The hidden cost of low pay in the social care sector

Adult social care workers play a critical role in caring for the most vulnerable members of society, yet their wages remain amongst the lowest across the job market. As of March 2024, 40% of adult social care workers in England earned below the Real Living Wage (RLW). At the same time, the sector experiences persistently high turnover rates, even when compared to other low-paid industries such as retail and hospitality.

Policy discussion tends to focus on the cost of addressing low pay, either through providers paying care workers more or government funding to providers increasing to cover the cost. There is far less attention on the ‘hidden costs’ of low pay — principally the costs that result from staff shortages and high turnover of staff. They may be considered ‘hidden’ as they go beyond financial costs of increasing wages, and are related to the inefficiencies, waste and lost output caused by regular and extensive staff turnover. These costs can be categorised as:

• Financial costs: Recruitment and training expenses for hiring new staff, agency staff costs to cover vacancies, time taken to onboard new staff, and contract hand backs and service closures due to staff shortages.
• Lost output costs: Time taken to hire and onboard new staff, the number of permanent vacancies, time needed for new hires to manage full caseloads and be fully trained, and increased sick days.

Low pay is a key driver of turnover of care workers

Qualitative insights from the care providers we spoke with suggested low pay can be a key driver of turnover in the social care sector. Our research found that 9 in every 10 care workers who moved jobs within the sector received a pay rise, not including increases resulting from uplifts to the National Living Wage (NLW).

Pay is often considered a ‘hygiene factor’, meaning it must meet a minimum level to attract and retain staff, even if it is not always their sole or top priority. Turnover is also influenced by management quality, working conditions, opportunities for career progression and competition from other sectors, such as retail, hospitality and manufacturing.

Recruitment of care workers has financial costs

Our analysis quantified the financial losses of recruitment based on provider data, including recruitment, training and agency expenses per new care worker hire. We estimate that:

• the median recruitment cost per care worker across organisations was £800, with costs ranging from £350 up to £3,711
• the median training cost per care worker was £884, with costs ranging from £100 up to £2,700
• the median agency cost per departing care worker was £3,683.86, with a range from £7.54 up to £17,013.08
• the median cost for the time taken to train one new care worker was £3,288.13, with a range from £450 to £8,614.71, assuming a new care worker is operating at 50% efficiency during their training period; it should be noted that time spent to train one new care worker is both a financial cost (for example, paying staff whilst they train) and an output loss (for example, work not delivered while new staff are not yet fully efficient in their role).

Recruiting a new care worker costs providers an estimated median of £7,870 per hire — this is higher than Skills for Care and Care England’s 2024 estimate of these costs summing to £4,000–£6,000, which was also based on a survey of providers. Costs varied considerably by providers, with the biggest variation in costs being the use of agency staff. This is likely to reflect that in some services, providers are having to rely on agency staff over an extended period. It may also reflect the different local markets that they operate in, and the specific recruitment challenges they face.

These figures do not account for the additional financial impact of the Employer National Insurance Contribution (ENIC), which is not paid during a vacancy, or the operating surplus foregone as a result of output not delivered. These are addressed at sector level below.

Turnover is a drain on the output of the social care sector

The true cost of low pay in the social care sector extends beyond direct financial expenses and is deeply tied to workforce instability. Providers identified how the constant processes of turnover, recruitment and training create conditions that make it harder for them to deliver care to their clients

Our analysis quantified lost output costs based on provider data, examining the time taken to replace a care worker and the time required for a new care worker to be working independently. We estimate that:

• the median cost of lost output due to time taken to recruit a care worker was £4,625, ranging from £2,819.40 up to £5,994
• the median cost for the time taken to train one new care worker was £3,288.13, with a range from £450 to £8,614.71, assuming a new care worker is operating at 50% efficiency during their training period.

We estimate that the total lost output cost per care worker vacancy, including the time taken to recruit and to train a care worker, is £9,282.13. 

Impact of increasing pay to reduce turnover 

The evidence of this research is clear: low pay is costing the social care sector. Quite apart from the arguments that low pay is an unfair deal for care workers who perform an important role in society, low pay is making it harder to recruit and retain staff that the sector needs. 

Increasing pay across the sector to the RLW or higher will require additional resources, but it could also generate significant savings. Research conducted by Skills for Care suggests that over the course of 15 years, it would cost the public purse approximately £21 billion to pay everyone at least the RLW. However, across the same period, Skills for Care estimates that the NHS would save £2.7 billion as a result.

