The term care agency is often used to describe multiple types of care services, which can lead to some confusion. Here are the different types of care agency;
A recruitment care agency is a recruitment business that operates within Health and Social Care. They do not manage peoples care packages, and work to support the NHS, Local Authority, and Private Care Providers with temporary and permanent recruitment solutions. There is no requirement for recruitment care agencies to be CQC registered.
A domiciliary care agency is a care provider that cares for people in their own homes. Domiciliary care agencies must be CQC Registered, and are responsible for managing the whole care package of the people they support.
A Live-in care agency also provides care to people in their own homes. The care worker will live with the person they care for usually for a period of 1 to 3 weeks before being replaced by another care worker. A live-in care agency also must be CQC registered.
In this article we are going to focus on recruitment care agencies. If you would like to know the answer to these questions for domiciliary care agencies or live-in care agencies, then just click their link.
The short answer here is no, the long answer with pros and cons is a whole other article. However, I have given a brief overview of the different types of employment with recruitment care agencies below.
PAYE – Employed Directly with the care agency. The care agency will manage all of your tax and national insurance contributions.
Limited Company – You are self-employed. You are responsible for paying all tax and national insurance contributions and completing tax self-assessments. This may require the assistance of an accountant.
Umbrella Company – You are employed by a third party. They manage your tax and national insurance contributions. The care agency will provide you with work as a representative, but you are not their employee. The umbrella company will charge you an administration fee for a payslip.
For the sake of this article, I am going to focus on recruitment care agencies that employ directly through PAYE. There are a wide range of costs that come with recruitment care agencies. I have broken some of these down below.
Pay rates will of course vary across every care agency. Some care agencies will pay the Government set National Living Wage(NLW). The table below shows the current NLW and the new rate effective from April 2022.
Other care agencies will pay the Real Living Wage (RLW), which is created by an independent organisation called the Living Wage Foundation.
The table below shows how the independent RLW compares to the government set NLW.
Of course, pay rates can vary a great deal. There are some agencies, like Ocala Healthcare, that pay more than the Real Living Wage as part of their values is to be better at valuing care workers.
As PAYE employees’ workers are entitled to 5.6 weeks paid holiday per year. The amount of holiday pay that workers receive is dependant on the amount of hours and pay they receive during a relevant period.
Therefore, recruitment care agencies must allow for holiday pay in their charge rate. This is often calculated as a percentage.
Tax and National Insurance
Employers of PAYE staff also incur employer tax/national insurance contributions. This currently is 13.8% of the staff members gross pay.
PAYE workers are also entitled to a pension fund. There are of course a wide range of options in this are, but the statutory minimum for an employer to pay in is 3%. Below is a table of the breakdown of an employees pension contributions.
Recruitment care agency costs vary because the costs above that agencies need to account for can vary. Some agencies pay more than others, some pay more also for nights and weekends. Some agencies pay more than statutory holiday pay, and others pay more than the minimum pension contribution.
However the above costs are not the only factors that determine what an agency charges. They also have to pay for their office, office teams time, computers and printer, electricity, water, marketing, office supplies, recruitment advertising, training of care team, and make a profit to be a sustainable business. This list is not exhaustive!
These costings are usually bundled up into the agency’s “margin”. Whereas the other costs in the sections above are cost of sale.
The margin that the agency charge will depend on how they operate as a business. For example, E-learning training is cheaper, but it is also widely considered to produce poorer trained care staff, than those that are trained face to face by an experienced health and social care trainer.
So, what do care agencies charge per hour?
Well as you can see there are many deciding factors. How much do care workers get paid? Does the agency invest in quality training? Does the agency go the extra mile to value care workers?
My advice to you would be to drill down on how the agency operates in terms of pay, training, experience, and valuing their people when discussing price with a prospective recruitment care agency.
By exploring what you can expect from each agency, you can make an informed decision on whether that extra £1 is going to save you the headaches that come with unreliable and inexperienced care.
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