increasing care home workforce visibilityI am increasingly seeing interest from Care Homes for solutions which reduce and monitor work force expenditure. To provide the same or better service at a lower cost means having a more efficient and productive workforce, and absolutely the key to this is increased visibility and ability to easily breakdown the labour costs. Knowing exactly what tasks your labour budget is spent on leads to finding inefficiencies, creating opportunities to improve the allocation of budget in the future.

Financial Challenges Faced by the Care Home Industry

The Care Home industry is facing a number of financial challenges, including rising operating costs and cuts to local authority funding. Here are few points I have taken from an article by DLA Piper1 about the compounding challenges Care Homes face.

Reduced funding

Over the past five years, local authority funding has fallen by £4.6 billion, representing a 31% reduction in real terms. This is particularly significant in that 60% of residential care homes are local authority funded.

Skill Shortages

A shortage of qualified nurses has led to the need to rely on the use of more expensive agency staff, further eroding already tight operating margins.

Reduced Profitability

With greater than 50% of revenue coming from local authorities (and this source of funding shrinking), projections predict an average fall of 10% less fee income per bed leading to a fall of 28% less profit per bed.  These issues, combined with increased regulation in the sector, are driving an increase in monitoring costs and further investment to remedy areas of underperformance in service delivery. What can be done to reduce labour force costs and increase profitability without affecting customer service?

5 Steps to Achieving Better Labour Cost Visibility

Below are five steps to achieving better visibility of labour costs.

Step 1. Compliance

Determining what staffing is required for which facility, for which day and for what time of the day is crucial to making sure you are providing the right care as well as remaining compliant with Labour laws. While compliance can be met by over staffing, balancing compliance requirements with expected service demand and budgets can be a challenging task. I recommend using a rostering solution which indicates compliance and uses a ‘routine planner’ which can accurately match your client’s requirements against your employees capabilities.  For example,  you may have a requirement of a client who needs hydrotherapy and requires the use of a hoist – as they aren’t able to enter the hydrotherapy pool themselves. You will need to have software which will match this client’s requirement to an employee that has the skills and qualifications to run the hydrotherapy class, has the skills to work the hoist, has first aid certifications and is available to work on that day and time.

Step 2. Optimising Budget Allocation

Effective allocation of and adherence to budgets is critical but challenging, particularly for care homes with a widespread workforce across many facilities and disciplines. The key to effective labour budgeting is a solution that allows for the easy setup, input & management of budgeting data while providing visibility, control and analysis at the rostering and reporting levels.

Step 3. Optimising Rosters

Optimising your rosters requires a tool that leverages information such as your budget, employee availability, leave allocation, skills and qualifications, scheduling rules and alerts into a concise and flexible user interface. The end result is an optimised roster that meets service or production level requirements in a cost-effective manner, while ensuring business objectives and employee requirements are met.

Step 4.  Rostering staff across multiple Facilities

Care homes with multiple facilities will benefit from a rostering solution which is able to view the entire available talent pool across multiple care homes. This not only helps rostering for absences or shortages, it reduces costs by making sure available part time or casual staff are used instead of agency staff.

Step 5.  Workforce Analytics

Use Workforce Analytics to accurately report on your labour costs across a variety of dimensions and metrics. For instance, in a residential aged care home, you may want to know the average labour cost per bed, per hour, or the cost of supplying an hour’s worth of a therapy across therapy types.

Using a workforce management solution that is able to attribute costs to a service, customer, bed or ward will start to shed light on:

  • Which staff groups or services are costing the most per customer?
  • Which services are the most profitable?
  • What effect does agency staffing have on the cost of supplying a service?
  • How does the cost of staffing change over the week as compared to the need for staffing?
  • How does employee absences add to labour force costs per person?

The greater visibility of costs per resident, or ward, the greater the ability discover ways to reduce costs while maintaining customer service and budget across the financial year. If you would like to know more about RITEQ’s workforce management’s solutions, contact RITEQ on  020 3846 0600 or

Rachel Moffat,
General Manager

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