Care sector changes reliant on good payroll strategy

2nd August 2016

Care sector balancing the booksThe introduction of the National Living Wage (NLW) in the care sector, and subsequent uncertainty of occupational migration post Brexit, creates a situation where the understanding of care sector payroll will play a key strategic role in the success of care home operators over the next few years.

Being able to flexibly manage the payroll is obviously key, but having access to a key suite of management reports to be able to dynamically interrogate data, to fuel the tactical and strategic make-up of the workforce, has now come into its own.

With a recent Christie & Co report highlighting an average 4.7% hike in wages in every year till 2020, the sector will need to look intelligently at how management, nurses, carers, care assistants and other staff are used. Raising the pay of the lowest paid and largest workforce in care to comply with the law change creates a headache not just there but in pay across all pay grades.  Freezing pay amongst higher paid staff to compensate for the increases causes by NLW will only result in an exodus of staff from the business.

Employment in the sector has been populated by a good number of EU migrants, and also a downturn in qualified UK trained nurses. There will be growing pressure to plan over the next few years for when Britain finally moves from the EU. Being able to effectively manage care home payroll and staying on top of burgeoning legislation will continue, but payroll can play a part in understanding how apprentices, zero hours contracts, under 25’s, migrants, qualified and unqualified staff can be used flexibly and effectively.

It’s a fine line however, and the need to balance the books and create a decent level of profit need to be weighed against the critical need to maintain a good standard under CQC inspection and a decent care home patient experience. Understanding Payroll effectively helps achieve that goal.