Good Work for All: Penrose Care, bucking the low-pay trend in the care sector

Penrose Care are a small privately-owned business in the home care sector. The founders established Penrose Care as a Living Wage employer from the outset as well as providing other benefits. Service users are overwhelmingly positive about the care they receive, and the business has had no care worker voluntary leavers since it was founded.  Penrose Care also has negligible levels of sickness absence and has been able to recruit staff without actively advertising.

Penrose Care are a small privately-owned London based business established in 2012 in the home care sector – providing a range of services from short visits, to live-in care. They deliver elderly care, disabilities care, domestic services and childcare agency services.
 
With the view that there is a need to 'fundamentally reform the home care sector in the UK to help improve elderly care and disabilities care,' the co-founders Robert Stephenson-Padron, Managing Director, and Dr Matthew J. Knight, Non-Executive Director of Penrose Care wanted to integrate core moral values into their business model. These included treating vulnerable people with human dignity, and to act ethically in their business.
 
In October 2012 Penrose Care became an accredited Living Wage Employer, three months after the company was founded. In doing so they were 1 of only 3 accredited Living Wage Employers in London’s home care sector of around 745 agencies, and just 1 of 4 in the whole of England, of almost 6,000 agencies, at the time of their accreditation in 2012. In September 2014 they remained 1 of 4 accredited home care providers in London, now of over 1,000 agencies.
 
The process
Recognising that workers in the home care sector are particularly subject to low pay rates, including in some cases below the minimum wage, the founders established Penrose Care as a Living Wage employer from the outset. In doing so they included the payment of the London Living Wage (LLW) in their business model when establishing their organisation. Furthermore, to meet their objectives to provide a personal level of service, they aimed to employ the best professionals in the sector and linked this objective to the payment of the Living Wage.
 
 
While the organisation did not directly/actively seek ethical investment to fund the start-up of their business, Robert Stephenson-Padron has offered his view that all of the business’ “owners are personal owners and I do believe that some, if not all of them, decided to become co-owners of Penrose Care as a result of its pioneering commitment to ethics and the extremely high regard it has for integrity”.
 
Benefits
In addition to being a notoriously low paid sector, home care is recognised for a high turnover of staff. Many care workers in the UK lack basic skills, and that the high turnover of staff is damaging to the quality of care. Indeed, the Equality and Human Rights Commission has linked low pay with high staff-turnover and the non-continuity of care staff, and an issue that is regarded as a significant threat to the human rights of the elderly. 
 
Furthermore, Mr Stephenson-Padron asserts that paying the Living Wage makes employees feel more secure, and are consequently better able to make people in their care feel safe. In addition to paying the Living Wage, Penrose Care compensates workers for their travel time – something that over 80% of other independent care sector employers reportedly do not do.
 
Feedback from users of the organisation’s services has expressed high satisfaction with the service provided, evident from an average feedback score of 4.9 out of 5 from a customer satisfaction survey, and numerous positive testimonials. The business has had no care worker, voluntary leavers, since it was founded in 2012, although Penrose Care expects this to change to a more sustainable “extremely low staff turnover”. The level of sick days taken by employees is “negligible”. The business has been able to recruit staff without the need to actively advertise positions.
 
Lessons learnt and advice for other employers
It was recognised that paying the Living Wage would impose an extra cost on the business relative to competitors. This required, in some cases, a slightly more expensive cost of service – but it was believed that users would be willing to pay a premium to receive “outstanding levels of care”.
 
“We incorporated the London Living Wage into our business model from the very beginning. It meant we were going to have a higher cost base than our competitors but we had the firm belief, and this has been confirmed by our success to date, that there would be users of home care services willing to pay a little bit more than average to secure better care workers, with excellent training and high morale, from a provider that genuinely cares for them.”
 
The decision to incorporate the Living Wage on the basis that users would be attracted to the business, as a result, is backed up by some external evidence – a poll by Censuswide identified that “73.5% of the general public agreed that ‘when choosing a care provider for a loved one, I would like to know that the people looking after them were being paid a Living Wage.”
 
The managers of the business decided to pay themselves less than the average rate for their roles to cover the cost of the Living Wage for their staff. Employees are required to be more efficient in their working practices. This includes utilising the abilities of a number of staff that have multi-disciplinary skills and are competent in a number of roles, as well as adopting a state of the art IT system to maximise the time workers can undertake care activities over administrative tasks. Realising the benefits of increased efficiency through multiple roles for staff, limiting idleness and reducing administrative costs, and furthermore developing the skills and competencies of workers.
 
This case study has been produced by The Living Wage Foundation.
 
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