Using Skills for Care’s estimates of the staff turnover avoided and additional staff recruited in the event of the RLW being paid to all care workers, our analysis estimates that paying the RLW would:

• prevent lost output costs incurred to the social care sector worth the equivalent of £3.58 billion over 15 years
• save £2.99 billion in direct financial costs such as recruitment, training, and agency spending, as turnover falls
• cost care providers £378 million in ENIC over 15 years, but this would be offset by £442 million additional Gross Operating Surplus (GOS) generated on additional output over the same period.

Taking account of the benefits to the NHS, social care sector, and care workers, our analysis suggests that the investment in wages will be partially offset by financial savings, but also result in a more productive and secure care sector, that can better serve the workforce and people who draw on care.

The Government has announced its intention for a new Fair Pay Agreement for social care. Based on this research, we would welcome a new settlement for a properly funded settlement that boosts the pay for social care workers.

In this research, we examine the argument that undervaluing care work through low pay leads to negative — and often hidden — consequences. It also explores how investing in higher wages for care workers could contribute to a more stable and effective care sector.

Defining low pay

There is no single agreed definition of ‘low pay’. For the purposes of this research, we define low pay as roles earning at or near the National Living Wage (NLW) or National Minimum Wage (NMW). We compare this with roles that are paid the Real Living Wage (RLW) or higher. The RLW is set by the Living Wage Foundation every year and is designed to better reflect the real cost of living, distinguishing it from the statutory National Living and Minimum Wages.

We acknowledge that, while the RLW is specifically designed to set a level at which all workers should be able to maintain a basic minimum standard of living, there is an argument that the RLW itself is still relatively low pay. Nevertheless, we see the RLW as an essential starting point for raising wages in the sector. It should serve as a minimum baseline, rather than the limit of ambition.

In this report, we drew together a range of primary and secondary evidence with the aim to:

• identify areas of cost associated with low pay through academic evidence and qualitative interviews with care providers
• establish the link between low pay and staff turnover, through academic evidence and qualitative interviews with providers
• quantify the financial and ‘hidden’ lost output costs to the sector per vacancy using financial data gathered from providers
• consider the potential impacts of paying a higher wage to care workers on the hidden costs of low pay, using Skills for Care sector-level analysis. 

A detailed methodology and analysis are included in the Technical Appendix — Research Method.

The scale of low pay in the social care sector

As of March 2024, around 40% of adult social care workers in England were being paid under the RLW (Skills for Care, 2024a), which at the time was £10.90 per hour outside London and £11.95 in London, to reflect the higher cost of living. Care workers’ wages across the board remain among the lowest in the job market (Skills for Care, 2024a).

Pay in the social care sector is not just low, but it is also seen as uncompetitive as workers are paid less than comparable Healthcare Assistant roles in the NHS (Skills for Care, 2024a). In fact, social care is often seen as a ‘stepping stone’ into the healthcare sector, with 9% of the turnover of care workers moving into similar roles in the NHS (The Health Foundation, 2022a).

As of March 2024, care workers in London were the least likely to be being paid the RLW — with 62% of all care workers (including both care workers and senior care workers) in London being paid under the RLW. However, low pay was widespread across all other regions of England, with between 22% and 51% of care workers earning below the RLW in different parts of the country. Analysis conducted by Skills for Care for this report (see Technical Appendix 1) explored the scale of low pay in the independent (not local authority) sector by region.

In 2023/2024, care workers were slightly less likely to be paid the RLW in care homes, and care homes with nursing, compared to those in registered community services (like extra care housing, supported living services and domiciliary care). The proportion of care workers earning below the RLW was:

• 39% in care homes
• 39% in care homes with nursing
• 37% in registered community services.

This suggests that low pay is a widespread issue across all care settings. It should be noted that Skills for Care’s research indicates that the local authority sector is more likely to pay RLW. Analysis conducted by Skills for Care for this report (see Technical Appendix 1) explored the prevalence of low pay in the independent sector by service type.

There is also a clear gender and racial inequality dimension to low pay in the social care sector. Women and people from minority ethnic backgrounds make up a significant proportion of the social care workforce (Skills for Care, 2024a) and are also more likely to be living in poverty, as previously highlighted by the Joseph Rowntree Foundation (JRF) (2024).

Workforce challenges in social care appear to be worsening

The challenges recruiting and retaining the workforce for adult social care in England appear to be worsening. Recent findings from Hft’s Sector Pulse Check (2025) highlight that in the past year, providers have reported:

• 48% increased usage of agency staff
• 43% increasing costs of permanent recruitment
• 33% decrease in the number of applications for vacancies
• 86% citing pay as a barrier to recruitment
• 29% having to refuse new admissions to services.

