G8 confirms Q1 occupancy constrained by educator shortages
The Sector > Provider > General News > G8 highlights occupancy challenges posed by workforce constraints as an ongoing issue at 2023 AGM

G8 highlights occupancy challenges posed by workforce constraints as an ongoing issue at 2023 AGM

by Jason Roberts

April 21, 2023
Educational resources in a G8 centre

G8 Education has reported that the start of 2023 saw significant improvements in year on year trading performance but highlighted that occupancy remains constrained in some areas of the network due to ongoing workforce educator shortages at its Annual General Meeting. 


“Group occupancy improved steadily in the first quarter in line with expected seasonality,” Pejman Okhovat, Managing Director and CEO said, “however, occupancy remains constrained, although not uniformly across our portfolio, due to sector wide workforce shortages.”


Group core occupancy, across the network of more than 400 centres, was 66.2 per cent in March, 0.5 per cent higher than the same period last year and 2.5 per cent lower than March 2019, the last equivalent reporting period before the COVID-19 pandemic hit. 


Overall, 46 per cent of centres reported occupancy above 2019 levels and 34 per cent reported occupancy below, having been impacted to various degrees by sector workforce constraints, including formal and informal occupancy caps and high team turnover. 


A further 20 per cent of centres also tracked below 2019 levels but for other reasons such as operational, location and competition challenges. 


Profitability bounces back substantially in Q1 2023 with strategic goals in track


G8’s first quarter 2023 profit improved significantly on last year’s Omicron and flood impacted results with earnings returning to a more normalised range of between $9 and $10 million operating earnings before interest and tax (EBIT).  


The group benefited from an improvement in agency staff usage which now sits at 2.6 per cent but also more effective workforce planning, cost discipline and prudent management of the business during the recent inflationary impulse that has impacted all businesses across Australia. 


In line with many approved providers across the early learning sector G8 has invested heavily in improving educator attraction and retention rates via a range of inward and outward facing initiatives. 


This multi pronged strategy, Mr Okhovat noted, is yielding strong results, with placement of Early Childhood Teachers increasing by 15 per cent year on year in December 2022. This pleasing performance has continued into CY23 with a further improvement of 16 per cent at the end of Q1 compared to Q1 2022, he added. 


Wage remediation program progressing with 80% of impacted employees remediated


David Foster, Chairman of G8 Education, noted in his address that the Group has now managed to locate and pay back 80 per cent of the total number of team members impacted by the non compliance issues under the Children’s Services Award and Educational Services (Teachers) Award identified in late 2020


Continued efforts via an outreach and advertising process are ongoing to connect with the balance of team members not yet connected with G8 continuing to engage with the Fair Work Ombudsman in connection with the matter. 


Elsewhere, Mr Okhovat highlighted that the Group’s greenfield pipeline is now eleven centres and that a disciplined approach to further expansion will be conducted in line with its broader leasing strategy and that capital and cost management discipline will continue to be focus for the Group. 


G8 will provide a further update on trading conditions at its half year results in August 2023 and intends to provide a Strategic Update in Q3. 


To read this years AGM addresses click here

Download The Sector's new App!

ECEC news, jobs, events and more anytime, anywhere.

Download App on Apple App Store Button Download App on Google Play Store Button