Preschool Sector: Where does the road to recovery lead?

Post the COVID19 crisis, while it may take a long time to get back to “real normalcy”, there are speculations and predictions galore at the new "normals" in various sectors. We, at Kreedo, too decided to have a go at forecasting some changes in the preschool sector for this year in India, especially in the affordable and mid income groups.

With a large percentage of the population moving from cities back to their towns and villages for at least 1 year, there is likely to be a spurt in the demand from Tier 3 and 4 for quality (read “City type”) education. While this will see a spurt in investment in EdTech for higher classes, for preschools this could mean a good growth for activity based learning and programs with higher learning outcomes. Here are parents who will ask to know what their child is learning at school, having done that in cities already. Schools will have to up their game, which is a wonderful opportunity for semi-urban India.

In rural India people who may already be sending their children to school with reluctance due to affordability, could see more children dropping off, especially girls. The farmers are struggling from the supply chain hits and this may continue without a short term solution. So it will be in rural India that the worst impact of the crisis in the education space could be seen. Many families may have everyone in the family pitching in to help at times like these.

In urban India, more members of families in lower income sectors may be forced to look for jobs to make up for pay cuts and revenue losses. For instance, an auto driver who has been badly hit economically would probably need his wife to start working. Hence in the cities, affordable private schools (APS) and government schools should definitely see a rise in admissions to accommodate the child while at work.

There will be a trickle-down effect from the most expensive schools with more people preferring a cheaper school option for this year for their children especially in lower classes. So we could expect to see a reduction in numbers in schools that are in the higher fees category (especially Rs 50000+). So while APS parents may choose government schools, the parents who would have chosen a mid-range school would choose an APS.

Since many parents in APS schools and preschools either delay or sometimes even skip paying fees, cash flows have always been an issue. Now with a slightly higher income group coming to the schools, this problem maybe slightly mitigated.

For instance, a parent who would have otherwise paid Rs 40000 as school fees, would now request the child’s school for a fee cut or move to a school that charges Rs 25000. It may mean that she/ he pays the fees on time because it is a lower fee, leading to slightly better cash flow in lower income schools. (This is debatable though since liquidity is going to be low in the market overall)

Availability of qualified people who can come in as teachers and support staff will go up significantly with more people taking up jobs. With the huge unemployment to be expected in the industrial sector also, many will look at alternate professions of teaching, school maintenance, administrative staff, security etc. Demand for teacher training courses should see an upswing. Migration of people to rural and semi urban areas from the cities will now make teaching staff available in rural areas as well. This of course sadly will mean further pay cuts for teachers with supply being much more now.

Preschools will benefit the most because many parents may not want to send their children to a very crowded school, they would want a personal assurance from owners with respect to health and safety. We, as solution providers for affordable schools / preschools, are already seeing a growth in this space even amidst the gloom of the lockdown. Many of our prospective clients who are at home seem to have had time to give their dream of starting a preschool more thought, and are reaching out to set up schools, and are taking this time to get ready with online training.

All this of course assuming the economy is not shattered to a point where education remains an unfulfilled dream for many. If we get agriculture and manufacturing supply chains up and running in the next one month, perhaps we can start recovering from there.

So hoping we start recovering soon, here are 8 rudimentary post-COVID guidelines for preschools:

1.    Safety and sanitation will be paramount. Regular disinfecting will need to done and the same must be communicated to the parents. Schools that had low hygiene standards will have to now buck up.

2.    Overcrowding maybe an issue. Parents may not be very comfortable with children sitting on top of each other. So it may be a good time to increase the number of sections if you have a lot of admissions.

3.    With liquidity and pay cuts being the order of the day, staggered fees will become the norm. Schools will need to provide quarterly / monthly fee structures. Preschools / schools have to be prepared to cut their fees in the short term, else lose out on admissions.

4.    Longer hours may be needed with both parents being at work. Day care should see a boom in urban India. And all the preschools which were running for only 2 hours as play homes, may need to change their style of working.

5.    Individualized learning / Montessori type environment will also help as when children work with activities individually, social distancing is automatically taken care of.

6.    Urban schools with children from middle and above income groups will definitely see requests from parents to address the emotional development of children, building resilience to crisis like these. (We are hearing about many children being depressed at the new lifestyle and being unable to deal with it). So emotional development will need to be a key aspect of the curriculum.

7.    Business Continuity Plan will start becoming essential even for schools / preschools. So backup ed-tech combined with processes to assign long term home assignments in case of future lockdowns will be needed. Else parents will soon start asking for a fee cut saying the children missed this many days of schools, especially in lower income groups.

8.    Teachers will need to get tech savvy if they have to use times like these for further skill building.

So to summarize, in rural India, not very bright prospects, we may have to really look hard at how to keep children at school in higher classes and support their learning, preschool enrolment and anganwadis may not be as affected as higher classes because parents may still need someone to look after their children while at work. Some silver lining perhaps for the preschool space in urban and semi urban India, in terms of many players being forced to up their game to provide better learning, more teachers available, more parents sending their children to schools and choosing better but affordable schools.