Additionally, the challenge in social care seems to be particularly acute compared to other sectors. The social care sector has an 8% vacancy rate for care workers (Skills for Care, 2024a), which is on average 3 times as much as other low-paid sectors such as retail and manufacturing (Kings Fund, 2024).

Low pay is often a driver of staff turnover

Low pay is widely recognised as a significant factor driving staff turnover in the social care sector. Research by Vadean and Saloniki (2023) demonstrates this relationship, showing that a 10% pay increase can reduce turnover by approximately 3 percentage points. Recent findings from a survey of over 7,000 people working in various roles across adult social care indicate that 7 in 10 people cite pay as a key factor in their decision to leave their job (Ipsos, 2025).

Based on Skills for Care workforce data, we found that in a group of 14,680 care workers who moved roles between March 2023 and March 2024, 9 in 10 social care workers received a pay rise as a result (see Technical Appendix).

While this does not confirm that the reason that people moved was to achieve better pay, it does corroborate insights from our interviews with care providers and the academic literature that suggest pay plays an important role.

Why pay matters to care workers

Providers suggested that there are several reasons that salary is important when care workers choose a job or decide to leave. There are the basic financial considerations about whether or not the role pays sufficiently to allow people to live and fulfil their financial responsibilities, but in addition, pay is a reward and mark of respect for the work that they do. For providers, continuing to value, recognise and reward their workforce through higher pay is a way to hold onto the workforce they need.

“[After Covid-19] we had more people leaving the sector in general and we’ve noted that and we felt that we needed a step change as an organisation, we needed a more permanent way to recognise our workforce and how much we value our workforce and so it felt like a good time to make that decision to move to the Real Living Wage.”

- Provider of housing, residential, and care services for older people

Providers also highlighted that demand for improvements in pay often comes alongside demand for improvements to other terms and conditions. However, they also noted that the hourly pay rate is what people are most drawn to when deciding to take or stay at a job, rather than, for example, other long-term benefits like higher pension contributions.

“We did a consultation a number of years back when we moved to the Real Living Wage for everybody and in order to achieve that we had to do some restructuring of terms and conditions at that time… It was almost 100% weighted towards get rid of all of that [other benefits] and have higher pay.”

- Provider of care homes, retirement living, and well-being services for older people

Pay is important in recruitment and retention decisions

Previous academic literature highlights that care workers have many different reasons for choosing or leaving a career in care. Pay is part of this decision-making process, though providers were clear that pay was not necessarily the top priority, particularly in terms of care staff retention.

Nevertheless, they did agree that pay must meet a minimum level to attract and retain staff, and if it falls below this point, increasingly staff begin to find other reasons to look elsewhere.

Given the challenges of social care work, low pay makes recruitment and retention more difficult. In many cases, providers are reliant on their staff’s dedication to caring for their clients in order to offset less competitive pay and challenging working conditions. Providers must work hard constantly to avoid staff dissatisfaction, because there are opportunities for staff to earn similar or more money elsewhere.

“Pay is sort of a hygiene factor… we’ve got to work really hard, and our managers have to work really hard to make sure there’s a great environment, [because if not] there isn’t any other hook.”

- Provider of support, advocacy, and employment services for people with learning disabilities

Providers achieved better recruitment and retention by paying more

Providers reported that in recent years, they have implemented pay policies in response to recruitment and retention challenges. These have included increasing pay to RLW, regular incremental pay increases and improvements to wider terms and conditions linked to pay, for example paid sick leave. According to providers, many of these examples have been effective in reducing turnover of their care staff, reinforcing the link identified in academic literature between pay, recruitment and retention.

“[Our] success in paying real living wage — voluntary turnover for instance, [was] 29% in April 22 and at that stage it is when we made that commitment, and it fell to and currently in fact [is] 19%...”

- Provider of supported living, residential care, and outreach services for people with learning disabilities and autism

“The investment in the increases in pay at 6 months and 2 years are built on the argument that it supports a reduction in turnover… You know that that was the argument, we looked and saw that we had massive turnover in the first 6 months. How can we address that? That was one of the reasons we do an end of 6 months increase in pay for everyone who starts at the entry level.”

- Provider of residential, nursing, and dementia care services for older adults

The rising cost of living that has occurred over recent years continues to be a major concern for care staff, further emphasising the importance of pay in retention decisions. As costs have increased, providers are aware that their staff have been more attentive to their pay, as well as the availability of hours. Some organisations have introduced regional pay structures that account for local market conditions, recognising the significant differences in living costs and labour market pressures across different areas.

