Brexit – a perfect storm for social care
Stephen Wilson, CEO and Co-Founder of recruitment platform Novacare, discusses how Brexit will add to an already critical situation within the social care sector – and why women should be better recognised for their role within the care industry. The Office for National Statistics reports female unemployment fell this year to 3.7% the lowest since records began in 1971. Unsurprising when women account for the vast majority of the 1.75 million people who work in Social Care across the UK. As a sector social care contributes £38.5 billion to the economy in England alone. A figure which continues to rise as the size of the population over 65 requiring support grows. Yet it is a sector with over 110,000 care vacancies, and a turnover of more than 390,000 (30.7%) per year. This crisis in recruiting impacts those waiting to be discharged from hospital and those at home awaiting a care package. So how will Brexit add to an already critical situation within social care? The Department of Health itself estimates that there could be 28,000 fewer workers in the social care sector in England five years after leaving the EU. It also warns that this could have a knock-on effect on women’s participation in the workforce as they move out of paid employment to take on informal care roles. The result of this would be hundreds of thousands of hours’ worth of lost earnings, mainly for women. Given over 104,000 EU nationals and 129,000 non-EU nationals work within the sector, we can’t be complaisant about the impact Brexit and a points-based immigration policy will have. With the UK government’s announcement on 19 August that European Union (EU) “free movement” rules will end immediately if there is a ‘No-Deal’ Brexit on 31 October 2019, new immigration restrictions become more likely. The immediate impact for employers would include: The risk to the social care sector is that visas may only apply to skilled workers with a salary in excess of £30,000. The average salary for a full-time social care worker in England is £9.10 per hour, less than £19,000 per annum. Currently, the most needed group of workers would fall outside of the proposed immigration salary threshold. All of these factors build up into the perfect storm for recruitment into the social care workforce. Conclusion Gender shouldn’t be a factor when it comes to employment, however social care remains predominately delivered by women. This traditionally low paid sector deserves better recognition and reward for the work its staff do. They improve the quality of peoples’ lives day in, day out. Early morning, late at night, 365 days a year in all weather, social care staff make sure the most vulnerable in society are safe. Isn’t it time we worked together to improve their lives?
Hiring temporary contractors – understanding tax rules IR35
Are you aware of the recent change in law regarding temporary contractors? Here the team at Lawspeed, the UK’s leading Law Consultancy dedicated to the recruitment industry, discuss the new tax rules… Some of you will have heard recently about new tax rules known as IR35 relating to the use of temporary contractors, and due to apply in April 2020. Under current proposals businesses with a turnover of less than £10m, a balance sheet of £5m or fewer than 50 employees (excluded businesses) need not be concerned, but the rules should be noted by all other businesses that hire contractors. IR35 is the name given to an Inland Revenue notice (Inland Revenue number 35) which explains obligations on contractors to pay tax in a different way whenever the contractor provides services through a third party, usually a personal service company (PSC). These obligations have existed since 2000. If the rules apply, the contractor has been required to pay employment taxes and NICs on the whole of the income it receives from a posting or assignment, with a top slice allowance of 5%. As this means that the individual receives a net amount far less than if normal company tax rules apply, most temporary contractors have worked hard to avoid application of the rules, and HMRC believes that there has been serial tax avoidance in this area. To address this, in 2017 HMRC changed the rules where a contractor is hired by a public authority, and it now plans to extend those changes to the private sector, so affecting all businesses except the smallest companies. So when do the rules apply? They do not apply to self-employed individuals who are not operating through a PSC (there is a misconception around this!). Because of a fear of employment rights claims and also the desire of the hired individual to maximise net returns, it has become common practice to engage locums and temporary support individuals via their own PSCs. It is these arrangements that the rules attack. What do the rules require? Where the working arrangements are such that, if there were no PSC, the individual would be regarded for tax purposes as employed, someone has to account for employed levels of tax and NICs on invoiced sums for work done/time spent. This also means that someone has to make a decision as to whether they apply. The ‘someone’ used to be the contractor, but is now switching to the hirer or other party who pays the contractor, for example an employment business that supplies the contractor to you. This party is known as the Fee Payer, who is now also to be responsible for payment of PAYE and NICs wherever the rules apply. The decision – ‘employed’ or not Assessing employment status is notoriously hard except in the most obvious of circumstances. There has been a plethora of cases over the last few decades which have always been about unclear arrangements, not the obvious ones. Much has been written about mutuality of obligation, direction, supervision, control and so on, and to address these intensely legal and argued over elements would mean this article would end up the size of a book! However in terms of key considerations, a business to business arrangement for a defined project as agreed at the outset is an excellent start. The tax and other ramifications Where the status decision is ‘employed’, you, as the hirer (or a third party, e.g. an agency if involved), are the Fee Payer and have to pay contractor invoices in a specific way. Because HMRC regards the arrangement as deemed employment, the invoice is treated as the salary of the individual. This means that the whole of the invoiced sum, excluding VAT, allowed expenses and cost of materials, must be treated as