Ten steps to help care home operators cope with the National Living Wage (NLW) have been provided by support company Caresolve.
The advice follows analysis of the NLW’s impact on providers’ profits over the next five years.
Richard Shore, Caresolve’s finance director, (pictured) said: “Our analysis reveals the potentially devastating impact the NLW will have on care homes across the UK.
“The sector is already under immense pressures, but the NLW is probably the single biggest issue keeping both large and small care home operators awake at night. Many care homes are literally facing a fight for survival.
“Unless they take urgent steps, there is no question we will be hearing about hundreds, perhaps thousands of homes, closing due to the financial stresses caused by the NLW.”
The 10 steps are:
Understand and control your cost base.
Look at the dependency calculation for each resident based on specific nursing/care inputs, and prepare appropriate calculations for the cost of care for each.
Look at the profitability of your service provision.
Consider changing your service provision, eg is there an unmet demand in your area that could command higher fees/better occupancy rate?
Ensure key staff are aware of the true regulatory position of the business at any point in time.
Ensure that the business is underpinned by strong regulatory compliance.
Review all suppliers and supplier contracts.
Ensure recruitment and HR procedures are robust and the right people are in the right positions.
Ensure you retain good staff to avoid unnecessary cost and disruption.
Benchmark your business against your competitors.
The NLW rises to £7.50 per hour from April this year with a target of £9 per hour having been set by the government for April 2020.
Caresolve, which is based in Tattenhall, Cheshire, is run by directors Ben Challinor, James Parkin and Richard Shore who together have more than 50 years’ experience working in the care sector.