Profits for the people: how one UK model is rewarding educators through profit share
What would you do with AU$1,337 which appeared in your bank account as a thank you for your hard work with children and families? Go on a holiday? Complete repairs around the house? Pay down some bills? For a group of early childhood education and care (ECEC) professionals working for UK nursery group Childbase Partnership – who visited Australia last year to learn from teams at Goodstart – this isn’t a hypothetical question.
Educators and others working for Childbase have recently received £750 each (AU$1,337), tax-free, as a share of the profits made by the business in 2018. Using a partnership model, Childbase gives a share of profits to employees, who have a stake in the ECEC services they run.
Nursery World reported that one of the room leaders will use her windfall to go to Iceland; and, a trainee working with Childbase will use her funds to visit America and meet her three year old nephew for the first time.
“Knowing that my hard work and enthusiasm for the job has helped make this payment possible makes me feel valued and proud to be part of a thriving employee-owned company. This is the perfect way to start a new year,” she said to Nursery World.
Leoni Brown, who is also a room leader with Childbase, told Nursery World that the payment was especially significant for her because she is a member of the governing body which represents all employee-owners, and plays a large role in the decision making of the company.
“I have been part of the process in fixing and approving the final amount of the dividend payment, so it is very exciting for me and for all of us. Having a say in how the company is run and then sharing the rewards of our hard work really does make our ownership very real,” she said.
In 2018, UK publication Nursery World, reports, there was over £1.2 million (AU $2.1 million) in dividends available to staff as part of the profit pool. All staff share in the dividends, regardless of qualification or time spent in the role, and those who work part time receive a pro-rata share of profits.
In a letter to all staff, Childbase Partnership Founder and Chairman Mike Thompson reportedly wrote: “The important thing to remember is that this payment is based on hours worked so full-timers – from apprentices to the chairman – get the same Partnership Dividend payment because we are all owners and everybody’s contribution, irrespective of their role, is vital to our success.”
The process to move from individual shareholders to a model of a long-term trust, with educators benefiting from investing in their services, commenced after a company-wide vote was taken to gradually move from a shareholder model. In 2015, close to 50 per cent of the shares were held either by individual employees or by the Employee Benefit Trust, with the target of seeing the employee shareholding increase to 100% by 2025.
So…what do you think? Should those who work in centres and services day-to-day share in any profits made? What might be different in your centre or service if you moved to a profit sharing model? Share your thoughts with us below.