Extend Group's Ethical and High-Quality Approach Under The Spotlight

1 00:00:02,197 --> 00:00:07,917 Welcome to Why Is It So? Your last defence for common sense with your co-hosts 2 00:00:07,917 --> 00:00:10,157 Paul Zammit 3 00:00:11,280 --> 00:00:19,760 Music. 4 00:00:17,717 --> 00:00:23,957 Welcome again to Why Is It So? In this episode, we have the honour of hosting 5 00:00:23,957 --> 00:00:29,837 the founder and CEO of the Extend Group, Darren Stevenson, one of Australia's 6 00:00:29,837 --> 00:00:32,017 leading before and after school care providers. 7 00:00:32,697 --> 00:00:37,837 As we explore the landscape of the child care industry, we aim to provide informative, 8 00:00:37,977 --> 00:00:40,497 engaging content for our listeners. 9 00:00:41,157 --> 00:00:46,077 Thank you for being with us today, Darren. I always thought that after school 10 00:00:46,077 --> 00:00:48,457 care was a kind of a babysitting. 11 00:00:49,237 --> 00:00:53,597 So perhaps, Darren, you should at least enlighten me and tell us a little bit 12 00:00:53,597 --> 00:00:54,537 about your company. Certainly. 13 00:00:54,877 --> 00:00:59,697 We're the largest family-owned outside school hours care company in the country. 14 00:00:59,957 --> 00:01:06,077 And a lot of OSH providers have been taken, the bigger ones have been taken over by private equity. 15 00:01:06,337 --> 00:01:10,557 So it's been a lot of turmoil and chain. Paul, there's a lot of people, 16 00:01:10,717 --> 00:01:13,137 how can I explain it? Let me give you an example. 17 00:01:13,437 --> 00:01:18,737 There's people out there that go, after school care, how hard can that be? 18 00:01:19,197 --> 00:01:23,157 You're just babysitting children at the end of the day until mum or dad come. 19 00:01:23,897 --> 00:01:28,537 Let's be. Okay. And it happens a lot to me, social functions and so forth. 20 00:01:28,697 --> 00:01:32,817 And then we start talking and I explain, well, actually, there's a national 21 00:01:32,817 --> 00:01:35,457 law and there's national regulations. 22 00:01:37,437 --> 00:01:44,537 There's the regulations and there's the law, right? This is for outside school hours, Kent. 23 00:01:44,717 --> 00:01:50,077 So, number one, it's a highly regulated environment, which people don't understand. 24 00:01:50,977 --> 00:01:54,657 They think that the highly regulated environments are just for medicine and 25 00:01:54,657 --> 00:01:58,417 telecommunications and transport and those kind of industries, 26 00:01:58,477 --> 00:02:00,017 but it's hit childcare as well. 27 00:02:00,966 --> 00:02:06,446 Then they often don't understand the moving parts within our operation. 28 00:02:06,806 --> 00:02:12,386 So how we need to communicate with the school, because if the school board or 29 00:02:12,386 --> 00:02:17,406 the principal don't sign a contract with us, we then can't do business with 30 00:02:17,406 --> 00:02:18,246 parents and government. 31 00:02:18,566 --> 00:02:22,146 Oh, right. So we need them to give us the opportunity. 32 00:02:22,266 --> 00:02:25,966 So we've got to convince them that we're the right provider for their community. 33 00:02:25,966 --> 00:02:29,166 Community then we have the the privilege if 34 00:02:29,166 --> 00:02:31,986 you like to do business with parents send them 35 00:02:31,986 --> 00:02:35,626 an invoice generate money for the the company then there's 36 00:02:35,626 --> 00:02:40,886 the complexity of staff wherever i go everyone's saying we have staffing difficulties 37 00:02:40,886 --> 00:02:47,066 well we've got to try and make sure that we get the right numbers of staff because 38 00:02:47,066 --> 00:02:52,346 there's ratios of staff to children that we need to abide by and they vary a 39 00:02:52,346 --> 00:02:53,546 little bit across the country. 40 00:02:53,886 --> 00:02:59,506 And then we've got to make sure that we have all our staff working with children 41 00:02:59,506 --> 00:03:04,126 checked so they don't have a criminal record or anything that precludes them 42 00:03:04,126 --> 00:03:05,206 from working with children. 43 00:03:05,526 --> 00:03:09,826 We've got to make sure they're first aid trained. We've got to make sure they're 44 00:03:09,826 --> 00:03:15,346 trained in the key components of the regulations so that we get regularly inspected 45 00:03:15,346 --> 00:03:19,406 by government so that we pass those audits and assessments. 46 00:03:19,406 --> 00:03:23,706 Assessments, and then we get a rating that's made public for every service. 47 00:03:24,486 --> 00:03:29,226 Part of my challenge is, and you might be able to help me here, Paul, is. 48 00:03:30,214 --> 00:03:34,914 Explain a component or a topic without confusing the listener. 49 00:03:35,494 --> 00:03:39,694 I don't want to go on and on and then your listener's going, what does he mean? 50 00:03:40,174 --> 00:03:45,094 So I've got to make sure I capture it in the right context. In layman's language 51 00:03:45,094 --> 00:03:46,614 type thing. Yep, I understand. 52 00:03:47,054 --> 00:03:53,594 Well, in my background, Paul, I've always been involved in sport coaching or 53 00:03:53,594 --> 00:03:55,374 education and care of some kind. 54 00:03:55,434 --> 00:03:59,874 So I started out life many years ago, way back in 1988. 