Five central questions for boards

Understanding the impact of the current labour market is important but more critical are the steps organisations take to address this risk, writes Joe Zabar.

Energy security, inflation, general cost of living pressures and geopolitical issues are attracting the attention of governments both here in Australia and overseas. While these issues are front and centre for the newly elected Albanese Labor government, so too is the ongoing issue of workforce shortages across Australian businesses and charities alike. Any thought of returning to pre-pandemic ways of working, retaining and recruiting employees have been dashed as competition for workers continues to increase.

People intensive sectors such as aged care and disability services are particularly exposed as both are currently suffering a shortfall of workers to meet existing service demand. An added layer of complexity is the current pay gap between some employees working in the aged care system and those working in disability services. As one peak body noted, there is a pull factor in play, drawing workers away from aged care seeking higher pay in other similar areas of work. Robbing Peter to pay Paul, is unsustainable especially given the projected increase in demand for services in both aged care and disability services as well as the broader care and support sector.

The intra-sector pull factor may well be addressed by the Fair Work Commission when it determines the aged care work value case later this year. However, this decision will not in and of itself address the broader issue of workers exiting the care and support sector now or the need for more workers as demand for services in this sector grows.

Decent pay and conditions for workers in the care and support sector is an essential part of any strategy to attract and retain workers in this critical sector. Securing a pipeline of future workers will necessarily require the sector receiving the right amount of funding to deliver vital services for some of the most vulnerable people in our communities.

As chief stewards of the care and support services systems, the Australian government will continue to play an important role in ensuring the ongoing delivery of services. That must by necessity include a focus on establishing a pipeline of workers to meet current and future demands. However, the government cannot be expected to do all of the heavy lifting. Employers in the care and support sector will need to apply their entrepreneurial skills and expertise to minimise staff turnover and maximise staff retention and attraction.

With organisations in the care and support sector regularly reporting staff turnover rates in excess of 35 per cent per year, the sector is entering into a new paradigm, one where the risk of not finding enough workers to sustain the business is real and ever present. Workforce matters can no longer be viewed merely as a management function; this issue belongs front and centre to the board as well.

In today’s operating environment boards should be asking themselves and their management the following five questions:

1. What are our staff turnover, retention and staff engagement/satisfaction rates?
2. How do these rates impact the quality of our services and reputation?
3. What do these rates mean for our business continuity and bottom line?
4. What innovations in workforce management are we working on to try and turn this around? and
5. How can we, the board, support this work?

Understanding the impact of the current labour market is important but more critical are the steps organisations take to address this risk. There is no simple, single solution to this problem. Indeed, the very nature of this sector comprising for-profit and not-for-profit providers, of varying size, service offerings and locations; requires a sophisticated multifaceted approach to understanding and addressing the workforce issues.

There will be some providers thriving in this current environment, able to navigate the impacts of the current workforce shortages. For those organisations barely surviving, the current workforce issues may simply be too much and lead them to reduce their service offerings or exit the sector all together.

Board members have a vital role to play in helping to address workforce retention and attraction issues for their organisations. Asking the right questions of their management is the first critical step in that process.

Failing to deal with the workforce challenges in the care and support sector will only make life harder for those people reliant upon it.