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Is your demand for places changing?

The childcare market has just experienced one of the most challenging and unpredictable times due to the pandemic that has disrupted normal patterns of parental behavior and affected demand profiles in all age ranges over the past 2 years.

The question is, “Will it return to pre-pandemic norms?”

Without doubt the market is still settling down after the recent turbulence but when and where will it settle? Whilst we cannot predict the future, we do have recent and current market information that will help us keep track on market trends and make business changes and decisions to remain profitable and sustainable.

Dealing with changes in demand

The first thing to concern ourselves with is whether the much reduced demand during lockdown will return to a position similar to previous levels or whether the economic strategies applied throughout the pandemic have shifted parental work / life patterns enough to see changed patterns of demand for childcare places.

If you analyze your current demand now it should be possible to see any differences there may be when compared with your pre Covid levels. If demand is showing a steady growth back to a more normal position, that’s a good indicator of market stabilization, but remember it is still early days and the true effects on demand for childcare places may take a while longer to be truly evident. Ideally it would be useful to track and compare your demand for places continually for the next year to gain confidence that the market has stabilized.

Obviously changes to demand can affect a childcare business in many ways. At one extreme very low demand can lead to closure, but it’s likely that there are many other more subtle ways demand can change your organization and its sustainability.

For example have you checked whether you now have different take up levels in each age range? Perhaps you have more demand for 2-year-old places, or maybe less parents needing 30 hours free childcare. The consequences of changes like this can be quite significant, affecting costs, staffing levels and disrupting the flow of children through the age ranges meaning gaps in places and times when more children leave together, all of which can negatively affect income and expenditures.

So demand fluctuations can affect the way you operate including staffing levels, the amount of income that comes from the free entitlement and private hours and perhaps place demands on the setting to b more flexible to try and adapt to parental situations.

Mitigating the effects

We cannot control market demand and if parental working patterns have changed and they now need less childcare, then we have to deal with this, but it is possible to adapt business activity and operation to mitigate any negative effects of demand profile changes.

The important factor to consider before you make changes is to be absolutely sure that demand has shifted significantly and that it is not just a short blip in normal demand patterns, so be sure to track demand closely breaking it down across all the offers you deliver in each age range and across all the free entitlements. So if you are experiencing a sustained change in place take up then you will need to review the consequences and alter your delivery model to make the best of the new situation.

This could include staffing levels and flexibility, use of the building, opening times and delivering offers that you don’t currently like 30 hours for example.

In essence, whatever changes you need to make to your operational and strategic activity to lessen any negative effects or maximize any positive effects of changes to parental choices and demand as we move further away from the effects of the pandemic to our new way of living.

So it is certainly worthwhile taking a strategic look at what’s happening to your demand since last year and what its looking like going forward and begin to proactively track changes.

This base level of market research, done proactively, will afford you more time to adapt to changes and continue to thrive!

Information & Support available

If you need more information or support on any of the circumstance outlined above please do contact us.

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