55 00:04:00,214 --> 00:04:05,234 As a teacher in a school. And that was a brand new independent school. 56 00:04:05,434 --> 00:04:10,414 So to help the school market and grow, we ran extracurricular activities, 57 00:04:10,874 --> 00:04:13,874 sports coaching clinics, etc., which I did. 58 00:04:14,074 --> 00:04:18,614 And so from those early days for me, I've always had a bit of a passion for 59 00:04:18,614 --> 00:04:23,134 that learning that takes place outside the classroom, the extracurricular things. 60 00:04:23,434 --> 00:04:29,054 And so I went overseas for a few years and became head of an independent school in London. 61 00:04:29,394 --> 00:04:34,234 And during that time, I also started a business, which was the first structured 62 00:04:34,234 --> 00:04:37,654 after-school care program of its kind. 63 00:04:37,874 --> 00:04:42,194 Interesting. Is that here in Melbourne? No, that was in London in the early 1990s. 64 00:04:42,214 --> 00:04:46,514 And we had a little group of mini buses that would transport children from schools, 65 00:04:46,774 --> 00:04:50,754 activities, and then ultimately deliver them home at the end of the session. 66 00:04:51,474 --> 00:04:56,794 That went quite well. I grew that business and then sold it to the school network 67 00:04:56,794 --> 00:04:59,094 that I was actually also working for. 68 00:04:59,214 --> 00:05:04,654 And then I returned to Australia and I became a manager of a community education 69 00:05:04,654 --> 00:05:07,874 facility for a large independent girls school in Melbourne. 70 00:05:08,134 --> 00:05:13,534 And part of that was delivering the outside school hours care activities for 71 00:05:13,534 --> 00:05:15,114 primary school aged children. 72 00:05:15,892 --> 00:05:19,592 And the board at the time were very supportive, and I spoke with them, 73 00:05:19,692 --> 00:05:25,252 and they agreed for me to take parts of that operation external under my own 74 00:05:25,252 --> 00:05:27,832 business name and grow that across Australia. 75 00:05:28,052 --> 00:05:30,252 Oh, okay. So they were very supportive. 76 00:05:30,512 --> 00:05:35,392 So that was our first school where we had holiday programs and after-school 77 00:05:35,392 --> 00:05:38,052 care. So that started in 2002. 78 00:05:38,572 --> 00:05:44,592 And since then, we've just grown steadily over those 22 years to now have 120 79 00:05:44,592 --> 00:05:47,872 schools that we partner with around the country. 80 00:05:48,052 --> 00:05:52,772 Australia-wide. Australia-wide. And as a consequence, as we've grown, 81 00:05:53,012 --> 00:05:56,912 we've needed to look to the right type of people that we want to bring into 82 00:05:56,912 --> 00:06:01,492 the organisation to be educators and carers in the service. 83 00:06:01,492 --> 00:06:04,412 And over that time there's also been growing 84 00:06:04,412 --> 00:06:07,592 regulation a greater emphasis on the national 85 00:06:07,592 --> 00:06:10,412 law that we need to abide by so a lot 86 00:06:10,412 --> 00:06:14,252 of our work is in recruiting the right people training 87 00:06:14,252 --> 00:06:17,072 them up to make sure that they're capable and they're able 88 00:06:17,072 --> 00:06:20,032 to deliver good levels of education and care 89 00:06:20,032 --> 00:06:25,412 for the children and and we want to do that for several reasons to grow a good 90 00:06:25,412 --> 00:06:32,272 business but also to give the parents of these children confidence in the care 91 00:06:32,272 --> 00:06:37,152 that we're delivering because we believe they need to be able to work free from 92 00:06:37,152 --> 00:06:39,612 guilt while we're caring for their children. 93 00:06:40,012 --> 00:06:47,012 Just to interrupt you there, with the kids doing the before and after care, 94 00:06:47,132 --> 00:06:50,052 if that's what you call it, I'm insured I'm saying that? 95 00:06:50,172 --> 00:06:57,752 Correct. With that, how does your tutoring, managing the children go against, say, opposition? 96 00:06:58,032 --> 00:07:01,552 There are opposition companies doing the same thing as you are, 97 00:07:01,612 --> 00:07:06,012 I assume. Why are you different and how are you different in what you do? 98 00:07:06,312 --> 00:07:09,692 Well, our sector has a really interesting makeup. 99 00:07:10,012 --> 00:07:16,712 There's about 4,700 outside school hours care services around the country. 100 00:07:16,892 --> 00:07:17,872 I thought there might have been a few. 101 00:07:18,112 --> 00:07:24,132 Yeah, there's a lot. Now, for most of those, they're run by individual operators. 102 00:07:25,111 --> 00:07:28,231 So mum and dad operations, for example, and they might have one, 103 00:07:28,271 --> 00:07:32,811 possibly two, small businesses linked up. In ours, we have 120. 104 00:07:33,231 --> 00:07:37,871 Some other companies are bigger than us, but the number of big companies in 105 00:07:37,871 --> 00:07:39,771 the sector is actually quite small. 106 00:07:40,591 --> 00:07:45,251 Now, the largest company in our sector has around about 500 schools. 107 00:07:45,371 --> 00:07:50,111 Now, they have been predominantly owned by private equity. So private equity 108 00:07:50,111 --> 00:07:55,951 entered childcare or outside school hours care in around about 2017. 