RECOGNISING THE DUAL RESPONSIBILITY 

Care as a Core Ethos

At the core of every care home lies a commitment to prioritise residents' well-being, safety, and dignity. Families entrust their loved ones to care providers with the expectation of compassionate and comprehensive support. However, achieving these standards often requires substantial investment in staff training, activities, and facilities. Any lapses in care can lead to reputational harm or regulatory scrutiny, such as from the Care Quality Commission (CQC).

For care homes, the challenge isn't just about meeting expectations: it's about consistently exceeding them while ensuring residents feel valued and respected.

The Profit Imperative

On the flip side, running a care home is a business with significant financial pressures. Rising energy costs, wages, food prices, and the expense of regulatory compliance create a delicate balancing act. Despite these challenges, care homes must maintain competitive pricing to attract residents, often in a market with tight margins.

Bridging the Gap Between Care and Profitability

Consider the example of a care home owner whose ethos centred on delivering outstanding pastoral care. The home implemented initiatives such as movie nights, personalised one-to-one sessions, and an innovative communication program enabling residents to connect online with loved ones. While these initiatives enriched residents' lives, they also put a strain on the home's finances.

Faced with rising energy costs, the owner decided to conduct a sustainability audit. The audit revealed inefficiencies in their energy use, including outdated appliances and peak-hour consumption habits. Over 18 months, they implemented solutions such as installing energy-efficient lighting and equipment, adjusting operations to avoid peak energy rates, and training staff on conservation practices.

The results were transformative: utility costs dropped significantly, freeing up funds to sustain the care programs that set the home apart. By embracing sound financial practices, this owner demonstrated that profitability and a resident-first ethos could coexist.

WORKFORCE MANAGEMENT: THE BACKBONE OF CARE AND PROFITABILITY

Investing in Recruitment and Retention

In the care industry, the workforce is not just an operational asset, it’s the heart and soul of the service. Residents and their families value continuity of care, which depends on stable, motivated staff. However, high turnover rates in care homes remain a persistent challenge, disrupting operations and escalating recruitment costs.

Let’s explore a real-world example:  A family-run care home struggled to retain staff due to a lack of development opportunities. Recognising the issue, the owner introduced a training program, covering certifications in elderly care, dementia support, and leadership. In addition, they implemented mentorship schemes, pairing new hires with experienced staff. 

These changes created a pathway for professional growth while fostering a supportive workplace culture. Within a year, staff turnover dropped significantly, and employee satisfaction scores soared. The saved recruitment costs allowed the care home to reinvest in quality improvement initiatives, strengthening both their care provision and profitability.

Efficient Roster Management

Scheduling is a delicate balance in care homes. Overstaffing inflates costs, while understaffing risks burnout and diminished care quality. Leveraging technology can help solve this issue.

A mid-sized care home faced frequent scheduling conflicts and inefficiencies. They adopted an automated workforce management system that analysed historical data to predict peak demand periods, such as mornings and meal times. The software enabled managers to adjust shift patterns accordingly, ensuring optimal coverage without additional hires. 

Over 12 months, the care home reduced overtime expenses while maintaining care quality. The freed-up resources were directed toward enhancing recreational activities for residents, striking a balance between operational efficiency and enriching care.

Rewarding Longevity and Performance

Incentives and recognition are powerful tools for fostering loyalty and reducing turnover. Employees who feel valued are more likely to remain engaged and committed to their roles.

A care home tackled high turnover by introducing tenure-based rewards. Staff reaching their third year received a small salary bonus, and those celebrating their fifth year were gifted extra holiday time and a public acknowledgment during a team event. The initiative not only boosted retention rates but also cultivated a stronger sense of community among staff, positively impacting both morale and care quality.

Balancing Costs Without Compromising Morale

Pay is one of the most significant factors in recruitment and retention. While competitive wages are critical, non-monetary incentives also play a crucial role in employee satisfaction.

A new care home decided to focus on staff well-being during a particularly challenging financial year. Unable to match rising market wages, they introduced flexible shift patterns, mental health support programs, and free meals for staff during long shifts. These changes helped retain their workforce while maintaining morale, reducing the need for costly agency workers.

MANAGING COSTS WITHOUT COMPROMISING QUALITY

Regular Expense Audits: Finding Hidden Savings

Operating a care home involves significant costs, from utilities and food supplies to staff wages. Yet, inefficiencies often creep into spending patterns, gradually eating into profits. Conducting regular expense audits can help uncover hidden savings.

Take, for instance, a care home group that undertook a detailed review of its supplier contracts. They discovered they were overpaying for basic medical supplies compared to other providers. By renegotiating contracts and consolidating orders for bulk discounts, they saved thousands of pounds annually. The savings were reinvested into upgrading residents’ dining experiences, such as adding more dietary options and improving meal presentation, elevating both resident satisfaction and the home’s reputation.

Embracing Technology for Efficiency

Adopting modern technology can streamline processes, reduce waste, and improve overall efficiency, without compromising care quality.

A progressive care home that implemented a electronic care planning software, found that this move reduced time spent on paperwork, enabling staff to dedicate more hours to resident interaction. In financial terms, the reduction in administrative hours was equivalent to saving the cost of a full-time staff member. These funds were redirected to enhance staff training programs, ensuring better care outcomes while also maintaining a motivated workforce.

Energy Efficiency: 

Rising utility costs are a major challenge for care homes. However, adopting sustainability practices can lead to significant savings.

LEVERAGING EXPERT SUPPORT

The Value of Specialist Accountants

Specialist accountants can identify opportunities for efficiency and growth that may not be immediately obvious.

Consider a care home that faces persistent cash flow issues. A specialist accountant can help implement a cash flow forecasting system, enabling the home to better manage incoming and outgoing payments. By smoothing out seasonal fluctuations, the home can avoid short-term borrowing and save thousands annually in interest fees.

Streamlining Operations

An accountant with care sector expertise can also optimise payroll systems, identify tax efficiencies, and manage compliance costs. For example, a care home can reduce payroll errors by switching to a cloud-based system recommended by their accountant. This not only saves time but also improves staff satisfaction by ensuring accurate and timely payments.

Building a Partnership for Success

Beyond financial expertise, specialist accountants act as strategic partners. They understand the unique challenges of balancing care and profitability, providing tailored advice to help care homes thrive.

BALANCING CARE AND PROFITABILITY

Ultimately, the message is clear: it’s possible to run a profitable care home without compromising the values of compassion and community. Partnering with specialist accountants who understand the care sector can be a game-changer. With the right strategies and support, care home owners can achieve this balance, ensuring their residents thrive while their businesses flourish.

(c) Warren Davies, November 2024

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