“So obviously with certain areas it’s more challenging because perhaps the cost of living in those areas is higher. So, we find even in parts of the North, you know sometimes people think the North is less affluent or it’s less costly. But we’ve got pockets like places like York, which can be really challenging to recruit.”

- Provider of support, advocacy, and employment services for people with learning disabilities

Factors beyond pay drive turnover

Whilst pay is often a factor that drives the high turnover of care workers, other factors also contribute. The academic evidence and interviews from providers set out clearly that this issue is multifaceted. Care workers often prioritise job satisfaction, working conditions and stable employment arrangements alongside fair pay, highlighting the need for a holistic approach to reducing turnover. Providers typically felt that pay was particularly important for recruitment, even if it was not the most important component of retention.

Management and working environment

Leaders from care providers highlighted that good-quality management and a positive working environment are key factors in whether staff choose to stay within a service. Services that get leadership ‘right’ and create a positive working environment were noted as being able to retain their staff, reduce sickness levels and increase engagement with their staff.

“So, what I find is that people don’t typically work for [organisation name]… They work for that care home and that local manager, the home manager of a service. So, the quality of that home manager and their leadership is really important. And what we see is that managers that get it right do retain colleagues. You know we’re able to retain colleagues and have lower turnover, lower sickness levels and much higher engagement.”

- Provider of housing, residential, and care services for older people

“One thing that I’ve never known in any other sector, but it is rampant in the care sector is if the home manager leaves and they go to another home, they poached loads of the staff… it’s not unusual if we see a spike in turnover, it coincides with a home manager leaving as well.”

- Provider of residential, nursing, and dementia care services for older adults

Opportunities for career progression

In some cases, opportunities for career progression, rather than pay alone, were the biggest reason for leaving. Many care workers see the NHS as a step-up, career wise, even if pay improvements are not the primary driver of their decision.

“At support worker level, unless people move on to somewhere quite specific between care providers, we don’t lose lot of people due to pay. It might be more about progression... I’d agree that pay isn’t much cited, highest reason for leaving is typically joining NHS for progression (albeit there are financial gains), relocating, affordability is probably in there.”

- Provider of support services for people with learning disabilities, autism, and mental health needs

Pay compaction between care workers and more senior roles

A growing concern among providers is the narrowing pay gap between care workers and senior care workers, as well as more senior roles, which can discourage staff from pursuing promotions and could then also lead to turnover. According to Skills for Care (2024a), care workers with at least 5 years of experience currently earn, on average, only 10p more per hour than those with less than one year of experience.

“We have to keep a real watch on that differential between carer and senior carer, which is the next step up… you know as everything goes up, like I say, it drops a little bit and somebody will say we're not taking on that responsibility.”

- Provider of care homes, retirement living, and well-being services for older people

Competition with other sectors and local market conditions

Providers also highlighted competition with other sectors is a key external factor influencing turnover, and it often varies by local employment market. The retail, hospitality and manufacturing sectors, which draw heavily on a large and low-paid workforce, are seen as major competitors, especially as they often offer similar wages for potentially less demanding roles.

“So, if there’s a new service, a new supermarket, that kind of thing will impact... We compete, if that’s the right word, with other sectors as well, so places like retail customer services, bars. And so, we look at what they pay and how they rate. But yeah, supermarkets are the key one.”

- Provider of care homes, retirement living, and well-being services for older people

“For example, Cornwall we pay the real living wage but when the summer months come everybody wants to go and work in, perhaps by the beach and things like that. So, we tend to have a churn.”

- Provider of support, advocacy, and employment services for people with learning disabilities

Financial costs associated with staff turnover

Building on the evidence that low pay can significantly influence staff turnover, the following section examines the financial costs associated with turnover from our conversations with providers. Many of these costs are borne by providers, including the costs of recruitment and training, and the need to employ agency staff to fill vacancies.

However, there are also less apparent financial costs to the health and care system, such as care contracts being handed back by providers to commissioners or the unnecessary use of NHS, due to lower quality of care.

Recruitment and training costs

The providers we spoke with acknowledged that the high vacancy rates have often forced them to adopt an ongoing cycle of backfilling vacant care worker roles, which can be costly.

These expenses include not only advertising the posts and administrative checks, but also Disclosure and Barring Service (DBS) checks, occupational health assessments, equipment and logistics for induction programmes.