employment income subject to normal PAYE and NIC deductions. The company invoice must be paid net of PAYE and NICs and the Fee Payer must account to HMRC for the PAYE and employee and employer NICs on the invoiced sum. The result – a cost hike for you of some 13.8%, increased payroll admin for what was previously a simple supplier payment, and a lower net income for the contractor. It’s not surprising therefore that some trade associations are warning that there may be a drop in available locums and contractors. What can you do regarding temporary contractors? First, recognise that individuals who put themselves out to work temporarily will still be around. Whilst some may start to look for regular employment, finding it may be easier said than done! Also not everyone is determined to minimise tax payments as before. Some may be happy to work through agencies on their payroll or sign up to temporary employment contracts with you. If the engagement is for a period of time rather than specific tasks, and the contractor still wishes to operate through a PSC you can either accept the cost of employer NICs or negotiate a new rate. The contractor could work for you as self-employed without any PSC involvement, and you could keep the same rate of pay; however in this case you run the risk that HMRC (as above), or indeed the contractor, could argue that the arrangement is actually one of employment. Normal Employment Tribunal limitations apply to claims by the contractor. For those you assess as not ‘deemed’ employees it is critical that the contract you use is properly formulated and that the specified work to be undertaken is fully and properly described. The actual working arrangements throughout the assignment should be in line with the contract, so discuss with line managers to ensure there is no conflict. You should also keep a note of how and why you concluded there is no deemed employment in case HMRC investigates as the risk of an investigation exists for up to 6 years after the event. Conclusion This is a proposed invasive new method of taxing contractors that will affect hirers and those in a worker supply chain.
Gen Z: The answer to care industry staff shortages?
A study conducted last year revealed that the level of vacant roles and turnover rates within the care industry are the highest they’ve ever been. One of the main factors for this is the ageing population – more people are reaching ages 85+ and are suffering from more complex health issues. The higher levels of dependability means the need for social care services is intensifying and there isn’t a large enough workforce to meet this demand. View the study here. The population of people aged over 65 is forecast to increase by 40% by 2035 and as a result, an additional 650,000 jobs will be required to meet this demand. Almost a quarter (24%) of the current workforce are aged over 55 – meaning that they are likely to retire within the next 10 years – a harsh reality that is putting more pressure on staff shortages. So why not target and utilise a younger generation? Enter Generation Z – a generation renowned for their dedication to hard work, loyalty and desire for independency and job stability. As it stands, there are currently over 110,000 vacant roles within the care industry, alongside an estimated turnover rate of 30.7%. The high level of staff shortage is putting the sector in crisis and adding increased pressure on an already overstretched industry. People are entering care at a younger age more recently – whether this be to retirement villages, assisted living or aged care facilities – and employment levels are failing to meet the necessary requirements. So, what can employers be doing to attract and retain staff within the care industry? Gen Zs’ unique traits should encourage employers within the care industry to adapt and explore new avenues to fill worker shortages. In this article, Blueleaf discusses the challenges and potential solutions faced by the industry, what can be done to meet the demands of the staff shortage crisis and how to attract Gen Z to a career within care. Understand recognition is the key to retention It is clear that employers are struggling to find, recruit and retain suitable people to the sector and within specific roles. Recognition is the key to retaining staff – by recognising and rewarding hard work, your workers will feel valued. Feeling valued, recognised and respected is within some of the top reasons for employers staying at their current place of work, so is definitely an aspect to take advantage of. Unlike millennials, who enjoy working collaboratively as a team and sharing successes, Gen Zs prefer to be judged on their own achievements and have their individual talents recognised and showcased. Ditch zero-hour contracts and agencies A quarter of the workforce (25%) were on a zero-hours contract (335,000 jobs), and as Gen Zs crave job security, this is not an appealing aspect to them. Not only do zero-hour contracts encourage a low sense of commitment and collaboration amongst workers, they also offer a huge income risk and uncertainty of what a worker will earn month to month. Due to such a high level of staff shortages, many care establishments are turning to agencies for temporary staff. This is an expensive and tedious process and one that can be avoided with sensible hiring decisions. According to Thomas International, the average cost of recruiting a new employee is circa £30,000, so is a large cost in an industry with such high turnover rates. Recruiting and retaining competent staff will not only reduce costs, but will boost productivity. If people within the care industry work hard at repositioning it as a rewarding and viable career options amongst Gen Z, the need for zero-hour contracts and agency staff will slowly deteriorate; which will reduce costs and boost productivity. Provide relevant training for the care industry In addition to offering permanent and stable working hours, Gen Zs are also looking for an employer who can provide structured career progression. This generation has grown up in a world where everything is customisable; through the click of a button, they can identify their personal preferences and mould their experiences to suit these and this is an attribute they are looking to adopt within their career. As well as feeling recognised and valued, career growth, learning and development is an important factor amongst talented employees – so promoting this within a care career amongst Gen Zs is advantageous. Gen