relief in the United States 🇺🇸
Updated Friday, April 3rd
Last week, the federal government passed a $2 trillion relief package called the CARES Act, in response to the rippling economic impacts of the coronavirus.
I’ve put together an explainer piece that explores the specific provisions within the CARES Act intended to support the child care sector, as well as how the legislation provides financial relief to individual workers.
To learn more, I recommend that you read through the full breakdown.
Otherwise, here’s three key takeaways. The CARES Act:
- Allocates $350 billion in federally-guaranteed loans to small businesses – These are accessible for all businesses with fewer than 500 employees, which applies to many child care centers across the country.
- Grants $3.5 billion in additional funding to the Child Care Development Block Grant – This funding boost supports child care assistance for essential personnel like nurses, supermarket employees and sanitary workers.
- Expands eligibility for unemployment insurance – The Pandemic Unemployment Compensation program supports those put out of work by the coronavirus, and boosts weekly unemployment insurance checks an additional $600 until July 31st. You can read more here.
If you’re facing the possibility of staff layoffs, do what you can to connect these team members to your state’s unemployment benefits center. The New York Times has published a clear and informative guide to help navigate this system.
Reducing your facility costs
After staff payroll, one of the largest chunks of your budget is going to be facility costs. Kris Murray recommends calling your landlord or mortgage company to ask for a temporary reduction in rent, or an extension of your payment deadlines.
Additionally, take a moment to consider all your monthly utilities, and how you can minimize them during your closure. Shut off all the lights, unplug any large appliances that you can, turn your heat down low. This will minimize the fixed facility costs at your setting for the time being.
Cutting back on classroom supplies
Finally, take a moment to consider the physical materials you use every day at your child care setting, such as food, art supplies, dry goods and cleaning supplies.
At the risk of being too obvious, you won’t need to stock up on these items for the next few weeks if you’re facing a closure. If you make recurring payments to caterers or groceries for your food program, call them up as early as possible to pause your subscription.
“You might have other learning components coming in, other supplies — any classroom material suppliers that you can call to put on hold, do that now,” Kris says.
By reducing costs here, you’ve covered the third major area for monthly expenditures, significantly reducing the financial losses associated with closure.
To learn more about Kris and her team at the Child Care Success Company, head over to www.childcaresuccess.com. Kris also has an industry-leading podcast called Child Care Rockstar Radio, available on all popular podcast platforms.
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