Understanding the true costs of managing a casual workforce in disability and aged care sectors

In the world of disability and aged care, we're all too familiar with the complexities of managing a casual workforce. It's not just a topic on the sidelines; it’s at the core of many organisations’ financial stability.

In the latest NDS State of the Disability Sector Report 2023, alarming figures surface – with 34% of providers reporting losses, the highest recorded since 2016, and an additional 18% barely breaking even, painting a concerning picture of financial instability within the industry.

The report also uncovered that 82% of providers faced service requests they couldn't fulfil due to pricing constraints and a scarcity of skilled workers, putting immense strain on service delivery.

At Hireup, we understand these challenges. As both an employer of over 10,000 casual workers and a key staffing partner for hundreds of providers nationwide, we're committed to untangling these complexities and working with the sector to deliver solutions. 

Challenges and costs associated with a casual workforce

Everyday we hear from disability and aged care providers cautiously managing their budgets, hesitant about relying on external staff because it’s perceived to be considerably more expensive and higher risk than employing your own people. Initially, it seems that focusing solely on the wages you pay your staff versus staffing agency rates tips the balance in favour of internal hiring.

However, if you consider the full cost of managing your own casual pool, coupled with the increased revenue and retention outcomes that come from having the right staff available to deliver services, the narrative takes a turn. 

The story expands beyond mere wage comparisons and agency fees, revealing a host of other expenses.

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Recruitment costs

Building a casual workforce begins with recruitment, a step that comes with its own price tag. From advertising job vacancies to conducting interviews and processing applications, this process can be time-consuming and costly. On average, the cost of hiring a new employee in Australia can range from $7,000 to $10,000 when considering advertising, recruitment agency fees, and staff time.

Screening expenses

In the disability and aged care sectors, screening is particularly (and necessarily) rigorous due to the vulnerability of the people we support. This includes police checks, working with children checks, and verification of qualifications, which can add up to $300 per candidate. Additionally, ensuring compliance with industry regulations often requires further investment.

Training and onboarding

Once hired, new staff must be trained to meet the specific needs of clients and to comply with sector standards. This includes both initial training and ongoing professional development. The cost of training a new employee can range from $1,000 to $5,000, depending on the complexity of the role and the level of specialised knowledge required.

Managing casual staff

Managing a casual workforce involves administrative costs, including rostering, payroll, and human resources support. Casual staff often receive a higher hourly rate to compensate for the lack of job security and benefits, which can be 25% more than full-time employees. This can lead to increased wage costs for employers. 

Managing a casual workforce is often marked by unpredictable staff numbers, limited control, high turnover rates and cost. In a recent study commissioned by Hireup, 53% of providers said they find it difficult to maintain consistent staffing levels due to the unpredictable availability of casual workers.

Overtime and burnout

Overtime is a common occurrence in the disability and aged care sectors due to unexpected staff shortages and the need to meet client care requirements. This not only increases overall wage bills but can also lead to staff burnout. Burnout can result in higher turnover rates, which are estimated to be between 15% and 45% annually in these sectors. The cost of staff turnover includes lost productivity, recruitment, and training of new employees.

These insights take on significant weight when considered alongside the recent NDS report, highlighting a concerning 34% turnover rate among providers.

The future of work with Hireup

At Hireup for Providers, we've devised a solution to these challenges by serving as an outsourced casual pool. Leveraging Hireup's technology, registered disability and aged care providers gain access to a pre-screened and trained workforce ready to step in when needed. This reduces overheads associated with recruitment, screening, and training. Furthermore, it fosters flexible staffing, reducing reliance on overtime and lessening staff burnout and turnover.

As an example, Sunnyhaven Disability Services achieved a 75% reduction in overtime since partnering with Hireup for Providers to fill vacant shifts across its accommodation service. With direct access to Hireup’s workforce and prompt support from the Hireup team, Sunnyhaven is consistently connecting with the right workers and ensuring continuity of support for their clients.

Despite the substantial costs involved in recruiting, screening, training, and managing a casual workforce in the disability and aged care sectors, transformative solutions like Hireup for Providers have the power to significantly diminish these overheads. By adopting this approach, not only can workers receive fair compensation and entitlements, but providers can also refocus on delivering exceptional care, unencumbered by financial and administrative burdens.

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