Zs are less money-driven than millenials and are looking for more than just a salary, making them the ideal candidates for a role within care. They are seeking meaningful jobs which will offer opportunities for advancement alongside the opportunity to learn new skills. Consider the benefits of utilising software solutions This generation is more tech-savvy than their millennial predecessors, so take advantage of this to enhance productivity. Older generations are reluctant to change and don’t want to switch to electronic systems; administrative work hinders employees’ ability to focus their attention on residents, but certain software solution systems have the ability to strip out old paper-based processes. Adopting and implementing cloud-based solutions and other forms of technology to enhance productivity, encourage employee well-being and increase productivity is definitely something to consider. Care management software solutions can help to reduce the pressure on employees by assisting with budgeting, day-to-day care planning, new client assessments, electronic care planning and record keeping. Additionally, adopting an online HR management system will provide your employees with access to essential information they need, as well as the ability to request and amend records – a valuable perk that makes a huge difference to productivity. Whether it’s requesting annual leave, swapping shifts with colleagues or recording absences, online systems will allow for enhanced efficiency. Gen Zs desire the flexibility to structure work around their lives and have the ability to take time off for a family emergency without having to go through a tedious process. The staff shortages aren’t just related to direct care roles, which make up 76% of jobs within adult social care, there are many vacancies within
How social care providers can retain staff for longer
Although recruitment within the social care industry is important in order to attract the right people into your organisation, retaining good current members of staff is equally important in order to run an effective care home business. Statistics by Skills for Care estimate that every year 390,000 people leave their job in social care, which equates to 1,000 per day, leaving approximately 110,000 vacancies at any one time. Recruiting and retaining a skilled workforce, who have compatible values, can help care home organisations deliver a high quality and consistent level of care and support. Cohesion, a specialist social care recruitment company, recently surveyed care organisations on recruitment and retention. The research revealed that over half (55%) of respondents found retaining staff to be a bigger challenge than recruiting. Here Will Shepherd, CEO at Cohesion, shares his advice on how to promote better staff retention: 1. Provide role clarity – Candidates want to know the detail and if you fail to tell them up front, things can go wrong down the line. Include daily duties of the role, information about the service and team and the benefits of how to apply. It is important to highlight how the employee can make a positive difference in the advert and throughout the recruitment process – because research tells us this is the most important reason candidates will choose to apply. 2. Induction and training – When a new recruit starts working for a care home, the onboarding process is a crucial step in making them want to stay with an organisation long-term. Delivering a good induction scheme with associated training, has proven to be better than spreading training out over the first few months. Our research found that 72% of candidates surveyed at 12 weeks into their new role said that ‘opportunities to develop in and beyond their current role’ was important to them. Our research also found that 96% of all new starters who had been made to feel welcome by their manager described themselves as either ‘happy’ or ‘very happy’ in their role. It’s important to focus on other areas apart from CQC compliance training. Make it exciting by selling your business, the team and the organisation’s culture. When a new member of staff starts, shadowing and supernumerary shifts alongside existing members of staff, can have a huge impact on their confidence and enjoyment of the role. 3. Use social media – Social media is often used to attract people into a role during recruitment, but it is now having a huge impact as an engagement tool for the retention process. However, our survey revealed that 65% of social care organisations did not use social media as part of their employee retention strategy. Utilise personnel success stories across your social media channels, encouraging people to join the organisation’s community. Social media can also be used to encourage new starter recommendations – motivate, and if possible, reward staff for making candidate introductions and referrals. Consistency is key and maintaining a social media presence can ultimately make a huge impact. 4. Work-life balance in social care – Our survey revealed that 40% of people who said they were ‘very unhappy’ combined with the 32% who were ‘unhappy’, did not feel that the hours and shifts were suitable for their work-life balance or travel arrangements. The more flexible the working environment, the wider the audience of potential applicants. We are aware that this can sometimes be hard to apply within a care home, but any flexibility that you can offer in terms of shift patterns and rotas is appreciated by staff. The rewards make it worth it! 5. Listening and acting on employee feedback – By the time a member of staff is taking part in an exit interview, it is really too late to identify and solve any problems they may have faced during their period of employment. A ‘stay interview’, which takes place while an employee is still employed, provides a great opportunity to build a trusting relationship and is a chance to assess the degree of employee satisfaction and engagement. While you may not need to hold stay interviews with all employees, it’s especially important to hold them with key members of staff who might be considering a career change. Be sure to listen to your employee, take notes and action their suggestions, if they don’t feel like anything is going to change, you won’t get honest feedback. Cohesion employs some 50 recruitment experts from its headquarters in Solihull. For more information visit cohesionrecruitment.com or call 0121 713 6956. Sources: skillsforcare.org.uk/Recruitment-retention Cohesion data (2019)
