New Providers Are Driving Up Manager Pay – Laing & Buisson

A war for talent among the premium providers of elderly care is driving salaries to new heights, according to healthcare experts LaingBuisson. Findings in a consultancy report published by the healthcare researcher has shown that many new build care home facilities are paying base salaries in excess of £60,000 per annum to their managers. The LaingBuisson Care Home Pay Survey says that taken together with substantial bonus, pension payments and national insurance the total cost of a new manager is fast approaching £100,000 in the best quality environments.

The move toward these salaries among well-funded large groups of providers is fuelled in the most part by growing investment made in securing opportunities identified among the expanding self-funding customer market.

Launching the new report, LaingBuisson CEO William Laing said: ‘Providing top quality residential care comes at a cost. This begins with the cost of developing and maintaining properties suitable to deliver care for society’s more vulnerable citizens and continues with the cost of employing, and retaining, the best available staff to deliver that care. This new report is the first major survey – and analysis – into manager salaries and hourly pay rates that residential care providers across the older people and older with dementia market, are paying in order to secure that expertise.’

According to report co-author James Rumfitt, new entrants to the residential older persons care market are keen to empower their managers. He said: ‘Groups want manager who can run a business, not just someone to fill in a series of tick boxes, and they are willing to pay and reward accordingly. These decisions are being made by people who are new to the market and are not constrained by the past or by debt. The knock-on effect in the sector will be considerable.’

On the flip side, the report claims that as the more challenged care groups fail and/or consolidate, many managers are retiring or being forced out by command and control management whose cost structures have greater constraints. The report claims that investment, perhaps inevitably, remains poor among these challenged groups and the notion of a professional cadre of care home managers the sector so badly needs seems further away for them than ever.

Key conclusions in the new report are:

•    Care home manager salaries have increased ahead of average earnings in the UK for every year since the recession began
•    Care home manager salaries have also increased ahead of earnings of hourly paid care home staff – see the chart below
•    This when wages for staff have been static in real terms as they remain  anchored to the National Minimum Wage
•    Managers with nursing qualifications do not attract a premium compared to their unqualified colleagues – small data sets show that for the largest and most profitable homes that they are now more likely to be managed by a professional general manager than a nurse
•    New builds offer economies of scale on manager salaries
•    There is great variation between homes in the manager salaries they pay, and scale of home is only part of the explanation.