Turnover Is Falling. That Is Not Good News.

Staff turnover in group-based early years provision has fallen from 19% in 2023 to 14% in 2025. Roughly one in seven staff now leave their provider in a year, either for another provider or out of the sector entirely. School-based provision runs at about half that, 7%.

Read quickly, that looks like the workforce crisis easing. It is not, and the reason it is not should change how you read your own numbers.

1. The Rate Moved and the Cause Did Not

Nothing that drives people out of early years has improved. Pay for group-based staff sits at the 13th percentile of the national earnings distribution, meaning 87% of employees in the wider workforce earn more. Early years staff earn around 30% less than otherwise similar workers. Pay has not improved in real terms since 2023.

The NFER's reading is that the fall in turnover most likely reflects the slowing down of available opportunities rather than any improvement in conditions. Fewer people left because fewer people had somewhere to go.

2. A Frozen Labour Market Is Not a Retention Strategy

This is the part that matters commercially. If your turnover improved over the last two years, the sector-wide data suggests you should be slow to claim credit for it. The same improvement happened to groups that did nothing at all.

A labour market that has seized up suppresses turnover. It does not remove the conditions that cause it. When opportunities return, so does the churn, and it returns fastest in the groups that mistook a market condition for a retention strategy and stopped investing accordingly.

3. The Workforce Has Stopped Growing

The Department for Education estimated the early years workforce needed to grow by 35,000 between December 2023 and September 2025 to staff the expanded entitlement. Between 2023 and 2024 it grew by nearly 20,000 and looked on track.

Between 2024 and 2025 it grew by 628 people. That is 0.2%.

For an operator this is the supply side of your staffing model going flat at precisely the moment policy is expanding demand for places. It is also why the low turnover figure is fragile. There is no slack in the system to absorb a return to normal churn.

4. The Pay Gap Is Widening Where It Costs You Most

The pay gap against similar workers is not uniform. For higher qualified staff it has grown from 34% in 2023/24 to 39% in 2024/25, and successive National Living Wage increases have compressed pay structures so that the premium for holding a Level 3 has narrowed.

Your most qualified people are therefore your most underpaid relative to the outside market, and the financial reason for them to have qualified in the first place is thinning. That is a retention risk concentrated exactly where replacement is hardest and where ratio compliance depends on it.

5. The Cost Is Deferred, Not Removed

Nobody in the sector publishes a cost per leaver, which is why almost no group knows its own. It is not difficult to build. Placement or advertising cost, enhanced DBS, induction and initial training, and the premium paid for agency cover across the vacancy.

That last component is usually the largest and the one groups underestimate, because it is spent gradually and sits in a different line of the P&L from recruitment. Run the calculation across your leavers for the last twelve months and you will have a number that is almost certainly larger than anything currently budgeted as recruitment spend.

Do it now, while turnover is at its lowest in years, because that is the number you will be exposed to when the market loosens.

What to Do About It

Know your own rate by setting, not as a group average. The group figure hides the settings carrying the problem, exactly as it does with funded hours.

Build your cost per leaver from your own four components rather than a sector benchmark. It is the only version anyone will act on.

Test your qualified staff separately. The Level 3 population is where the pay gap is widening, where replacement is slowest and where your ratios are least forgiving.

Turnover being low is not the same as retention being solved. One of those you have earned. The other has been lent to you.