109 00:07:56,251 --> 00:08:02,391 And so that changed the dynamics of things in terms of how the childcare businesses 110 00:08:02,391 --> 00:08:07,671 were run, how they were accountable, and an emphasis on profit margins as well. 111 00:08:07,671 --> 00:08:14,431 Well, so for us, we've remained free of any private equity buy-in or syndicate ownership. 112 00:08:14,671 --> 00:08:18,091 We're still independent, completely family owned. 113 00:08:18,311 --> 00:08:23,251 But probably the biggest differentiator for us in a business sense is we've 114 00:08:23,251 --> 00:08:26,631 remained debt free throughout the whole time. 115 00:08:26,891 --> 00:08:30,791 And I suppose, Paul, we have two parts to the business to look at. 116 00:08:30,891 --> 00:08:35,411 One is we're educating and caring for kids, the most important thing in the world to a parent. 117 00:08:35,411 --> 00:08:38,151 So that's a serious business even though we 118 00:08:38,151 --> 00:08:41,471 like to say we have fun along the way but then the other component is 119 00:08:41,471 --> 00:08:44,151 genuinely to run a good business that's going to be 120 00:08:44,151 --> 00:08:47,111 financially stable for the long term that's in 121 00:08:47,111 --> 00:08:51,111 everyone's interest and we've been able to do that because we've run a good 122 00:08:51,111 --> 00:08:56,211 business but also we haven't taken on debt and some companies now that took 123 00:08:56,211 --> 00:09:00,891 on a lot of debt before the pandemic are now facing difficulties in servicing 124 00:09:00,891 --> 00:09:06,391 that debt along with some reduced numbers of children attending after the pandemic. 125 00:09:06,891 --> 00:09:09,871 With staff, how do you find staff? 126 00:09:09,931 --> 00:09:13,931 Staff has got to be, as you say, A, they've got to like kids and they've got 127 00:09:13,931 --> 00:09:15,411 to like that sort of work. 128 00:09:15,591 --> 00:09:19,671 And then on top of that, they've got to have the education and the willpower 129 00:09:19,671 --> 00:09:22,851 to go into this business. How do you find them? 130 00:09:23,914 --> 00:09:28,354 We find staff through two key mechanisms. One is word of mouth referral. 131 00:09:28,634 --> 00:09:32,354 There's no better referral than someone already working in the business that 132 00:09:32,354 --> 00:09:36,794 says, I know someone who shares the values and the ethos of the company and 133 00:09:36,794 --> 00:09:38,254 might want to come along and work. 134 00:09:38,514 --> 00:09:41,874 So we have a strong network of referrals to come into the business. 135 00:09:42,154 --> 00:09:48,354 The second component is we actually do advertise on the job boards and online networks, 136 00:09:48,634 --> 00:09:52,914 the same as many other companies in other industries would, which means we have 137 00:09:52,914 --> 00:09:57,274 a dedicated catered internal recruitment team to advertise, 138 00:09:57,634 --> 00:10:03,914 shortlist, interview with line managers so that we choose the right people. 139 00:10:04,074 --> 00:10:08,114 And just like you said, we've got to find the right person because these are 140 00:10:08,114 --> 00:10:12,614 people that need to get up perhaps at 5am to go and work in a before school 141 00:10:12,614 --> 00:10:15,074 care shift. And that doesn't suit everyone. 142 00:10:16,994 --> 00:10:22,114 So we've got to find the right people who can deliver the the education and 143 00:10:22,114 --> 00:10:27,414 care components, meet the national regulations and quality and compliance, 144 00:10:27,694 --> 00:10:31,534 but also have a bit of spark in them. They're engaged. 145 00:10:31,834 --> 00:10:36,734 They enjoy being with kids. So it's a unique person that we're dealing with. 146 00:10:36,854 --> 00:10:39,054 So this is head office. Melbourne is head office. 147 00:10:39,534 --> 00:10:44,554 And when you're looking for staff in Western Australia, what's the situation there? 148 00:10:44,614 --> 00:10:49,474 Do you have a chief of staff over there or do you sort of send someone from 149 00:10:49,474 --> 00:10:50,754 here there to interview? 150 00:10:51,394 --> 00:10:55,474 Do you bring them here? How do you sort of, I mean, nowadays it's all done Zoom 151 00:10:55,474 --> 00:10:59,274 and things. But we didn't have Zoom in my day. 152 00:11:01,054 --> 00:11:05,554 Nine of mine, Paul, I understand. Well, in the example of, say, 153 00:11:05,674 --> 00:11:10,294 Perth, we have a regional manager, a programs manager based there. 154 00:11:10,414 --> 00:11:13,994 So Grace will be a strong part of the recruitment process. 155 00:11:14,474 --> 00:11:18,894 So we might do some preliminary interviews first by phone, perhaps by video 156 00:11:18,894 --> 00:11:23,354 conference, And then Grace would interview those people in person as well. 157 00:11:23,994 --> 00:11:29,334 It's a good mixture of using technology to move swiftly and get the recruitment 158 00:11:29,334 --> 00:11:33,494 wheel turning because you can't be too slow because you've got to be competitive 159 00:11:33,494 --> 00:11:37,754 and have a compelling offer to get the right people to come and educate and care for children. 