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Stephanie Marchment
Childcare Owner

Employee Benefits and Wage Compensation for Child Care

January 7, 2021

One of the most common causes of friction between employers and employees is wages and benefits. Labour laws, compassionate employment, and practical considerations (ie cost) all play a part in the equation. Both sides have their own priorities, and both are looking for good value and fair treatment.

So how do these differing sides come together? While it might seem as if only one party can ‘win’, a good system can keep staff motivated while ensuring that your healthy business can keep them gainfully employed for the long term. After leading a team of over 50 employees I have developed a system that has worked really well and today I am excited to share it with you.

There are three main parts to my system for managing staff wages and benefits:

Base Pay

One of the most important aspects of managing staff wages is starting with the right base pay for each and every employee. In my experience there is no perfect formula but there are several things to consider when choosing a starting rate:

  1. What were they paid in their last job?
  2. What experience and qualifications do they have?
  3. What is the normal range in your center for their role?
  4. Will you have room to give them a raise if they perform well?

When we consider all 4 of these aspects it allows us to find a number that is not only fair for your new employee, but also consistent with the rest of your staff. Making sure that you have a consistent range of pay for each role is very important, and can prevent headaches and division down the road. 

For example we paid our lead teachers anywhere from $16-$20 per hour, although this rate will vary depending on where you are located. We did have times we went above $20 for a starting wage, but we tried to keep within this range as much as possible. 

Starting out with the right base pay is the best way for you to set up your employee for success. In my personal opinion, one of the biggest mistakes when adding a new team member is to pay them too much. Leaving room for raises along their journey at your center is so important. 

Sometimes a potential employee isn’t the right fit for your center simply because their expectations for pay are too high. Don’t make the mistake of giving in because you are desperate to hire, I promise you the employee won’t be happy long anyways. Better to start lower and reward great work with a raise instead. 

Pay Raise

Let’s be honest, everyone loves getting a raise. As I mentioned before, leaving room for raises is KEY to maintaining satisfied employees. 

I believe that giving an annual raise makes sense in most situations. At my center, we raised tuition by about 5% each year. Normally I would model the staff raises around the tuition increase. When parents asked about the tuition increase I explained that it was for staff raises and they always understood. 

When considering raises consider the following: 

  1. Are they simply doing their job or performing above and beyond?
  2. Do they have a good attitude and add to a positive team culture?
  3. Do you want to encourage them to stick around awhile or would you be okay to see them go?
  4. Did you start them at a base pay that left room for a raise? 

If your answer is yes to these questions then give them a raise! Raises are a great way to let your staff know that they are valued and that you notice and appreciate the good work they are doing.

For the staff who don’t receive a raise, I let them know that I will be watching them and if I see improvement I am happy to increase their pay. Raises aren’t automatic and shouldn’t be expected, they are merit and performance-based.

Employee Benefits

Choosing employee benefits is complicated to say the least, but they are one thing that can really set your center apart from others. Benefits are a huge part of a compensation package. Having certain benefits can make or break whether or not an employee accepts a job offer.

Here are some of the benefits we offered at my center:

  1. Health Insurance: This will depend on the location of your center and how health care is managed. Where my center was located we were required to provide health care for all employees who are full time (30+ hours a week). 
  1. Gym or fitness center privileges: At our center, we really believed in whole-body health; physical, spiritual, and emotional. Because this was a high value of our center we provided membership to a local gym to those who would go 3+ times per week. We also offered to cover a few sessions of counselling with no questions asked. 
  1. PTO, Paid Holidays, and Sick Time: One of the benefits I believe shouldn’t be skimped on is PTO. Paid time off and sick time are super important to each employee’s mental health and wellness. Consider giving your staff a few weeks per year. At my center, we would give our full-time teachers 2 weeks of PTO each school year. They had the time to use or lose. We didn’t roll over from one school year to the next because we wanted them to use vacation time every year as part of their whole body health maintenance. 
  1. Child Care Discount: A great perk to add to your package is discounting tuition for your teacher’s children. We offered a 50% off discount for all staff children. 

There are so many benefits to consider adding to your compensation package and it can be hard to choose. The more benefits you offer, the more attractive your center will be to prospective employees, but it all comes at a cost. We focused on a mix of health and fitness benefits, paid time off, and tuition discounts and found that this kept our staff happy, healthy, and motivated without breaking the bank. 

Final Notes

Having a good system for managing staff wages and benefits is essential for running and growing a successful childcare or daycare center. One of the intangible benefits of being generous with compensation is staff loyalty. 
A well paid and cared-for staff member will work harder, take fewer sick days and become more efficient and productive in their work.

Although it isn’t always cheap in the short run, limiting staff turnover is one of the best ways to cut costs in childcare and when we show our staff we value them by providing solid benefits and yearly raises based on merit, they will stick around to give back to your center tenfold!

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