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In Practice

The Australian Aged Care Workforce Is in Crisis

Aged care is one of Australia’s largest service industries and demand for such care is projected to grow markedly in the coming years. But the sector is struggling to recruit and retain its workforce, which, while working on the front lines of the COVID-19 response, is undertrained, understaffed and undercompensated. Unabated, these workforce challenges are likely to hinder not only quality of care, but also broader societal equity in the realms of gender, age, and race.

“As a group, providers have not sufficiently valued nor invested in the aged care workforce,” according to the Royal Commission into Aged Care Quality and Safety. It’s time for aged care providers in Australia to reform their employee value proposition. 

The way forward will involve listening to employees’ perspectives and reshaping their workplace experience. Some measures will be feasible for aged care providers to implement, while others can be undertaken in collaboration with policymakers or insurers.

A Workforce Under Strain

Australian aged care workers face serious health and safety risks on the job, which worsened during the pandemic. In residential facilities, the number of staff COVID-19 cases (2,750) was not far behind the number of resident cases (2,920) at the end of October 2021. Workers have also had to contend with the immense psychological pressure of caring for a vulnerable population during this unprecedented time, prompting researchers to call for “psychological PPE.

The aged care sector has relied for too long on the goodwill of an underpaid and insecure workforce of women.

Pandemic-related risks have exacerbated challenges that aged care staff typically face in their day-to-day work. For instance, some staff are under-equipped to provide high-quality care to patients. Despite workers’ best intentions, they do not always possess adequate skills in areas ranging from general nutrition and medication management to more specialized geriatric, dementia and palliative care. Given a high proportion of immigrant staff in the sector, some workers may sometimes struggle to provide culturally responsive care that meets the social and emotional needs of patients from different backgrounds.

The Domino Effect From Understaffing

Understaffing compounds the challenge. A 2019 study estimated that 57% of aged care residents in Australia live in understaffed facilities. Short-staffing places greater demands on existing workers, who report being stretched for time and missing their breaks, while still being unable to complete their tasks for the day. As aged care workers struggle with insufficient time or resources to provide desired levels of care, the risks of demoralization, burnout and attrition worsen over time. This pattern makes it increasingly difficult for the sector to attract new workers.

One factor driving understaffing is undercompensation. Pay for a beginning full-time aged care worker is only slightly above Australia’s minimum wage, and the sector offers limited benefits and opportunities for career progression. A similarly skilled worker can earn 25 to 30% more if they leave aged care and join other sectors, such as disability care. It’s no surprise, then, that desire for better pay is a top driver of attrition.

Implications for Social Equity

The pandemic has introduced new health and safety risks for aged care staff, while illuminating long-standing issues of undertraining, understaffing and undercompensation. These dynamics have implications for broader societal progress on equity, as the Australian aged care workforce is:

  • Overwhelmingly female. Women comprise 87% of direct care workers in residential care. This number increases to 89% in home care.
  • Relatively older than workers in the overall economy. The median age of all workers in Australia is 39 years; this figure rises to 46 years in residential care and 52 years in home care. 
  • Increasingly comprised of immigrants. Thirty-seven percent of Australia’s aged and disability care staff in 2016 were born overseas, up from 33% in 2011. In both years, this figure surpassed the overall share of immigrant workers in the economy.

Australia’s Health Services Union notes that the aged care sector has “relied for too long on the goodwill of an underpaid and insecure workforce of women.” Within this labor pool, immigrant workers tend to be particularly vulnerable, as they are increasingly brought to Australia on temporary visas, lacking the same rights and protections as the permanent migrants who previously characterized these labor flows. Immigrant workers also face increased risk of discrimination in the workplace. By investing in the aged care workforce, Australian providers can thus contribute to broader societal progress on gender, age and racial equity. 

Improving the Workforce Proposition

The aged care sector around the world faces workforce challenges, and it has an opportunity now to build back better and improve the employee value proposition. Our research shows a host of benefits to doing so — in addition to promoting societal equity — from mitigating workforce-related risks to improving quality of care and reputation. These are substantial benefits, with Australia projected to need 170,000 more aged care workers by 2030 and one in three aged care patients currently experiencing substandard care.

A first step for providers can be understanding the workplace experiences of their own staff. Learning about and acknowledging areas for improvement is important, even if it is currently challenging to implement solutions. Providers can explore official channels for employee engagement, such as regular listening sessions and collective negotiation. Where possible, taking action based on this feedback could help providers retain staff.

Other means of improving the employee experience may require stakeholder collaboration over time. Providers can work with policymakers, for example, to formalize immigration channels and career pathways for overseas-born employees. Meanwhile, providers can partner with insurers to provide occupational support through employee assistance programs, physical wellness initiatives and insurance coverage for both physical and mental health.

Though acting on workforce challenges will not be easy, now is an opportune time to start. According to a recent cross-industry Mercer Marsh Benefits survey, risk and HR professionals in the Pacific see “talent attraction, retention and engagement” as the second-greatest people risk for their business. This is second only to cybersecurity. Thus in the competition for talent, aged care providers that reform their employee value proposition will differentiate themselves — from not only other providers, but also employers in other sectors.

As Australia ages, workforce issues constitute the “human challenge at the center of aged care.” With the demand for aged care set to keep growing, caring for aged care workers is essential to the viability of the sector.

Kavitha Hariharan

Director of Healthy Societies at Marsh McLennan Advantage

Lyle Steffensen

National Practice Leader, Care Solutions at Marsh

Lyle Steffensen is an experienced insurance consultant, broker and adviser in the not-for-profit, corporate and government sectors in Australia.

Angela Ferguson

Research Analyst at Marsh McLennan Advantage Insights

Angela is a Singapore-based research analyst at Marsh McLennan Advantage, Insights, where she focuses on how industries, governments, and societies can achieve climate resilience. Outside of work, Angela is a facilitator with civil society group Climate Conversations.

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