We have now completed our 2017 review into Remuneration and HR Issues in Aged Care and Community Services. Thirty four organisations with a combined turnover of $1.69 billion made it a robust insight into the sector for 2017.
This year, these organisations grappled with rapid change and funding issues. The full roll out of Consumer Directed Care in Home Care as well as the restructuring and reduction (in real terms) of ACFI payments in Residential Aged Care have placed increasing financial pressure on providers in both the Home Care and Residential Care Sectors. On top of these pressures the sector continues to struggle to attract and retain quality staff. The combination of these factors means that the employment and retention of quality staff is now one of the sector’s highest priorities.
Additionally, despite the media coverage associated with statements that wages are falling behind in real terms due to our current low inflation economic environment, the recent National Wage Case decision to apply a 3.3% increase to Modern Award Rates has a much wider application and flow on effect to the sector. The extent of this flow on effect will become clearer when our 2018 review is completed.
Establishing the appropriate minimum base wage is essential to maintain salary and wage competitiveness for the sector, however providers will need to fund these increases through productivity improvements rather than relying on increases in government subsidies. Therefore the challenge for providers is how to improve productivity.
Realise Performance have developed proven strategies that can assist providers to maximise productivity improvement opportunities and we would be happy to discuss this with you.
Since the surveys have been released, we have focused on assisting participating organisations to establish what actions they need to take to ensure that they are paying appropriately, and optimising their workforces for these future workforce challenges.
Our take on the key issues:
Insights from our Remuneration Specialist, Kris Berrell
Amongst our survey participants, generally, movements in remuneration for the Sector’s Administration and Executive positions were centred around base salary. As with findings in prior years, there was limited ability to focus on incentive payments or other benefits structured to drive discretionary performance. This appears due to limited funding and constraints around mandatory increases dictated by Industrial Agreements.
Predominantly, outside of base salary, remuneration in the sector (particularly Not for Profit providers) is focussed on utilising the unique benefits structure as it relates to Fringe Benefits Tax (FBT) exemptions for Public Benevolent Institutions (PBIs) and Meal Entertainment Allowance.
Key HR issues this year for this sector were centred around workforce demographics - with a typical Aged Care and Community Services employee being female, aged in their 50’s, working part time and having less than two years’ service with their current employer. This puts substantial pressure on an already stretched workforce to retain these employees and diversify their workforce profiles. Employee turnover also continued to be a large problem with voluntary turnover rates in Aged Care and Community Services appearing 60 per cent higher than other industries combined.
What you need to know:
- For all industries, reviewing remuneration of your workforce is of increased priority, given the recent changes announced in minimum wages,
- For Aged Care and Community Services organisations, reviewing workforce planning, attrition, recruitment practices and ensuring competitive remuneration remains a priority as the sector continues to grapple with further change and funding restrictions
- In terms of next steps, if you are an Aged Care and Community Services organisation that participated in our 2017 survey, we would encourage you to attend our July Webinar for further insights into the findings for this year. We will also be reviewing the feedback we have received from you about this year’s survey process and proposed changes we will make for 2018 to ensure this is most effective for you.
What you need to do:
For those organisations that participated in our 2017 Review or purchased a copy of this year’s report, we will be running a Webinar in July to elaborate on these topics and details of how to register will be advised shortly. We encourage you to attend - as this is included in your existing subscription fee to our surveys.
For other Aged Care and Community Services clients, you still have the opportunity to purchase a copy of the 2017 Remuneration and HR Benchmarking Report for Aged Care and Community Services. For enquires about this please contact Elly Beck.
Registrations for our 2018 survey will open in October this year. Please let us know if you are interested in participating in next year’s survey.
Do you have an individual remuneration issue that you need to address? For all industries and job types we can conduct customised remuneration benchmarking for individual roles.
For further information about the recent announcement by the Fair Work Commission regarding the 2017 Annual Wage Review, please see: