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As providers struggle to recruit workers, Vicky Haines, managing director of Kingsway Care, explains how a move away from default zero-hours contracts has helped the sector.
High vacancies and staff turnover have been longstanding challenges in social care, but that does not mean that providers have to accept workforce uncertainty as inevitable, especially in their use of zero-hours contracts.
There are around 79,000 unfulfilled vacancies across the social care sector, and workforce turnover is around 24%. For home care businesses, this creates real challenges in recruitment and retention; the people using these services need consistency and quality from the care staff they rely on every day.
The needs of home care clients can change overnight. People may pass away or move into residential care as their needs become greater, often with very little notice. In response to this uncertainty, providers have tried to build flexibility into staffing, with around half of home care workers employed on zero-hours contracts.
It’s understandable to protect the business against fluctuating demand, but it risks creating a different kind of instability for the workforce. Carers who are unsure of their hours, or who don’t feel valued, are less able to give clients and their families the reassurance and practical support they deserve; looking after carers’ wellbeing is part of looking after the business.
Security as the starting point
Two years ago, we decided to test a different approach by moving away from zero-hour contracts as our standard employment model. Everyone was offered a permanent contract as a starting point, keeping zero-hours contracts on the table for those who preferred that option. The aim was to make security the default and build flexibility into that model, rather than remove it.
Initially, around 65% of our team chose to move to a permanent contract. Two years later, that has increased to 80%, and the remaining 20% have chosen a zero-hours contract because it genuinely works better for their individual circumstances.
Fixed-hour contracts create fixed costs, so of course this came with financial risk. Social care operates on extremely tight margins of around 4% to 9%, and permanent staffing hours can seem daunting when demand changes. However, they also made our costs more predictable, which improved our ability to financially plan and forecast.
We faced a drastic shift in demand not long after we introduced the new contracts. Several clients unexpectedly faced changes in their circumstances, and we lost around a quarter of our care hours overnight.
Avoiding redundancies when care hours are cut
I needed to work out how to weather this 25% reduction in care hours without losing the brilliant people we had worked so hard to retain. My first step was to have an honest conversation with every member of the team, explaining exactly what was happening.
We could have responded by making a small number of redundancies and sharing the remaining care hours out amongst the team, but after talking to everyone, we adjusted hours to share the impact across the wider workforce.
It was an extremely difficult period both for the business and for me personally as the business’ leader, but I am very proud that we managed to retain the entire team.
It was at this time that I was completing the Help to Grow: Management Course. The timing was particularly useful because I was learning about organisational change while dealing with a very real example of it in my own business. Having a peer group of other business leaders to discuss the situation with also helped me and made a genuine difference to how I approached it.
We got through that difficult period, and I learned a lot. The course also gave me the space to step back from day-to-day operations and think more strategically about the kind of organisation we wanted to be when we reached the other side. What I realised was that I didn’t want to design my business around external factors that we cannot control.
If we accept that instability is an unavoidable part of the domiciliary care business model, we will inadvertently prevent it from improving. We end up designing our businesses around the situation rather than taking steps to improve it.
Insecurity is costly
Although permanent contracts can create greater fixed costs, insecurity is costly. Recruitment takes time and money, and high turnover affects continuity of care too. When experienced staff leave, knowledge and client relationships are lost. It’s harder to see this cost on a spreadsheet, but it’s there, and it’s sharpened when staff feel their contribution is disposable.
The move towards permanent contracts has been part of a wider investment in our workforce. We’ve also focused on pay, paid travel time, training and development, and clear communication with employees. Our retention rate is now around 83%. Our turnover and operating profit have also grown as we continue to invest in our people.
There are many factors involved in the performance of a care business, and permanent contracts alone won’t fix a retention crisis. Still, our experience shows that providing security for employees doesn’t have to come at the expense of the business’s financial health.
A better workforce model for social care
With the current debate around profit and profiteering in social care, it’s important to distinguish between excessive profit and building a sustainable business to continue providing a high-quality service. Home care operates in a very different environment to some other areas of the social care market, with modest margins and significant staffing and operating costs.
For me, the more meaningful measure is not profit, but whether we are offering secure, fair employment that contributes to better continuity and quality of care for clients. Accepting that some level of uncertainty will always exist does not mean we have to pass that on to the workforce. On the contrary, giving carers greater security can create a stronger workforce, better retention, and a more resilient organisation.
Care is built on relationships, and those relationships will be strongest when the people delivering it are well looked after, too.
