In this guest post, Matthew Goh, Client Manager at HR technology business Carebridge, outlines the impact of the Fair Work Commission’s wage increase on providers, including an influx of largely inexperienced applicants, additional strain on recruitment teams and an increase in new hire staff turnover. He highlights the opportunity of automation and AI to reduce the burden.
As the aged care sector emerges from the ashes of the COVID-19 pandemic, the Fair Work Commission (FWC) Work Value Case decisions have been welcome news to the battle-hardened aged care workforce. A summary of the key highlights of this case are:
- Work Value Case Stage 1 (Nov 2022): 15% aged care worker wage increase announced
- Work Value Case Stage 2 (Feb 2023): Stage 1 increase to take effect from 30 June 2023
- Work Value Case Stage 3 (Mar 2024): Up to 28.5% frontline aged care worker wage increase (includes Stage 2 increase) – effective date yet to be determined
This increase has made the sector more attractive to blue-collar workers and re-balanced aged care wages compared to other adjacent care industries (e.g. disability, childcare, acute healthcare). The above graph of Seek employment data measuring the number of applications per job ad posted in the aged care sector compared with the national average indicates the following:
- As of Feb 2024, the number of applications per job ad in the aged/disability sector has tripled compared to COVID-19 levels.
- As of Feb 2024, the number of applications per job ad in the aged/disability sector is double the current national average benchmark.
- With another round of increases (Stage 3) to be implemented in the foreseeable future, this trend is expected to continue.
Part of the workforce supply increase can also be attributed to the government’s decision to fully subsidise (i.e. gap-free) aged care certificates, further encouraging unqualified workers to switch industries or younger workers to upskill.
This article aims to understand some of the organisational workforce impacts of these aged care wage increases.
New supply of workforce largely inexperienced
Given the earliest decision announcement of the Work Value Case was Nov 2022 and the lag effect of obtaining relevant aged care qualifications and the job search duration, all new workers into the industry would likely have less than a year’s experience in the care sector. Finding an experienced worker in the industry becomes akin to finding the needle in a larger proverbial haystack.
Increased new hire turnover
The attraction of fresh workers into the aged care industry will also mean that this is the first care role for many. Some quickly discover that chasing an extra few dollars per hour to provide personal care to an older adult may not be their cup of tea. This usually occurs within the first three months of a new employee commencing.
As a result, more resources have to be poured into orientation, training and ongoing support of inexperienced new hires. Inevitably there will likely be greater attrition of workers within the early stages of their foray into aged care.
Increased workload of Talent Acquisition Teams
The biggest negative impact will be on an organisation’s recruitment team. The increase in the volume of job applications will result in the need to filter through a large proportion of inexperienced applications to identify the right candidate.
Many small to medium-aged care providers who still use email inboxes for recruitment may have experienced difficulty in managing the flood of applications and may have resorted to pulling in additional help with email processing (e.g. reception, admin assistants). Furthermore, to combat challenges with new hire turnover, recruiters also need to screen candidates to try and understand if they are the right fit for this sector.
Significant growth opportunities for home care providers
Traditionally, residential aged care has been the mainstay of the aged care sector. Yet the growth in residential aged care is constrained by bed stock and is highly capital intensive. On the other hand, the provision of home care services is capital-light and in line with the government’s broad direction for ageing-in-place and in-home care.
During the COVID-19 pandemic, many home care providers had to close their doors to new clients as a result of severe workforce shortages. Growth in home care was mainly constrained by the lack of workforce. This trend has now reversed and home care providers who are nimble and able to utilise technology to scale up their workforce will see the greatest benefits from this Work Value Case.
So What?
Having worked in the aged care sector for over a decade, I found a tongue-in-cheek meme (above) on the internet especially true. The sector has traditionally been a slow adopter of technology and many tech companies find penetrating this sector more difficult than other industries such as fintech, mining, oil and gas, etc.
Without naming names, I worked in an organisation in the 2010s that was using carbon copy triplicates for leave applications.
Most companies increase recruitment of FTE and other FTE resources to deal with these workforce challenges described above. However, I believe that the time is ripe for automation and AI to play a role in being the “stitch in time” that “saves nine”.