“This constant churn necessitates ongoing investment in recruitment, training, and induction. Managing backfilling alongside the continuous cycle of training and recruitment remains a challenge. Even if you do fill roles, it’s a lot of work. We probably need more recruitment professionals, shared services team, pay roll, spending and so on.”

- Provider of care homes, retirement living, and well-being services for older people.

Additionally, the lack of standardised training across care providers adds to the cost and time the organisation must constantly undertake to ensure newly employed care workers are trained, even if they have worked as care workers previously.

“The fact that there is no consistency around training that people will have done, when carers move between organisations. It is a significant proportion, but there is no passport that goes with them.”

- Provider of care homes, retirement living, and well-being services for older people.

For some organisations, reducing staff shortages has meant relying on international recruitment and overseas visas for at least some time over the past couple of years. This resolved some problems with vacancies, but also added an additional cost to recruitment, with overseas visa costs noted by one of the providers as approximately £1,500 per hire. Tightening rules around overseas recruitment means this option is increasingly unavailable.

“We have been sponsoring people from overseas. It has been a part of it that has helped our recruitment position, and I would say was absolutely essential.”

- Provider of care homes, retirement living, and well-being services for older people.

Reliance on agency staff

Frequent staff turnover and difficulties in filling vacancies often lead to a reliance on agency staff. This comes at a significantly higher cost of typically 25% more than standard staffing costs. The Migration Advisory Committee (2022) found that organisations are often forced to pay £8.80 to £11.80 more per hour for agency cover.

The use of agency staff in social care is widespread. In 2022 alone, over £360 million was spent on agency staff to cover staffing shortages (Care England, 2024). The Migration Advisory Committee (2022) further notes that many providers rely on agency workers just to maintain baseline staffing levels.

However, research by Turnpenny and Hussein (2020) suggests that excessive reliance on agency staff can disrupt team cohesion, hinder long-term staff retention and negatively impact the quality of care. This creates a downward spiral, where staffing instability further exacerbates workforce challenges.

The providers we spoke with highlighted that, beyond the financial burden of agency staff, their use can also affect the quality of care for service users. This impact arises in 2 key areas:

• increased risk: agency staff are often less familiar with service users’ individual needs, routines, and preferences, which can compromise continuity of care
• emotional distress: even if the quality of care being provided remains consistent, service users may find the frequent presence of unfamiliar agency staff unsettling, leading to anxiety or distress, and thus a lower experience of care than they deserve.

“We have to have sufficient numbers of staff, so we’ll call on [agency staff]... And the impact of that is obviously on the quality of care. People not knowing our services, not knowing residents, that puts more time and effort on the manager to oversee it, to manage that additional risk.”

- Provider of care homes, retirement living, and well-being services for older people.

Handing back contracts or closing services due to staffing challenges

Three providers reported experiences of handing back contracts, closing services or declining contracts due to staffing challenges. This included:

• handing back 16 contracts in the past 12 months, all of which had been affected by staffing challenges
• closing homes due to a lack of regional demand for specific services, as well as difficulties in attracting staff.

While handing back contracts or closing services due to staffing shortages is not a widespread issue among all providers, these findings highlight that when it does occur, the financial impact can be significant, not to mention the potential for adverse impacts on local care markets and the people who rely on services.

The Association of Directors of Adult Social Services (ADASS, 2023) identified that more than half a million hours of homecare were left undelivered between January and March 2023 due to workforce shortages. This equated to an estimated £14.7 million in lost care provision. Additionally, Care England (2022) identified staff shortages forced 69% of providers to rely more on agency staff, 18% to close services and 42% to hand back contracts.

Costs to the NHS

Low wages in social care also have direct consequences on the quality of care that service users receive, which can in turn place additional strain on the NHS.

Previous research by Allan and Vadean (2023) has shown that higher wages for care staff are positively associated with better care home quality ratings, even after accounting for factors such as care needs and staff qualifications.

Additionally, interviewed providers highlighted that high workforce turnover is closely linked to a lack of continuity in care and, in some cases, poorer care outcomes. There is a range of evidence, particularly in older people services, that suggests where there is poorer quality care, service users come into more frequent contact with the NHS:

• 8% of all emergency admissions come from care homes, with 772 A&E visits per day (NHS England, 2023)
• 45% of ambulance call-outs to care homes are for residents who have fallen but are uninjured and do not require hospitalisation (Mangar Health, 2018); each ambulance call-out costs between £172 and £252 (NHS Digital, 2022), with overnight hospital stays adding £345 per patient per night (UK Parliament, 2023)
• 13% of hospital beds are occupied by patients awaiting social care support, reducing NHS outpatient, surgical, and emergency capacity (Lord Darzi, 2024).