160 00:11:37,974 --> 00:11:42,214 But equally so, you can't move so fast that you don't do a proper due diligence 161 00:11:42,214 --> 00:11:46,854 of people because you need the right characters. Oh, absolutely. 162 00:11:48,014 --> 00:11:51,774 Yeah, they've got a, kids are something that, you know, everybody loves. 163 00:11:51,974 --> 00:11:54,394 As long as there's like grandparents, they can give them back. 164 00:11:55,934 --> 00:11:59,434 Like it's your turn. I've seen the kids there later. Absolutely. 165 00:12:00,154 --> 00:12:03,334 There's a lot of similarities. Yeah, they sort of get there. 166 00:12:04,034 --> 00:12:05,854 You don't want people who, you 167 00:12:05,854 --> 00:12:08,314 know, have a bad day and they're going to take it out on the kids. Yes. 168 00:12:09,123 --> 00:12:13,323 Obviously, these things. And you have a supervisor or a manager in each state, 169 00:12:13,383 --> 00:12:14,923 I take it, the same way. That's right. 170 00:12:15,123 --> 00:12:20,923 Okay. So someone who can look after their cluster of schools and their job, 171 00:12:20,943 --> 00:12:25,683 because we're a people business, we don't have a lot of machinery in our operation. 172 00:12:25,743 --> 00:12:27,383 It really is a people business. 173 00:12:27,743 --> 00:12:31,823 So we talk about the three R's that we have in the company, which are relationships, 174 00:12:32,183 --> 00:12:33,643 relationships, relationships. 175 00:12:33,643 --> 00:12:37,263 Relationships it's all about developing good professional relationships 176 00:12:37,263 --> 00:12:40,323 with the school leaders with the parents with 177 00:12:40,323 --> 00:12:44,143 the children our colleagues the regulators the 178 00:12:44,143 --> 00:12:47,323 offices that we might deal with at local state and 179 00:12:47,323 --> 00:12:50,563 federal government as well so there's a lot of stakeholders involved 180 00:12:50,563 --> 00:12:53,703 so we need people who have 181 00:12:53,703 --> 00:12:57,183 a bit of emotional intelligence can communicate their 182 00:12:57,183 --> 00:12:59,903 messages well but also at the end 183 00:12:59,903 --> 00:13:02,983 of the day they have a desire they want to be in this sector 184 00:13:02,983 --> 00:13:06,383 done it is hard work dealing with people continually absolutely 185 00:13:06,383 --> 00:13:10,743 so uh so we need to find the right people and support them well there are people 186 00:13:10,743 --> 00:13:14,603 who you know love that sort of work and there's other people of course that 187 00:13:14,603 --> 00:13:20,923 be quick to sort of go off the off the mark if you like and you've got to be 188 00:13:20,923 --> 00:13:23,743 careful who you do pick in that in that sense don't you. 189 00:13:24,403 --> 00:13:28,043 You're absolutely right paul first of all we've got to make sure we have the 190 00:13:28,043 --> 00:13:32,063 right character sector and that's why working with children checks, 191 00:13:32,283 --> 00:13:36,783 criminal record checks are an important part of not just our operation but for 192 00:13:36,783 --> 00:13:41,623 any child care provider and then the right character traits as you've said for 193 00:13:41,623 --> 00:13:45,103 someone that actually wants to work in the sector because as I said before, 194 00:13:45,343 --> 00:13:52,463 I could think of no worse job in the world if you didn't genuinely like educating and caring for kids. 195 00:13:52,583 --> 00:13:54,883 Imagine having to turn up day after day. 196 00:13:55,023 --> 00:13:58,183 So we need the right people for the role. 197 00:13:58,683 --> 00:14:01,323 People that can collaborate as well for us. 198 00:14:02,561 --> 00:14:08,161 Probably one of the differentiators we have, Paul, is we employ all our own staff. 199 00:14:08,461 --> 00:14:13,421 And what that means is we don't use agency staff to cover gaps, 200 00:14:13,641 --> 00:14:15,381 whether they're short-term or long-term. 201 00:14:15,541 --> 00:14:18,821 Now, that's a little bit more costly for a business because you have to invest 202 00:14:18,821 --> 00:14:20,481 more in your own recruitment team. 203 00:14:20,721 --> 00:14:25,701 But it does give you a better educator and it's caring for children. 204 00:14:26,641 --> 00:14:30,601 Yeah, because they know what is expected of them. Whereas from an agency, 205 00:14:30,721 --> 00:14:33,521 they've come from a lot of different jobs they've had. 206 00:14:33,781 --> 00:14:37,481 That may not be the way you work, the discipline you're getting at. 207 00:14:37,621 --> 00:14:42,361 And basically, if you've taught them, they'll do it your way. 208 00:14:42,461 --> 00:14:46,041 If someone else has taught them, they may do it their way, which is correct. 209 00:14:46,561 --> 00:14:48,221 That's very correct. Yeah, okay. 210 00:14:49,081 --> 00:14:54,121 So you've been going now for 20 odd years. Where do you see you going from here? 211 00:14:54,121 --> 00:15:00,981 How do you get more and more schools to engage your company? 