‘Applause is not enough!’ But just how do we properly reward our care workers? Part 1: The Why

The Covid-19 crisis has highlighted the critical role of care workers and made it obvious that this overwhelmingly female workforce deserve far better pay and conditions, with over 100,000 current job vacancies illustrating the chronic lack of attractiveness and recognition.

But how does a sector facing such a massive increase in demand and costs, with 400 bankruptcies already in the last five years, ever fund and deliver a significant pay increase?

Pay expert Duncan Brown in a two part blog considers some viable solutions. In this first part he looks at the overwhelming case to improve pay and conditions, but also the major financial constraints in the way of doing so in the sector. In Part 2 he will consider two potentially workable solutions.

As the UK’s latest grim mortality statistics highlight that the ‘death toll signals the extent of the care home crisis’, many of us will have nodded in agreement with The Observer’s headline last Sunday: ‘When it comes to care workers, don't just applaud, pay them’.

Secretary of State for social care, as well as the NHS, Matt Hancock reminded us that we are banging our dustbin lids every Thursday evening to acknowledge and thank our brave front-line care workers, in this Cinderella of a service, not just our equally amazing hospital staff. He announced earlier this month the award of a new badge to recognise them, a ‘unifying symbol of pride in our social care champions’.

Perhaps it will at least help those that have been turned away from some supermarkets for, as they saw it, impersonating keyworkers. But I doubt it is at the top of their wish-list right now. Or even higher pay. Right now that must be addressing the PPE shortages, which are reportedly leading some to resort to bin bags to protect themselves from the obvious dangers of infection in caring for residents.

The 7,316 deaths recorded in care homes in the week to April 17th (according to the ONS’s latest stats) represents a doubling every week since the start of March, is still growing and seems set to surpass those occurring in hospitals, The Chief Executive of the NHS Confederation, the umbrella body for employers, described the statistics as ‘deeply alarming’ and went on that ‘we need to do everything we can to support the care sector’.

A new coronavirus strategy for adult social care was belatedly published late last week, promising new systems to distribute protective equipment and wider access to testing for residents and staff, after outcries from homes. Providers are now mostly in private sector ownership delivering such a vital public service which has become so visible in this crisis, but are still funded in the main by local authorities.

It was too late though for Carol Jamabo, a 56 year old mum of two with an ‘uplifting, joyful and enthusing personality’, a keyworker for 25 years who had been working for Cherish Elderly Care in Bury and became the first care worker to die from catching the virus on April 1st. The ￡4,500 cost of her funeral was raised for her family in less than 24 hours on the Go Fund Me charity website.

Once this horrendous virus has peaked and hopefully left us, retired consultant Dr Kirsty Muirhead echoes the views of many of us in her letter in Financial Times last week on the need ‘to respect and value carers, not just by applauding them, but by supporting their training and by increasing their pay’.

Care Work and the Workforce

There are 223 NHS hospital trusts in the UK but some 18,500 care provider across 39,000 locations. According to Skills for Care approximately two million people work in care jobs, with 1.2m adult social care workers, 465,000 in care and nursing homes, 610,000 providing care at people's homes like my parents; and 150,000 provide day and community care. The workforce is overwhelmingly female and 50% more likely to be from a BAME background than other workers. For example, a study by Chwarae Teg shows there are nearly 20,000 care workers in Wales, some 80% are women and 50% over 40 years old. In London, 81% are women, their average age is 45, 24% are aged over 55 years, and 67% are classed as BAME.

How these jobs and the work they do has been classified by the government throughout the Brexit negotiations as ‘unskilled’ and so still excluded from entry under the latest immigration proposals published quietly by the government earlier this this month, frankly, defeats me. Care workers help my mum get up and dressed every morning. They give dad his bath and a shave. Their work requires kindness, tolerance, generosity, compassion and intelligence. It often involves specialised tasks, from coping with seizures to administering medicines. They often work long, arduous hours.

Throughout this crisis, they have been there, moving in at some care homes, sleeping in caravans in the grounds of others. With the rising death toll, they are helping people say goodbye to their loved ones. They fill their residents’ rooms with mementos and photographs. They hold their hands when there is no one else to do so – ‘their commitment to vulnerable people goes above and beyond’. It always has done, but now the country as a whole is belatedly realising it.

Reward and recognition? Poverty pay

And in return, how have we chosen to recognise and reward these essential, often remarkably committed keyworkers? Appallingly badly. Research published last weekend showed that most are paid the National Living Wage, with more than half earnings less than the ‘real’ living wage set by the Living Wage Foundation (￡9.30 per hour, or ￡10.75 in London).

The rising level of the minimum National Living Wage has helped, with the government sensibly still going ahead with the already announced significant 6.2% increase at the start of the month, despite the crisis, bringing it up to ￡8.72 per hour for over 21’s. But research for the Low Pay Commission shows tens of thousands of them miss out even on this legal entitlement and other benefits, such as holiday and sick pay, a key focus hopefully for the planned, more powerful single labour market enforcement body under Mathew Taylor.

Each year Skills for Care publishes a report on The state of the adult social care sector and workforce in England, in which the scale of the current poverty-pay situation and the recruitment and retention challenges this create are laid out. The introduction and escalation of the national living wage, has indeed stimulated noticeable improvement in starting pay over the past seven years: from an average of ￡6.78 an hour in September 2012 to ￡7.89 in March 2018.

However, this increase hides a much less cheerful picture in reality. As all other sectors have had to meet the national living wage commitment, this increase has not made pay for social care work any more attractive. For example, the average hourly pay for care workers is below the basic rate paid in most UK supermarkets. Staff are also lost to similar, better remunerated roles in the NHS.

