New solutions needed for aged-care sector worker challenges

Aged care facing impending shortage of workers

Australia has struggled to prepare for the workforce challenge looming in the aged care and not-for-profit health sectors. As the population ages, community expectations are increasing and require organisations to build larger and more capable workforces equipped to meet these demands.

The Committee for Economic Development of Australia (CEDA) has released a new report indicating 17,000 more direct aged care workers are required to enter the existing 240,000 person workforce to meet basic standards of care. Without this, the shortage will balloon to more than 400,000 workers by 2050.

To further unpack these workforce challenges, the Davidson Business Advisory Team hosted a round table discussion with industry experts and an aged-care provider to share current challenges faced by these organisations - and share solutions to overcome them.

COVID-19 impacting current situation

Immigration has been used in Australia as a way of addressing shortages of skills in the labour market. The overarching impact of world events over the last 18 months has created a freeze in migration and the availability of employable talent across many industries in Australia.

The aged-care sector holds a strong reliance on migrant workers who currently make up 30% of the workforce. Given the ongoing visa and border restrictions due to COVID-19, the current rate of migration is going to compound the frustrations the sector are facing with filling the significant gap that is growing for workers to meet the existing and emerging demands.

Across the nation, ongoing policy reform in response to the pandemic is further disrupting the sector. In a bid to boost vaccination rates, the government announced all aged-care residential workers are required to have received their first vaccination by 17 September 2021 or face exclusion from the sector. In some States, everyone including essential workers have been confined to their Local Government Area or a 5km radius. These ever-changing conditions could see a large portion of the workforce lost. This poses the question: If demand is soaring and supply remains constrained, how will the two ever balance?

Low wages are limiting both recruitment and retention in the workforce

Any efforts to gain new entrants to the workforce will likely be offset by the high-turnover this sector faces. From our conversations, we heard the highest turnover is likely to occur in the first six months of placing a candidate. This is due in part to a lack of understanding of what the job entails, or candidates seeing the position as a placeholder, but largely due to the pay conditions.

The sector needs to offer better wages and conditions in line with comparable sectors to hold any chance when competing for talent. The Royal Commission acknowledges this and recommends unions, major employers and the Morrison government collaborate to increase award wages in the sector, which will obviously put pressure on operating costs.

Working hours are not retaining the workforce

An area with more complexity and worth exploring is the allocation of work hours for this workforce. The nature of work in this sector does not allow for the same solutions other industries may be adapting to overcome the emerging gaps in the labour market. Medical advancements and intervention are resulting in people living longer and their needs are becoming more complex.

This poses a difficult challenge for the sector due to the insufficient resources to train every employee on every complexity. As a result, the framework of rosters is based on skillset more so than availability, leaving organisations faced with roster gaps for some, and significant overtime for others.

The CEDA report found that around 30% of those in residential care and 40% in home care want more working hours, and more than 10% hold a second job. The report recommends employers need to improve their focus on rostering and adapt digital solutions to better utilise the existing workforce. While the government needs to create a new dedicated migration path to boost the labour market.

This should begin by including aged care to the specified work requirements to extend visas and allow workers on visas working in this sector to stay with an employer for longer than six months. The report also recommends the number of hours international students are allowed to work in the aged care sector should be increased.

Limited focus on career development and progression

Another area warranting investigation is career development opportunities. Aged care workers cite lack of career progression, training and development as their main reasons for leaving the industry. The government is yet to accept and approve the Royal Commission recommendation that a mandatory minimum qualification of Certificate III for personal-care workers is required.

The sector may wish to incentivise this qualification with promotions and wages. As it stands, wages are not seen to increase adequately as staff become more senior. Lack of development and pay progression are limiting career pathways, and inhibiting the workforce to see this as a career for life (or at least, the long-term).

New solutions required to overcome the looming shortage

As the economy transitions from recovery to expansion, wage pressures and increased competition for skills in the local market are increasing. Organisations are being forced to rethink how they can attract and retain the skillsets they require to meet their service demand.

Deliberate effort to be leading practice in the sector and secure local talent is critical right now. Organisations will need to embed a reputation as an established Employer of Choice within their regions as well as maximise their existing resources in order to meet future service delivery demands.

With the significant reduction of immigration, and the increased competition for local talent, candidates have the power in the local labour market right now. While this sector has a strong desire to hire people who connect to the purpose of the role, providing a purpose is not enough to retain talent without the right remuneration and development opportunities in place.

In times of a talent attraction and retention crisis, we believe organisations need to step away from the default behaviour of ‘do more with less’ and instead develop the right strategies with their existing workforce and ‘do less, better’.

It’s not just about talent pipelines and attraction, it’s about what services are delivered and reimagining how you go about it. Workforce crisis is as much about what you do and how you do it, as it is about who, and how many, you have to deliver your services.

Cross-industry collaboration is critical to address bureaucratic and regulatory barriers to accessing skills. This includes challenging collective perspectives and workforce arrangements.

At Davidson, we stand for workplace performance. This is about right people with the right skills in the right roles, but it is also about creating a workplace that delivers outcomes through its people and doing the things that matter most. This is why we take a multifaceted approach to resolve these looming challenges and complex problems.

To discuss innovative ways to address your workforce challenges and improve workplace performance.