212 00:15:02,281 --> 00:15:05,981 Well, one of the things that I'm actually quite proud of, and particularly of 213 00:15:05,981 --> 00:15:08,041 our people in this organisation, 214 00:15:08,501 --> 00:15:14,281 in this business, is that during the pandemic, when we had to lock down services 215 00:15:14,281 --> 00:15:16,361 and open them all at short notice, 216 00:15:16,541 --> 00:15:22,301 and there was a massive task in accounting for children that attended or those 217 00:15:22,301 --> 00:15:23,661 that needed to isolate, are late. 218 00:15:23,741 --> 00:15:26,041 We had to do regular reports through to the government. 219 00:15:26,421 --> 00:15:31,881 And so what I'm getting at is during that time, we needed to be adaptable and flexible. 220 00:15:32,041 --> 00:15:35,181 And we had the key people in the organisation to do that. 221 00:15:35,521 --> 00:15:40,061 And for us, that was essential for where we are in the marketplace, 222 00:15:40,261 --> 00:15:43,221 for the promises that we make to schools and parents. 223 00:15:43,421 --> 00:15:45,501 So we didn't compromise on our quality. 224 00:15:45,901 --> 00:15:49,521 And that was a tough task, but well worth doing. 225 00:15:49,801 --> 00:15:52,861 And so now that we've emerged on the other side of a pandemic, 226 00:15:53,041 --> 00:16:00,081 we have a reputation for fulfilling the promises that were made without having to cut staffing ratios, 227 00:16:00,681 --> 00:16:07,221 reduce the quality of the services or programming or resources or toys or games or any of that. 228 00:16:07,481 --> 00:16:12,541 And so we like to say that we have a little bit of credibility in what we do. 229 00:16:13,261 --> 00:16:17,281 And so if someone says, I can see that you've stayed true to your values, 230 00:16:17,301 --> 00:16:21,001 to your promises services throughout the tough times, they know we're going 231 00:16:21,001 --> 00:16:22,261 to do it throughout the good times too. 232 00:16:23,176 --> 00:16:27,916 And so now we're using that. As I say, we have been in the industry for, 233 00:16:27,956 --> 00:16:29,556 as you say, over 20 years. 234 00:16:29,656 --> 00:16:33,716 We have an excellent track record, great people working in the organisation. 235 00:16:34,376 --> 00:16:37,796 We can help schools with the services. That's got to speak for itself. 236 00:16:37,976 --> 00:16:42,916 The time that you've been in business and, as you say, you've got a good name 237 00:16:42,916 --> 00:16:48,956 in the industry and you've sort of looked after everybody in the right way to get the right people. 238 00:16:49,336 --> 00:16:53,956 And we were talking about staff before. all, how many staff have you got Australia-wide? 239 00:16:54,396 --> 00:16:59,676 Yeah, we've got about 450 staff Australia-wide, and they come in at different levels. 240 00:16:59,816 --> 00:17:05,156 So there's a small sort of central administrative and management team that are 241 00:17:05,156 --> 00:17:09,176 based in Melbourne, but representatives in other states around the country as well. 242 00:17:09,396 --> 00:17:13,896 And they all meet up every month. We fly everyone in because we think that meeting 243 00:17:13,896 --> 00:17:16,636 in person is a really important part of our operation. 244 00:17:17,276 --> 00:17:20,896 Then out in the services, we have a a service coordinator. 245 00:17:21,236 --> 00:17:24,616 That's a bit like an on-site manager that will do the programming, 246 00:17:24,996 --> 00:17:28,876 the compliance, and make sure that the before school care, after school care, 247 00:17:28,916 --> 00:17:33,616 and vacation care programs are well-structured, they're great quality, 248 00:17:33,796 --> 00:17:36,216 and they're a bit of fun for the kids as well. 249 00:17:36,556 --> 00:17:42,336 So they lead the program, but they may well be small teams. So it could be two, 250 00:17:42,516 --> 00:17:44,876 three, or four educators working together. 251 00:17:45,136 --> 00:17:48,956 So there's a lot of work to be done to make sure that those teams get along, 252 00:17:49,136 --> 00:17:53,696 they're harmonious, they respect each other and that they fulfill their role, 253 00:17:53,836 --> 00:17:56,196 but also the promises that we've made to parents. 254 00:17:57,160 --> 00:18:03,780 Deliver great quality education and care. So one of the things we focus on continually is storytelling. 255 00:18:04,380 --> 00:18:09,800 So you mentioned before a similarity between grandparents where they can give the children back. 256 00:18:09,940 --> 00:18:13,320 Well, we give the children back as well. And just like grandparents, 257 00:18:13,560 --> 00:18:18,480 we need to give the children back in a safe and sound condition, but with a story to tell. 258 00:18:18,800 --> 00:18:22,220 So we often say that when the child goes back to the parent, 259 00:18:22,360 --> 00:18:26,520 they need to be able to say, well, mum or dad, here's something I learned or 260 00:18:26,520 --> 00:18:28,960 created or did in after-school care today. 261 00:18:29,260 --> 00:18:34,460 And I was with the educator, Jim, and he was fantastic, and I want to go back tomorrow. 262 00:18:34,820 --> 00:18:40,300 So they have a story to tell about their experience, and that's where we're 263 00:18:40,300 --> 00:18:44,940 a little bit different at the Xtend group as well, in that we focus a lot on 264 00:18:44,940 --> 00:18:47,120 storytelling across the whole organisation. 265 00:18:48,240 --> 00:18:53,300 That will seem to be very happy about things, and all very diligently working there. 