Recent calculations from the Local Government Association (2024) indicate that every £3 spent in social care saves the NHS £1.

Lost output associated with staff turnover

Building on evidence that low pay contributes to high staff turnover, this section explores the output loss as a consequence of workforce instability, based on insights from our conversations with care providers. These are the costs that are sometimes considered ‘hidden’ because they do not incur a direct financial cost but that nevertheless represent a drain to the providers and the care sector at large.

These include costs to providers, such as due to the time taken to recruit and train staff, or loss of staff due to sickness. They also include negative impacts for the whole health and care system, due to the effects of continuity of care being disrupted.

Time taken to hire and train staff

The time needed to go through the process of hiring, then inducting and training new care workers once they are in place is intensive and can result in losses of output and productivity for providers. The time needed for recruitment means that managers are taken away from their other core responsibilities overseeing services and coordinating care.

A consequence of this disruption can mean that opportunities to identify and prevent issues earlier may be missed, as managers have less time to oversee care. Where managers are required to cover shifts on the floor as well as their usual duties, this can also contribute to burnout of managers.

“The more new staff you take on, then you’ve got the knock on effect of time to induct; managers’ time or the staff time buddying and shadowing and you know, so that has quite an impact. I guess we never feel like we get to that kind of stable level of staff… So, we had a great service managers conference earlier this year… the main topic of conversation was about the service managers’ workload. You know [workload is tough] when they’re spending so much time recruiting and there’s new people who are less experienced.”

- Provider of support, housing and community services for people with learning disabilities and mental health needs.

“Well, there is no buffer due to pay, so our managers have to spend a lot of time on people management, because as soon as they don’t do this, people start to leave. And actually they are either in prevention mode or remedial mode all the time… Where is the time to do the value add, that’s the cost of the dynamic of constantly managing that. It’s stressful as an environment for managers, a real treadmill.”

- Provider of support, advocacy, and employment services for people with learning disabilities.

New staff will also require time to become fully effective. On average, providers reported that it takes up to 6 months for a new care worker to be fully trained and able to carry out their duties unsupervised.

This transition period is demanding for managers and existing staff, who must devote limited capacity to training and oversight. The impact is even greater in lone-working roles, such as home care, where an extended shadowing period may be necessary before a member of staff can be safely allowed to work unsupervised.

“Well, there is a productivity gap with new starters, they shadow, they don’t deliver on the care you want, lots of training, etc. for the first 4–6 months, you’ve got a worker but a big productivity gap, then the costs of DBS, back office cost, the HR and training.”

- Provider of mental health support, advocacy and crisis services for people with severe mental illness.

The need for additional oversight of new recruits during these periods can limit the sector’s ability to innovate, as care workers’ and managers’ time is taken up by training and supervision. Providers described a culture of ‘firefighting’, where long-term service improvements are deprioritised due to immediate workforce challenges. This is especially the case when a manager’s time is being spent on overseeing recruitment and/or overseeing new recruits or filling in for vacancies, as it eliminates whatever time might be available to reflect more broadly on how services can improve.

“I think it reduces our capacity to be innovative because we’re just constantly trying to get through day-to-day and year-to-year.”

- Provider of mental health support, advocacy and crisis services for people with severe mental illness.

“There is that doom loop of managers filling shifts, rather than all the planning, auditing, quality supervision and quality control, forward planning. They can’t do that as well when they constantly work, the relationship building, the compliance, it all suffers. The services that struggle with staff, all pick up other issues along the way, you just do get stuck on getting through the day.”

- Provider of mental health support, advocacy and crisis services for people with severe mental illness.

Burnout and staff sickness

Low pay in social care not only affects staff members’ financial stability but also contributes to stress, burnout and reduced care quality. Many care workers take on excessive overtime to fill staffing gaps, leading to exhaustion and a cycle of high turnover and shortages. This places additional strain on remaining staff, who must take on extra responsibilities, further impacting morale and well-being.

“Where services are struggling with staff shortages, there is considerable pressure on both current staff and managers. Managers are often covering for staff, while existing staff are taking on substantial overtime. Staff shortages and overtime have a negative impact on performance and on ensuring new staff are trained effectively and quickly enough to be operational.”

- Provider of support, housing and community services for people with learning disabilities and mental health needs.

