Nov 03, 2017

Skill Shortages in the Aged Care Sector: The Role of Wages

The aged care sector needs to improve its workforce. The sector currently has more than 250,000 direct care workers. There are a number of reasons why aged care staff are struggling to care for Australia’s elderly.

Some facilities find that they are too short staffed, having one carer or nurse be responsible for a large group of residents. While others find that their staff are not adequately trained with the basic skill required of the job.

The expected large rise in the demand for more and better quality supports makes workforce issues critical, which is what Professor Kostas Mavromaras spoke about at The Next Phase of Aged Care Reform in Sydney.

He explained that the sector has seen warnings of too low wages and of skill shortages and he noted that although the overall wage bill of the sector is remaining low, skill shortage pressures are reducing in the residential sector and have remained unchanged in the community sector. This goes against the usual tenet, that where there are skill shortages there will be wage pressures. His talk focussed on the connection between low wages and skill shortages motivated by the 2011 Productivity Commission’s wage pressure warnings.

To better understand the “aged care worker”, Prof. Mavromaras used the 2012 and 2016 National Aged Care Workforce Census and Surveys (NACWCS 2012 and 2016) which he and his team at Flinders University have conducted for the Department of Health with information on more than 4,000 employers and 15,000 workers.

For example, in terms of demographic changes, the population is getting older, with ”deep old age is becoming a lot more common. Thus, the demand for all different types of care is increasing in number.

Aged care sector is made of a hybrid public-private model of provision, with clients use a mix of residential and community (home) care supports.

With a larger number of more wealthy and more demanding clients and voters, providers and governments have embraced the need for change towards more consumer directed care.

Getting to know the workforce

The aged care workforce is predominantly female, older and in good health workforce.

It has grown significantly since 2012, with more staff in residential facilities but fewer in Home Care and Home Support.

Increasingly part-time employed, in continuing contracts, with far fewer casuals than in 2012.

Despite being an ageing group, with many having worked in aged care for more than a decade, they are an overall satisfied, stable and loyal workforce.

Are there skill shortages?

“Unequivocally yes according to the sector’s employers, and well above the national average figures we have access to” says Prof. Mavromaras. “More so in residential provision – and slowly decreasing since 2012 – and fewer in home care, but stable since 2012”.

Personal care workers form about 75 per cent of the direct care workforce: they are largely low qualified but also in their big majority highly skilled for the job they do.

Looking at the cause of skill shortages in residential provision, Prof. Mavromaras found that the main causes remain the lack of sufficient specialist knowledge, unfavourable location, and slow recruitment problems – the need to pay too high wages is not a prevalent cause.

The same was seen in the home care sector, where wages are not a prevalent cause, but location and slow recruitment are.

”For both residential and home care, going through consumer directed care reforms, employers report a shared picture on wage pressures not being a very common cause of skill shortages, especially when compared with other causes”

Employers respond to skill shortages in many diverse ways. Prof Mavromaras found these to be primarily (i) the use of longer hours (asking existing staff to work longer hours is the main response by employers; (ii) training of all types (internal and external); and (iii) getting more flexible work through agency, outsourcing or short-term arrangements. “Of course, paying higher wages is used, but it is simply by a long shot not a very common way to address skill shortages in the sector.”

So, how is it that we find skill shortages have remained high and at the same time age pressures have emerged as the Productivity Commission warned in 2011? Prof. Mavromaras suggested that the sector has been adjusting in alternative ways.

There is some Complexity to Consider

“First, we must distinguished difference between nurse qualified staff and personal carers: both matter, but in different ways” argued Prof. Mavromaras. Nurses are critical for the operation of the sector, but their contribution to the total wage bill of the sector is a much smaller part from that of personal cares who dominate the wage bill by their sheer numbers.

The NACWCS data shows that the aged care workforce is largely and increasingly a part-time workforce on continuing contracts (residential from 72% in 2012, to 78% in 2016, and home care from 62% to 75%).

“When we ask them, nurse qualified staff say clearly that they do not want to work longer hours, while a large proportion of Part Time personal carers, wish to work longer hours (a net of 15% in residential and 11% in home care), which may part-explain where the longer hours are found without wage pressures.”

“Given that much of the sector’s wage bill is on care assistants, we can see how longer hours may address skill shortages in parts of the sector without causing wage pressures”

“At the same time, since the sector depends critically on the contribution of nursing qualified staff, we see how additional training and the availability of flexible labour may address in parts of the sector skill shortages without causing wage pressures”.

The “Punchline”

“Good wages and wage pressures are as important as skill shortages for the sustainability and the development of the sector. Our data suggests that when it comes to labour market imbalances there is no single picture that describes all problems and no single solution that addresses all of them.”

“The evidence we have offers an optimistic view of a sector that has been undergoing through major reforms and transformation in the quantity and the quality of its provision in a very competent, flexible, and effective manner. It also shows a workforce reporting a higher work satisfaction than the national average, with strong loyalty, dedication and sector retention.”

“Of course there are many problems that need addressing (indeed, one would be surprised if that were not the case in a period of major reform and transformation) and these should be addressed as change bed in.” says Prof Mavromaras.

“But our message is critical, in that large-data evidence suggests that the Productivity Commission’s warning about future wage pressures, which may have been both prudent and legitimate when it was made in 2011, had not materialised in 2016, and that the sector as a whole appears to be handling reform and transformation in a resilient and confident manner.”

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  1. What about the people that have gained a certificate 3 in Individual support and can not get work because they do not have enough experience or deemed too old to work in the sector.. Seems to me you need to look at all the factors as to why the sector is short staffed. I’m a mature aged worker and was looking to give back, I still have a number of years until I retire, I had excellent feed back from the residents I cared for saying I showed them more care and love than they had had in a long time. I have since found work elsewhere but I know of a few people from my small class still looking for work in the sector. So trained staff are there they just need a break.

  2. People who look after our most loved and vulnerable deserve better wages. It is a physically and emotionally hard job and often a thankless job but the best of people do it because they really do care. Some go into the field because it might be the only work they can get and I wonder if the facilities don’t keep wages low because they can get these types of people and of course it cuts their costs down. Further, assistance should be given to those who wish to further their education in this field.

  3. Aged Care workers are our most over worked and under paid workers in Australia today, I say this frequently. However, skill mix and under skilled staff is a huge problem in Aged Care at the moment.

    I believe the families of those in care should discuss with the facility what their expectation of Care giver/ Resident is and then told truthfully what it actually is, as well as the Registered Staff ratio to resident.

    Residential Care need credible care hour tools, regularly reviewed to decide how many Care staff are realistically required. Honesty is vital to even begin to sort out our Aged Care Crisis.


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