266 00:18:53,400 --> 00:18:55,700 Maybe it's because the boss is walking around. I don't know, 267 00:18:55,780 --> 00:18:58,940 but they seem quite a happy crowd. 268 00:18:59,120 --> 00:19:03,020 And that's a good thing to retain and maintain. 269 00:19:03,580 --> 00:19:09,720 Yeah. We're very fortunate in the caliber of people that we've got working in the organization. 270 00:19:10,420 --> 00:19:15,640 But I'd also like to think that's because with our senior team in particular, 271 00:19:15,820 --> 00:19:18,140 we've been able to create the right environment. 272 00:19:18,420 --> 00:19:22,980 And when you have the right environment where people feel a sense of belonging, 273 00:19:23,220 --> 00:19:27,640 that the the environment is on one hand non-threatening. 274 00:19:27,860 --> 00:19:33,960 So they can feel comfortable, they can speak their mind, but it also balances 275 00:19:33,960 --> 00:19:36,060 a little bit of accountability with that. 276 00:19:36,180 --> 00:19:39,300 So the environment's non-threatening. We want to hear your ideas, 277 00:19:39,460 --> 00:19:42,420 but if, for example, your manager listens to you and then says, 278 00:19:42,540 --> 00:19:46,680 we're not going to follow that idea, that that person's still resilient enough 279 00:19:46,680 --> 00:19:47,940 to carry on with their job. 280 00:19:48,180 --> 00:19:52,980 So we're looking for the right environment to empower people and then support 281 00:19:52,980 --> 00:19:55,980 support them so that they can get on and do their job and do it well. 282 00:19:56,560 --> 00:20:01,760 What do you see next for you, for the company, the Xtend group? What... 283 00:20:02,543 --> 00:20:05,363 Where are you heading now? What is the agenda from here? 284 00:20:05,903 --> 00:20:14,063 Are we looking to expand in other states or more in Melbourne or just improve on what we've got? 285 00:20:14,723 --> 00:20:19,123 Where are you going with the way that the company's tracking? 286 00:20:19,643 --> 00:20:24,583 Sure. Well, we'd certainly like to expand, but we want to make sure that our 287 00:20:24,583 --> 00:20:27,423 growth is what I would call controlled growth. growth. 288 00:20:27,683 --> 00:20:32,423 Now, not all businesses in our sector have had controlled growth. 289 00:20:32,703 --> 00:20:38,783 Some of them have poured in private equity or syndicate funding to buy business 290 00:20:38,783 --> 00:20:43,703 with high rents. What that means is you might win a school tender or a partnership 291 00:20:43,703 --> 00:20:47,563 by paying an extraordinarily amount of a high rent. 292 00:20:48,283 --> 00:20:52,443 Now, we've never done that. And the reason we don't is because then to make 293 00:20:52,443 --> 00:20:56,743 a service viable, viable, you need to cut costs and corners. 294 00:20:56,963 --> 00:21:01,463 And invariably, being a people business, it would mean we'd need to cut corners 295 00:21:01,463 --> 00:21:05,443 in the number of people and their capability or their qualifications. 296 00:21:05,903 --> 00:21:09,643 And we don't want to do that. We want to hold true to the promises that we've 297 00:21:09,643 --> 00:21:10,783 made to a school community. 298 00:21:11,303 --> 00:21:15,603 So we want to keep growing a controlled growth on that platform. 299 00:21:15,983 --> 00:21:18,423 For us, we have an an excellent reputation. 300 00:21:18,963 --> 00:21:23,243 Now, the reason I say that, Paul, is some people think childcare, 301 00:21:23,583 --> 00:21:26,623 that must be an easy sector to operate in. 302 00:21:26,683 --> 00:21:30,943 It must be warm and cuddly and inviting and everyone's friendly. 303 00:21:31,163 --> 00:21:34,763 It actually can be quite ruthless and it's highly competitive. 304 00:21:34,883 --> 00:21:41,383 And in the past, there's been all sorts of under the table deals done for businesses 305 00:21:41,383 --> 00:21:44,303 to grow in particular sectors or states. 306 00:21:44,803 --> 00:21:50,303 We've never entertained anything unethical. We've kept a good solid line on 307 00:21:50,303 --> 00:21:54,803 the way we do business and our accountability and the transparency. 308 00:21:55,363 --> 00:22:00,083 And so that has meant that we've got a good, strong, stable company in place 309 00:22:00,083 --> 00:22:03,003 now, which is well positioned to grow for the future. 310 00:22:03,363 --> 00:22:08,823 And I said before, we carry no debt. That puts us in a unique position as a 311 00:22:08,823 --> 00:22:14,563 major player within our sector to now utilise the good balance sheet that we've 312 00:22:14,563 --> 00:22:17,863 had and the funds that we've accumulated to grow into the future. 313 00:22:18,123 --> 00:22:23,583 So we feel we can do that without taking unnecessary risks, which then compromise 314 00:22:23,583 --> 00:22:26,783 the quality of education and care for children and for families. 315 00:22:27,323 --> 00:22:29,623 With funding, just going back to. 316 00:22:30,496 --> 00:22:34,976 Government funding and your own funding in the company. 317 00:22:35,416 --> 00:22:40,596 Just recently, government decided to increase the childcare expenses, 318 00:22:40,716 --> 00:22:43,636 if you like, in what you get as a funding. 