The high sickness absence rate in social care can be another consequence of low pay and burnout. For example, the average care worker takes 9.9 sick days per year, making the sector one of the highest for sickness absence across all occupational groups (Skills for Care, 2024a). For comparison, in 2022, the average UK worker took 5.7 sick days (ONS, 2023).

This higher rate of sickness amongst care workers contributes to financial costs through increased agency fees and as well as lost working hours, while also heightening workload pressures and undermining team morale. The providers we spoke with commonly relied on agency staff not only to cover vacancies but also to manage staff sickness absences.

Additionally, low pay can create financial barriers that indirectly lead to absences. For example, care workers may struggle to afford unexpected costs, such as car repairs, which could prevent them from attending their shifts, further exacerbating staffing pressures.

“If you look at our sickness rates compared to other sectors [they are worse]. If you look at our business support sickness rates opposed to our frontline sickness rates, they’re very different. I know there’s lots of other reasons for that… But undoubtedly low pay is bad for people.”

- Provider of supported living, residential care and outreach services for people with learning disabilities and autism.

When organisations struggle with staff shortages, the focus often shifts towards keeping services running, leaving little room for staff development and long-term improvement. Managers can become overburdened, often covering shifts themselves or managing frequent recruitment and retention issues. This can lead to burnout among managers, reduced oversight of staff well-being and an increased risk of sickness absence and poor performance management.

“Managers are less able to devote time to managing staff sickness, which incurs costs for us… In the sense that if managers are doing that then they’re probably not able to devote as much time to things like managing sickness, and that has the side direct cost to us for backfill for sickness. They’ve probably not got the capacity to manage people’s performance.”

- Provider of supported living, residential care and outreach services for people with learning disabilities and autism.

Reduced quality of care

Prolonged vacancies and staffing shortages not only increase costs but also undermine the continuity and quality of care. Part of this dynamic is simply that worn-out and overworked staff will, understandably, often find it harder to provide their best quality support to clients.

“Our care colleagues remain amongst the lowest proportion of earners in the country, that has an ongoing impact on the ability to deliver high quality care and I’d say that that’s because it’s difficult for them to achieve a work-life balance. There are a number of care colleagues out there that can’t say the last time that they took a proper holiday and that they are worrying about affordability of things, you know, in terms of paying bills, keeping the heating on, paying for shopping.”

- Provider of housing, residential and care services for older people.

One of the most significant concerns providers have regarding quality is the lack of continuity of care. Frequent staff turnover and the reliance on agency workers means that service users may not receive consistent, person-centred support by someone who knows them well, which can negatively impact their well-being and overall care experience.

Another key issue raised by providers were increased safeguarding concerns. Some providers reported a rise in safeguarding incidents, potentially due to the presence of less experienced staff and the greater use of temporary workers who may not be as familiar with service users’ needs and routines. This lack of stability in staffing can compromise service quality and safety.

“What you find is that if someone’s actively recruiting a number of colleagues, it means that they are understaffed within the service, meaning that if they’re using agency and they’re more reliant on that, it means that there’s a higher risk of incident because people are not as familiar with resident groups. So it starts to manifest itself into a big problem because you have an increase in risk profile, less management oversight, fewer people familiar with resident groups, less interaction and conversation with family members and external professionals.”

- Provider of housing, residential and care services for older people.

“It really upsets them [service users], especially if we’re having to use agency... So yeah, it definitely impacts the quality of the care in that respect, isn’t it? And then, like I’ve said, we have had more safeguarding incidents, complaints and so on, so the quality of care.”

- Provider of support, housing and community services for people with learning disabilities and mental health needs.

Beyond individual providers, the quality of social care services has wider implications for the health and social care system. Gaps in care increase demand on NHS services, such as A&E visits and ambulance callouts. Moreover, a well-supported care workforce enables a shift toward preventative care, helping to ease the burden on the NHS.

“We can reduce the burden on the NHS — that’s the biggest impact we think we can make. We’ve had individuals, people call ambulances because they were nervous about their carers attending, reduced calls. If we can reduce the amount of falls, that would reduce the burden on A&E enormously. If you have higher paid [model], not on time and task, we can do [a] more preventative model.”

- Provider of home care and well-being support for older adults and people with disabilities.

How care providers are responding to the challenges of low pay

With the constraints of low pay, the care providers we spoke with described implementing a range of strategies to remain competitive in recruiting and retaining care workers.

Providers strengthened current recruitment practices to improve efficiency and reduce dropout rates during the hiring and onboarding process. They did this by, for example, using digital tools for recruitment and onboarding to streamline processes; appointing recruitment leads to focus on advertising, networking and hiring of care workers; and using campaigns, careers fairs and new recruitment platforms to attract and engage the right candidates.

