The Over-Hiring Trap: Why UK Nurseries Are Paying Too Much for Staffing

Sep 29

Many nurseries across the UK have adopted a costly defensive strategy: hiring more staff than regulations require. It seems like prudent planning—until you examine the numbers. This over-hiring approach, combined with England's already stringent staffing ratios, is quietly strangling nursery profitability.

England's Regulatory Burden: Stricter Than the Developed World

England's mandatory staff-to-child ratios are among the tightest in the OECD, requiring four to five children per staff member for two-year-olds, compared to eight to ten children in France, Ireland, Luxembourg, Norway and Portugal, while Denmark, Spain and Sweden have no mandatory ratios at all.

For every 20 two-year-olds in care, an English nursery must employ four to five qualified staff members. A French nursery caring for the same children needs just two to three. A Swedish nursery can determine staffing based on professional judgment rather than rigid mandates.

UK nurseries are already operating with significantly higher staff costs than international peers—before they even consider over-hiring.

The Cost Paradox

Despite these strict ratios that drive up costs, Britain has some of the highest childcare fees in the developed world. In 2024, full-time nursery care in inner London costs over £428 per week for children under two—that's over £22,000 annually. Yet quality metrics show UK early years provision ranking on par with or below OECD peers who operate with looser or no mandatory ratios.

Parents pay premium prices driven by regulatory requirements, but don't necessarily receive superior outcomes.

The Agency Windfall

This regulatory environment created a golden opportunity for traditional staffing agencies. When staff call in sick or take holiday, nurseries face a stark choice: operate below ratios (illegal and grounds for Ofsted action) or pay agency rates of £20-30 per hour plus VAT for qualified staff. With VAT, the true cost becomes £24-36 per hour. For a nursery practitioner who earns an average of £24,627 annually (approximately £12.60 per hour), this represents a markup of 90-185% above typical wages.

The COVID-19 pandemic and Brexit exacerbated the situation, with many practitioners leaving the sector and EU recruitment curtailed. The shrinking pool of qualified staff gave agencies even more leverage.

The Over-Hiring Response: A Costly Solution

Faced with unreliable agency availability and astronomical costs, many nurseries now hire one or two additional permanent staff per setting beyond what's strictly necessary. Some employ "floating staff"—practitioners without fixed room assignments who deploy wherever ratios are tight.

The Real Cost

Taking the average nursery practitioner salary of £24,627, here's what one extra staff member costs:

Base salary: £24,627
Employer National Insurance (13.8%): ~£2,144
Pension contributions (3%): ~£739

Total annual cost: approximately £27,510 per additional staff member

For a nursery hiring two extra staff, that's £55,020 annually for practitioners who may be underutilised during quieter periods.

Consider a typical 50-place nursery generating £500,000 in annual revenue. Industry profit margins typically range from 10-30%, with most achieving 15-20%. At 20% margin, this nursery makes £100,000 profit. Two extra staff (£55,020) immediately consume over half that profit, reducing margins to around 9%—barely sustainable.

The Hidden Cost: Staff Morale

The financial burden is only part of the story. Over-hiring corrodes team dynamics:

For floating staff:

No sense of ownership without a dedicated room or age group
Unclear role identity—their purpose is essentially to be a "spare"
Professional stagnation without opportunity to develop specialised skills
Lower job satisfaction due to lack of autonomy and purpose

For the permanent team:

Resentment when floating staff appear to have easier roles
Disrupted team dynamics when floating staff rotate through rooms
Constant training burden bringing floating staff up to speed

This model costs money, morale, consistency, and ultimately quality. Children thrive on secure attachments and predictable relationships—exactly what floating staff cannot provide.

The Kalendit Solution: Flexibility Without Over-Hiring

What if nurseries could have flexibility without over-hiring, consistency without agency fees, and healthy margins without compromising quality?

How It Works

Kalendit is a transparent marketplace connecting nurseries directly with qualified, vetted early years educators:

Optimal Core Staffing: Maintain only the permanent staff needed for typical daily operations—no expensive "just in case" employees.

Long-Term Bookings with Preferred Practitioners: Unlike traditional agencies, you book the same qualified educators repeatedly, building consistency and relationships that quality care demands. They become familiar faces children and parents recognise and trust.

24/7 On-Demand Coverage: Staff calls in sick at 6 AM? Secure qualified coverage immediately through the platform, ensuring you maintain ratios without panic.

Transparent, Fair Pricing: Nurseries set their own hourly rates for each booking based on budget and role requirements. Kalendit charges an average 20% commission fee—transparent and predictable. Compare this to traditional agencies charging £20-30 per hour plus VAT (£24-36 per hour total, a 90-185% markup), and the savings are immediately clear.

Quality Assurance: All educators go through a robust vetting comprising enhanced DBS-check, qualification and references check as well as a Safeguarding and Best Practices assessment. Educators also receive regular ratings and feedback from nurseries and get incentives for maintaining a 5 star rating.

The Profit Impact: Real Numbers

One nursery group using Kalendit raised their profit margin to 40%—nearly double the industry average. Let's see how this works using our 50-place nursery example:

Traditional Model (with over-hiring):

Revenue: £500,000
Costs including two extra permanent staff: £455,000
Profit: £45,000
Margin: 9%

Optimised Kalendit Model:

Revenue: £500,000
Costs with lean permanent team: £380,000
Strategic Kalendit usage: £21,600 (approximately 20 shifts/month at 8 hours = 1,920 hours annually at £15/hour = £18,000 + 20% commission = £21,600)
Total costs: £401,600
Profit: £98,400
Margin: 19.7%

The transformation comes from eliminating inefficient over-hiring while maintaining full coverage through strategic use of preferred Kalendit practitioners for planned absences, holidays, and peak periods.

From Defense to Optimisation

Over-hiring is a defensive strategy born from fear: fear of breached ratios, agency unavailability, and Ofsted action. But defensive strategies rarely lead to thriving businesses.

Kalendit enables a strategic shift:

Plan rather than react: Analyse actual staffing patterns and fill gaps precisely and affordably
Build consistency: Work with trusted practitioners who know your nursery, children, and standards
Improve morale: Clear roles for permanent staff, meaningful work for Kalendit practitioners—no more purposeless floating roles
Restore financial health: With margins approaching 20-40% instead of struggling at 10-15%, invest in resources, development, and facilities

Time to Escape the Trap

England's strict staff ratios already disadvantage UK nurseries compared to international peers. Over-hiring compounds this burden, creating a vicious cycle: high costs force high fees, making childcare unaffordable and reducing demand.

Traditional staffing agencies have been the primary beneficiaries, charging premium rates while nurseries struggle with single-digit margins.

Nurseries using Kalendit prove that optimal staffing, consistent quality, and healthy profit margins aren't mutually exclusive. They're achieving financial sustainability without compromising the care children deserve.

Will you escape the trap and boost your margins this year?

Ready to break free from the over-hiring trap? Discover how Kalendit can help your nursery achieve optimal staffing and healthy margins. Visit www.kalendit.com or contact our team today.

Kalendit LTD https://www.kalendit.com