The five numbers that run a service

Amara I am a carer, not an accountant. Why do I need any of this?

Nadia Because it is the thing standing between excellent seniors and the manager grade, more than any clinical gap. You will be handed a budget, a variance report and an agency bill and asked to have opinions about them.

Amara Start with occupancy then. Everybody obsesses about it.

Nadia And there is a good reason. Nearly all of a service's costs are fixed. The building, the management, the core rota, insurance, compliance. Those barely change between thirty two residents and thirty eight.

Amara So the extra residents are almost pure surplus.

Nadia Almost entirely. And equally, each empty place below break even costs you close to the full fee. Which is why a service at eighty five per cent can be struggling while one at ninety four is comfortable, with no difference at all in how well either is run.

Amara That explains why head office cares about an empty room that I experience as an easier shift.

Nadia That is exactly the disconnect, and knowing the number closes it. Learn your break even occupancy. It is the most useful figure you can carry.

Amara Agency. Ours is enormous and I get shouted at about it.

Nadia Then let us do the arithmetic properly, because the headline number is misleading in both directions.

Amara Agency is twenty two pounds an hour, our carers are twelve sixty.

Nadia Which looks like a seventy five per cent premium and is not, because a permanent employee costs more than their hourly rate. Employer National Insurance, pension, holiday pay, sick pay, training time. Realistically twenty to thirty per cent on top.

Amara So the gap is smaller than it looks.

Nadia On the invoice, smaller. In reality, larger, because of what never appears on the invoice. Inducting somebody who will not come back. Errors from unfamiliarity. And continuity, which in dementia care is not a nicety, it is a clinical issue an inspector will notice.

Amara And the effect on my permanent staff.

Nadia Which is the one that compounds. They watch somebody earn substantially more for the same shift with none of the responsibility, and eventually some of them leave to join the agency. That is how agency dependence becomes self reinforcing.

Amara Variance reports. Adverse and favourable. I nod and understand nothing.

Nadia A variance is just budget minus actual. Adverse is worse than budget, favourable is better. And here is the thing nobody tells you: favourable is not automatically good.

Amara Why not? We spent less.

Nadia A favourable staffing variance usually means shifts ran short. That shows up three months later as incidents, complaints and turnover. Managers get congratulated for a favourable pay variance when what they actually did was run an unsafe rota.

Amara So what should I be asking?

Nadia Never whether it is adverse or favourable. Always what caused it, and whether it is one off or structural. Three months of adverse agency variance is not bad luck. It is a vacancy you have not filled.

Amara Last thing. How do I actually win the argument for another member of staff?

Nadia Not with we are exhausted. It is true, and it loses every time, because the person deciding is looking at a spreadsheet and has heard it from every service they oversee this month.

Amara So what wins?

Nadia Your case in their units. We have covered an average of sixty two agency hours a month for five months at twenty two pounds. That is one thousand three hundred and sixty four pounds a month. A permanent worker at twelve sixty with twenty five per cent on costs covering those hours is about nine hundred and seventy six.

Amara So it saves nearly four hundred a month.

Nadia About four thousand six hundred a year, before you count induction time and continuity. Same request, same facts, completely different reception. And it is one multiplication and one subtraction.