Providers also expanded well-being and financial support for staff, for example by expanding programmes focused on mental and physical well-being, including employee assistance schemes, access to GP services and staff inclusion groups. They also provided financial initiatives such as salary advances, savings schemes and rental deposit schemes to help employees manage unexpected expenses and avoid debt.

Finally, providers tried to recognise and reward staff contributions in other ways beyond their hourly pay to make workers feel valued and improve their morale and retention. These included providers engaging in formal recognition and reward programmes, and supporting and encouraging career progression within the sector.

Data sample

In quantifying the financial and lost output costs associated with turnover, we have used financial data from 11 providers who are primarily independent sector care providers. This data is not necessarily representative of the care sector and is likely to better reflect the experience of larger care providers who have bigger workforces (and are more likely to experience challenges associated to recruiting and retaining their workforce). It is illustrative, however, of the challenges affecting large parts of the social care sector.

The data considers a broader selection of costs associated with staff turnover than previous research that is focused primarily on the financial costs of recruitment.

Our sample of providers does include a diverse range of services for both working-age and older adults, and spans all regions of England. It provides a good illustration of what is likely to be happening across the sector, although individual providers or local areas will have diverse experiences based on a variety of factors.

Having data from larger providers enabled us to capture data from a larger share of the market. However, it also limited the representation of smaller, local or regional providers, who form a substantial part of the sector.

When we triangulate our analysis of the financial data with the academic literature and qualitative data from provider interviews, there is consistency between sources, suggesting that there are hidden costs associated with low pay that affect the social care sector. This gives us confidence that our research is likely to capture the experience of many providers in the sector.

Further research could expand on this work by using a larger, more diverse, and representative sample of providers to build a more detailed analysis of the effects of low pay on the care sector.

Financial costs based on provider data

Recruiting care workers incurs significant financial costs, including recruitment, training and agency expenses. Based on data provided by 11 providers, the estimated costs are as follows:

• the median recruitment cost per care worker across organisations was £800, with costs ranging from £350 up to £3,711
• the median training cost per care worker was £884, with costs ranging from £100 up to £2,700
• the median agency cost per departing care worker, which was £3,683.86, with a range from £7.54 up to £17,013.08
• the time required for a new care worker to work independently: based on the average time taken to meet all the required internal standards to work independently, and using the average hourly pay for a care worker at the organisation we estimated the cost of lost output for each provider — assuming care workers operate at 50% efficiency during this period, the median value of time lost training one new care worker was £3,288.13, ranging from £450 to £8,614.71.

It should be noted, in our calculations, the time spent to train one new care worker is recorded as both a financial cost (for example, paying staff whilst they train) and lost output cost (for example, reduced productivity while new staff are not yet fully efficient in their role) and therefore will appear in both figures.

The median total financial cost for recruitment, training and agency expenses, plus the cost of time for a new care worker to work independently, per new care worker hire was £7,870.38. These figures are higher than previous industry estimates that the cost of recruiting one new care worker ranges between £4,000 and £6,000 (Care England, 2024).

However, we note that the financial costs vary considerably, with the most cost effective being £4,281.77 and the highest cost being £20,921.21 per vacancy. Figure 1 shows the breakdown by organisation of the financial costs associated per vacancy.

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JRF and Cordis Bright would like to thank the 12 care providers who participated in interviews, provided access to data and generously gave their time and support for this research. These included:

• Belle Vie
• Certitude London
• Community Integrated Care
• Dimentions
• Grace Eyre
• Lifeways
• Mencap
• Mental Health Alliance
• Rethink Mental Illness
• Together for Mental Wellbeing

Additionally, we would like to thank Skills for Care for their invaluable support, including providing access to data, assisting with analysis, and conducting specific analyses for this report.

Cordis Bright provides research, evaluation, advice and consultancy aimed at improving public services. Cordis Bright wrote this report and collected data from the 12 participating providers.

Joshua Butt is a Principal Consultant at Cordis Bright. 
Dr Lucy Webster is a Senior Consultant at Cordis Bright. 
Samyukta Srinivasan is a Researcher at Cordis Bright. 
Karim Bukleb is a Researcher at Cordis Bright. 
Tom Noon is the Chairman of Cordis Bright.

Butt, J. Webster, L. Srinivasan, S. Bukleb, K. Noon, T. (2026) The hidden cost of low pay in the social care sector. York: Joseph Rowntree Foundation