Skills for Care publish a report into the impact of the National Living Wage on care providers.

Tuesday, January 24, 2017

Skills for Care’s latest briefing uses intelligence from its NMDS-SC workforce model to focus on the impact of the National Living Wage on care providers.

The report provides an early insight into the introduction of the National Living Wage (NLW) - which came into effect on April 16 2017. It looks both retrospectively and forward how pay rates have been affected within the adult social care sector.

Care worker hourly rates are the main focus as well as differentials with other job roles in the sector. In March 2016 (prior to the introduction of the NLW), 39% of independent sector direct care workers were paid below £7.20 and 80% of organisations (with 50+ workers) had workers on less than £7.20. 

With the pay floor continuing to rise, a challenge for social care providers will be to maintain differentials between care workers and those in more senior roles and more experienced workers.  It is likely that the NLW will lead to a real term pay increase for care workers up to 2020, when the NLW is forecast to increase to £9 per hour.

While not directly benefitting from the NLW, there is evidence that social care organisations are rewarding workers aged under 25 with an increased rate of pay.  The briefing goes into detail, with a summary of key findings, direct care worker pay by sector, care worker pay by region, pay trends and differentials.

You can view the report:

The report highlights that while a large proportion of care workers in the independent sector have received increased pay rates to comply with the NLW, there are also several challenges for the adult social care sector going forwards, particularly in maintaining differentials with more senior roles and rewarding experienced workers and those with greater responsibilities.

It is likely that pay rates in adult social care will become proportionally closer to other sectors and occupations, which may increase the desirability of jobs in the sector, although it is worth noting that pay is not the only factor in attracting or keeping workers.

It is currently too early to assess the impact of the NLW on recruitment and retention in the adult social care sector, Skills for Care will explore this topic further in the future.

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