In order to meet the NLW requirement for starting pay, hard-pressed social care providers have held down their overall pay bill in other ways. An increasing proportion of the workforce is now paid at or around that minimum level. The pay differential between care workers with less than 1 year of experience and those with more than 20 years has reduced to just ￡0.15 an hour. Many are also no longer paid for their travel time, which is obviously significant in London.

It’s not like we offer security in exchange for the low pay – care workers are four times more likely to be on a zero-hours contract than the rest of us, representing for example, 56% of care workers in Wales. My friend Professor Sian Moore found in her research for the Commission examples of home care workers being electronically tagged like warehouse workers and delivery couriers, so that they can be paid only for every 15 minute segment of work – if they turn up and their patient is out at the shops, they don’t get paid.

A social care worker, Bob, told them that his schedules are sent to his mobile phone at only a day’s notice because of staff turnover. Even more worryingly given the current situation, this University of Greenwich study found that ‘a number of directly employed (care) workers were unclear about holiday and sickness entitlement and there was some reluctance to take holidays, particularly sick leave, a perception that asking for or taking leave risked eliciting punitive action from employers’.

Councils and the NHS only pay providers for care actually delivered. They will not pay for care workers who are prevented from working, for example self-isolating. So what would you do if you were a care workers and started to get a sore throat? Follow the government’s dictat to stay at home for a week and self-isolate, or prioritise feeding your kids and go into work?

And my description of poverty-pay levels is no exaggeration I am afraid. As Norman Pickavance pointed out in People Management , ‘many of the keyworkers we are applauding as heroes hale from a growing band of working poor. The majority of the UK’s poor today and children in poverty are in working families’, driving the growth we have seen well before this pandemic in the use of foodbanks, pay day loans and debt advisory services.

The Institute for Fiscal Studies have been looking at the initial effects of the virus on employment and earnings. They found that women and young people in low skill jobs were already getting hit disproportionately hard, with the crisis shining a ‘spotlight on the problems of fragile employment practices, gig working, debt and the exorbitant cost of housing, childcare and public transport’.

The government says it aims to recruit 20,000 extra social care staff over the next three months to help cope with the pandemic, with over a quarter of staff in some homes having to self-isolate. Good luck. Staff shortages are nothing new here. The care sector has always struggled to recruit enough staff because of its justified reputation for low pay and lack of recognition. Skills for Care estimates that there are currently 122,000 FTE vacancies in England. Turnover rates even before the crisis averaged 31% for adult care staff.

Increase their pay! But how do we afford it?

So like me and Dr Muirhead, you probably feel the solution is obvious: pay them more!

But, as others have highlighted, the pandemic has been preceded by a vicious pincer movement in social care of growing demand from an ageing population and chronic underfunding. Since 2010, councils in England have had the money they receive from central government cut by nearly half, as part of the government’s austerity measures after the last economic crash in 2008/9. Some of that loss has been offset by increasing local taxes, but the amount they can spend on all the services they provide has been cut by almost 30% during that time. The government says councils’ access to additional dedicated funding for adult social care increased to ￡3.6bn in 2018 and ￡3.9bn in 2019/20. But it was over ￡5 billion in 2010.

Ian Hudspeth, chairman of the Local Government Association’s community wellbeing board, said last week: “Social care as a whole has been desperately underfunded for decades and we have been consistently calling for a cross-party consensus on the future of care and how we pay for it, long before the coronavirus crisis”. And the biggest portion of any care homes costs? Right, staff, typically representing over half of their total outlay.

There are concerns that significant numbers of care providers may not survive the crisis according to the UK Home Care Association, even at current levels of pay and without the additional pressures and costs of the virus. They are facing further demand for beds after NHS England’s recent decision to discharge long-term patients who are medically fit, as part of efforts to free up 15,000 hospital beds. Even before the pandemic, over 400 had gone out of business in the last five years in this ailing sector, with debt-fuelled business models having become a common feature in the sector post-privatisation.

Four Seasons Healthcare, a dementia care specialist provider with 322 homes, which employed 22,000 people and had 17,000 residents, collapsed into administration in 2018, following attempts to run it profitably by a succession of owners, including Guernsey-based private equity group Terra Firma and Qatar’s sovereign wealth fund. As part of its protracted wind up, 44 homes were transferred to rival operators in an agreement last month. Trade union the GMB’s National Officer, Rachel Harrison, labelled the transfer a “care catastrophe” that reflected the government’s “appalling lack of strategy” on social care.

But whatever the rationale for a significant pay increase for care workers, it seems unlikely that many care providers or councils could under current financial restrictions afford to fund it. Although chancellor Rishi Sunak unveiled a ￡350bn emergency economic package to support “small and large” businesses, which care providers can apply for, the government was forced to announced last Friday that councils across England will receive a further ￡1.6bn to deal with the immediate impacts of coronavirus, taking their total pandemic funding to more than ￡3.2bn. But even before the crisis, the Labour party claimed that social care would require an extra ￡8bn to stabilise the system.

Squaring the Value/Cost Circle

So can any significant improvement in pay and conditions, however justified and deserved, be funded and delivered by the UK’s cash-strapped, demand- and cost-pressured, staff-short local authorities and private providers, especially in any sort of practical time-frame which might help address the immediate crisis?

See Part 2 of this blog to follow for two potentially viable solutions.

Duncan Brown, PhD, MBA, FCIPD is an independent reward researcher, adviser and trustee with more than 30 years’ of experience. He is a principal associate at IES, visiting professor at University of Greenwich and co-author most recently of A Handbook of Reward Management (Kogan Page, 2019)