319 00:22:43,936 --> 00:22:50,816 But at the same time, I noticed a lot of childcare-type places raised the rates 320 00:22:50,816 --> 00:22:55,456 to exactly the same amount as the government raised the income or their part of it. 321 00:22:55,616 --> 00:22:59,736 What is the situation there? You mentioned before that although they increase 322 00:22:59,736 --> 00:23:03,096 the income, there's a lot of businesses that are struggling. 323 00:23:03,456 --> 00:23:06,756 Actually, there is a lot of businesses struggling at the moment, 324 00:23:06,776 --> 00:23:09,176 and they're delivering negative profits at the moment. 325 00:23:09,316 --> 00:23:13,016 So they're running at some massive losses, particularly with the bigger companies, 326 00:23:13,276 --> 00:23:16,176 some of them in the case of tens of millions of dollars. 327 00:23:16,436 --> 00:23:20,276 So there's a lot of money that's evaporated in that area. 328 00:23:20,576 --> 00:23:26,956 So the question is, with such high government funding and subsidy, how can that be? 329 00:23:27,276 --> 00:23:32,376 Well, the key driver is at the same time that subsidies have increased for providers, 330 00:23:32,576 --> 00:23:36,736 so too has the cost of delivering a compliance service. 331 00:23:37,336 --> 00:23:43,056 Regulation has ballooned in the past few years, particularly during COVID. 332 00:23:43,776 --> 00:23:49,796 Government reporting, the same. The training that's required for educators in 333 00:23:49,796 --> 00:23:56,516 the business has also increased exponentially, and they have also incurred significant wage increases. 334 00:23:57,276 --> 00:24:02,476 So all those things need to be brought into the calculation on what fee needs 335 00:24:02,476 --> 00:24:07,976 to be charged to deliver good quality care, but still keep it affordable for families. 336 00:24:08,396 --> 00:24:12,236 Now, you're not alone in saying, but there's an amazing coincidence. 337 00:24:12,736 --> 00:24:17,896 Government increases the subsidy, childcare providers increase their fees. 338 00:24:18,236 --> 00:24:23,216 And part of that reason is it all happens around the 1st of July each year, 339 00:24:23,336 --> 00:24:25,156 the beginning of the financial year. 340 00:24:25,156 --> 00:24:28,116 That's when governments roll out any 341 00:24:28,116 --> 00:24:31,176 increase in funding through the child care subsidy the 342 00:24:31,176 --> 00:24:34,436 CCS but it's also when educators fees 343 00:24:34,436 --> 00:24:38,796 increase through the children's services award which is the award that most 344 00:24:38,796 --> 00:24:44,756 child care providers need to employ their educators under and typically most 345 00:24:44,756 --> 00:24:49,696 providers especially in outside school hours care will have an annual fee increase 346 00:24:49,696 --> 00:24:52,616 rather than several smaller smaller ones each year. 347 00:24:52,676 --> 00:24:56,696 And again, typically, to meet their obligations of wage increases, 348 00:24:56,776 --> 00:25:00,216 they tend to be around the first of July. The same times the funding is announced. 349 00:25:00,536 --> 00:25:04,416 Okay, that makes sense. And I can understand now that we used to... 350 00:25:05,578 --> 00:25:09,138 You know, everything else has gone up, but it certainly has gone up. 351 00:25:09,138 --> 00:25:14,338 And you see it in the supermarkets where, you know, one day it's $5 for a particular 352 00:25:14,338 --> 00:25:16,558 item, and the next day it's $5.30. 353 00:25:17,558 --> 00:25:21,998 And it seems to go up from there. And although they have all these specials, 354 00:25:21,998 --> 00:25:27,058 it still costs a hell of a lot of money to go and get some food out of the providers. 355 00:25:27,518 --> 00:25:33,198 Yeah. And we're no different in our sector because our parents, 356 00:25:33,318 --> 00:25:38,538 for example, will see a fee increase, but they'd like to understand that the 357 00:25:38,538 --> 00:25:41,798 mechanics behind it. Why is the fee going up? 358 00:25:41,898 --> 00:25:46,458 So it's actually important for us to be a responsible provider and let the families 359 00:25:46,458 --> 00:25:49,678 know how much more the staff are being paid, 360 00:25:49,818 --> 00:25:54,578 the increase in regulation, because we find most parents are actually quite 361 00:25:54,578 --> 00:25:59,638 reasonable once they can see that their fees have gone up a a certain percentage 362 00:25:59,638 --> 00:26:02,318 that correlates with wage increases, 363 00:26:02,518 --> 00:26:07,638 that correlates with the increase amounts that governments charge us to license a service. 364 00:26:08,098 --> 00:26:12,838 Then they can understand. It's that, I think people get a little bit miffed, 365 00:26:12,838 --> 00:26:15,938 and I can understand this, when they can't understand. 366 00:26:17,209 --> 00:26:22,309 The rationale, the reason for fee increases. So we have an obligation to explain that to them. 367 00:26:23,169 --> 00:26:26,029 With what you know, I've heard people sort of say, well, look, 368 00:26:26,089 --> 00:26:28,289 we're funding other people's children. 369 00:26:28,509 --> 00:26:33,009 But does it seem to you that people are sort of expecting more? 370 00:26:33,449 --> 00:26:37,429 I know they're having tough, but it's not only now, it's been going for years. 