How can care homes prepare for the National Living Wage?

The National Living Wage is scheduled to come into force in April 2016, meaning that workers over 25 will be legally entitled to £7.20 an hour, increasing to £9 by 2020. With nearly two thirds of the one million carers in the UK currently being paid below the existing living wage, the increase in costs could have a financial effect on care homes around the country. The 5 biggest care providers have said the pay increases could result in a “catastrophic collapse” in the care sector.

Why will this affect the care sector so much?

Staff wages are the biggest expense a care home has to face, on average 60% of a care homes expenditure is spent on wages.

Care England, whilst agreeing that care workers around the country deserve a pay rise for their consistently good work, feel they need the assistance of local councils. The chief executive of Care England, Martin Green has said; “The care sector welcomes the National Living Wage and has long campaigned for it to be introduced. “However, it is not sustainable for us to meet the increased cost of care when local authorities are already paying well below the true cost of delivery.”

Our recommendations

We understand that the National Living Wage increase will put a strain on your business, so there are several areas to look at that can improve the running and efficiency of your care home.

1. Managing overtime

With wage rising it is highly unlikely that your home will be able to pay premium costs on things such as overtime. It may be worth thinking about staggering shift starts and finish times so you also have the correct amount of staff on duty at all time, whilst avoiding the added costs of overtime.

2. Keep up to date with new legislation and ensure compliance when the CQC visit

New legislation is continually emerging in the care sector, so it’s important that you stay on top it. It is especially important as the CQC has vowed to inspect every care home in England by 2016 (link to news article). Make sure you’re on top of HR and Health & Safety to make inspections easier to manage. There are a number of online tools that can help streamline this for you, and they can also save you time.

3. Get the best from your employees 

It’s important to get the best from your workforce on every step of the employment journey. Now is a great time to revisit your performance management policies (link to free guide) to ensure that you are aware how each member of staff are performing against pre-discussed targets. This will help you manage employee performance, and more importantly progression.

4. Redundancies

It’s something that no manager wants to consider, however, it is an issue that may have to be discussed. If redundancies are anticipated it is important that your existing procedures and policies are examined, this is vital so that as an employer you are protected if you choose to investigate redundancy options.

We can help

With over 20 years of experience within the care sector, and partnerships with Care England, Scottish Care, NASHICS and over 35 regional care associations throughout the UK, we understand the things you’re worrying about. We can help your care home with all of your HR and Health & Safety issues, and as a Citation client you will have access to our 24/7 advice and online tools that will make your life much easier.