371 00:26:37,949 --> 00:26:42,269 Do you feel that they're being unreasonable for asking for more or getting free 372 00:26:42,269 --> 00:26:44,249 as they've been asking to be? 373 00:26:44,669 --> 00:26:49,409 Child care in the community. What's your opinion on that? 374 00:26:49,529 --> 00:26:53,809 It's an interesting one because you're right, that the federal government spends 375 00:26:53,809 --> 00:26:58,549 an enormous amount of money on childcare, $14 billion and increasing. 376 00:26:59,529 --> 00:27:03,789 And a lot of that goes to subsidising the fees for working parents, 377 00:27:03,889 --> 00:27:07,909 so those parents that use whatever component of childcare that they need. 378 00:27:08,229 --> 00:27:14,529 And so at the moment, as an average across the country, If not everyone gets 379 00:27:14,529 --> 00:27:17,089 the same amount of subsidy, it's means tested. 380 00:27:17,329 --> 00:27:20,809 But if I were to average it out, the government's footing the bill for around 381 00:27:20,809 --> 00:27:24,489 about 70% of the costs. That's pretty generous. 382 00:27:25,009 --> 00:27:28,269 In return, they're asking for certain standards of compliance, 383 00:27:28,729 --> 00:27:30,789 meeting regulation and quality as well. 384 00:27:31,029 --> 00:27:33,829 So in my opinion, that's all very reasonable. reasonable 385 00:27:33,829 --> 00:27:36,609 you're right though that it's the 386 00:27:36,609 --> 00:27:40,629 families or taxpayers that 387 00:27:40,629 --> 00:27:43,569 may be making contribution through their tax 388 00:27:43,569 --> 00:27:48,289 that aren't receiving that benefit back the argument is however that they're 389 00:27:48,289 --> 00:27:53,269 helping working families with children a better quality of education and care 390 00:27:53,269 --> 00:27:58,109 for those children who in turn will become taxpayers in time that contribute 391 00:27:58,109 --> 00:28:02,749 to society society in other ways that create a better place for everyone. 392 00:28:02,949 --> 00:28:07,249 I believe there is some argument in that, that we do need to make sure that 393 00:28:07,249 --> 00:28:11,489 in this day and age we are providing good quality education and care for children. 394 00:28:11,649 --> 00:28:13,069 It's not like the old days. 395 00:28:13,851 --> 00:28:17,091 Perhaps, Paul, when you were a boy and the same when I was a boy, 396 00:28:17,191 --> 00:28:21,871 where it was easy to walk home from school or grab our bikes and ride for the 397 00:28:21,871 --> 00:28:23,431 day and come home at dusk. 398 00:28:23,651 --> 00:28:27,631 Our children don't have those same freedoms or opportunities. 399 00:28:28,131 --> 00:28:32,911 So we can deliver some of those opportunities in outside school hours care and 400 00:28:32,911 --> 00:28:34,051 other components of childcare. 401 00:28:34,311 --> 00:28:37,071 And I think we do have an obligation to do that for them. 402 00:28:37,451 --> 00:28:42,971 Actually, that was well covered. It makes sense. And generally in the public, 403 00:28:43,151 --> 00:28:45,591 it's usually that everyone's looking after themselves. 404 00:28:46,651 --> 00:28:51,051 And basically their argument was, as I said before, like they're not my children. 405 00:28:51,451 --> 00:28:54,751 They had the children. They should pay for it. And I understand what you're 406 00:28:54,751 --> 00:28:55,831 saying, which is really. 407 00:28:56,151 --> 00:29:00,551 And at the same time, I think the government is being generous with the 70%, 408 00:29:00,551 --> 00:29:06,411 even though not all the parents get 70% of whatever they've got to pay, 409 00:29:06,511 --> 00:29:10,211 depending, as you say, on their means test, which I wasn't aware of. 410 00:29:10,211 --> 00:29:13,611 I thought it basically was this is it. You've got one child. 411 00:29:13,711 --> 00:29:16,151 You get X amount of dollars. If you've got two children, you get X amount of 412 00:29:16,151 --> 00:29:17,631 dollars. And I thought that's it. 413 00:29:17,771 --> 00:29:20,711 But I can understand when you say it's means tested. 414 00:29:21,051 --> 00:29:25,611 So overall, it does make sense what you're telling me. It's very good. 415 00:29:26,031 --> 00:29:31,491 Yeah. So you've got to go shortly. I do in a few minutes, I'm afraid. 416 00:29:32,411 --> 00:29:37,591 Well, we won't hold you up anymore. So thank you very much for having a talk 417 00:29:37,591 --> 00:29:41,951 to us and putting us straight on what's happening in the childcare area. 418 00:29:42,891 --> 00:29:46,731 And good luck. And as I say, thank you very much for squeezing us in today. 419 00:29:47,211 --> 00:29:48,911 Thanks, Darren. Talk to you soon. 420 00:29:49,451 --> 00:29:53,151 That was very interesting, actually, speaking to Darren. I trust you found our 421 00:29:53,151 --> 00:29:54,131 little chat informative. 422 00:29:54,951 --> 00:29:59,771 And we look forward to speaking with you shortly in the not-so-distant future. 423 00:30:00,011 --> 00:30:03,111 Have a good day. Thank you for listening to Why Is It So? 424 00:30:03,391 --> 00:30:08,571 Make sure you tune in to our next episode. Remember, it's your last defense, but common sense.