Determinants of labour supply amongst aged care workers: A multivariate analysis

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1 Determinants of labour supply amongst aged care workers: A multivariate analysis Report to the Department of Health and Ageing National Institute of Labour Studies, November 2005 Bill Martin

2 Table of Contents EXECUTIVE SUMMARY INTRODUCTION DATA AND ANALYSIS LABOUR SUPPLY EXPECTATIONS LABOUR SUPPLY CURRENT CONTRACT TYPE LABOUR SUPPLY DESIRE TO WORK MORE HOURS WHAT DETERMINES JOB SATISFACTION? WAGE DETERMINANTS CONCLUSION...34 List of Tables TABLE 3.1: NURSES AND PERSONAL CARERS EXPECTATIONS ABOUT FUTURE EMPLOYMENT IN THE AGED CARE INDUSTRY... 9 TABLE 3.2: DETERMINANTS OF NURSE S EXPECTATIONS ABOUT STAYING IN AGED CARE OVER NEXT 12 MONTHS AND NEXT 3 YEARS TABLE 3.3: DETERMINANTS OF PC S EXPECTATIONS ABOUT STAYING IN AGED CARE OVER NEXT 12 MONTHS AND NEXT 3 YEARS TABLE 4.1: PROPORTION OF NURSES AND PCS WHO ARE EMPLOYED CASUALLY AND WHO WORK FULL- TIME TABLE 4.2: DETERMINANTS OF WHETHER NURSES ARE EMPLOYED CASUALLY AND WORK FULL TIME17 TABLE 4.3: DETERMINANTS OF WHETHER PCS ARE EMPLOYED CASUALLY AND WORK FULL TIME TABLE 5.1: PROPORTION OF NURSES AND PCS WHO WOULD PREFER TO WORK MORE AND FEWER HOURS PER WEEK TABLE 5.2: PROPORTION OF NURSES AND PCS WHO WOULD PREFER TO WORK MORE AND FEWER HOURS PER WEEK BY WHETHER CURRENTLY FULL-TIME OR PART-TIME TABLE 5.3 DETERMINANTS OF ADDITIONAL HOURS NURSES AND PCS CURRENTLY WORKING PART- TIME WOULD LIKE TO WORK TABLE 6.1: JOB SATISFACTION AMONGST NURSES AND PCS TABLE 6.2: DETERMINANTS OF NURSES AND PCS JOB SATISFACTION TABLE 7.1: DETERMINANTS OF NURSES AND PCS HOURLY WAGES TABLE 7.2: DETERMINANTS OF PCS AND NURSES WAGES... 33

3 Executive Summary What factors affect labour supply in aged care facilities is a crucial issue for those managing facilities, and those making policy in the area. In this report, we examine the factors that affect labour supply by analysing the behaviour, attitudes and experience of employees surveyed in The report uses information from a census of aged care facilities and a random sample survey of direct care workers to investigate these issues. We use multivariate techniques of data analysis to investigate the unique contribution of a wide range of factors to outcomes related to labour supply. The behaviour, expectations and intentions of those currently employed as direct care workers are very important factors in the future supply of such labour. Our earlier research showed that aged care facilities currently replace about 20% of their Nurses and Personal Carers each year, a fairly high rate of turnover. Clearly, understanding the factors that predict turnover is important. We also know that 65% of all direct care workers work part-time, thus forming a large potential pool of additional labour. Indeed, 28% of all direct care workers indicated that they would like to work more hours than they currently do. Thus, understanding what factors affect part-timers interest in working additional hours is also important in fully comprehending the determinants of future labour supply. This report focuses on the following six labour supply related outcomes amongst Nurses and PCs employed in aged care facilities at the time of our surveys: Their expectations of remaining in the aged care sector in 12 months and 3 years; Whether they work part-time or full-time; Whether they are employed on permanent or casual contracts; Their desire to work more hours; Their job satisfaction; Their wages. -1-

4 In investigating the determinants of these outcomes, we focus on four sets of factors related to: Employees employment arrangements and preferences; Employees experience of work; Employees personal characteristics; The characteristics of the facilities where employees work. The dominant factors affecting employees expectations about remaining in the aged care sector are how well their employment arrangements fit with their preferences, and how they experience their work. Thus, employees are more likely to expect to leave the sector if: they work unsocial hours, they would prefer different shifts or different hours, they feel their skills are not used at work, they feel under pressure to work harder, or they have relatively low job satisfaction. There are some indications that those with more employment choices (because they have greater human capital) are more likely to expect to leave the sector, but these are equivocal. Thus, employment arrangements and how employees experience work, both under the influence of management practices, are the dominant determinants of current employees expectations about remaining in the aged care sector. Employers preferences and practices appear to be the dominant influences on whether employees work on casual or permanent contracts. They also have a major influence on the hours direct carers work. However, hours of work are also influenced by carers needs and the demands of their family roles, an unsurprising finding given that almost all direct care workers are women. Nevertheless, there is little doubt that employers have real additional labour at their disposal in the form of employees who are prepared to work more hours. Analysing what influences the number of additional hours employees would like to work shows that those wanting to work longer or shorter hours are not sharply distinguished from others. In the case of PCs, this is largely due to the fact that hours of work appear to be determined mostly by employers preferences, with many PCs wishing to work more hours. In contrast, most Nurses wanting to change their hours would prefer to work fewer hours. Again, employers preferences, this time for Nurses to work longer hours than they would like, appear to be the primary -2-

5 determinant of their hours. It also appears that employers often trial new employees on limited hours and casual contracts before giving them more permanent employment and longer hours. Job satisfaction is important in determining future labour supply since it has significant influence on employees expectations about remaining in the aged care sector, as do related subjective experiences of work. Our analysis shows that we can identify many of the major influences on job satisfaction, and that most are under the influence of employers. Far and away the most important determinants of job satisfaction are employees direct work experiences how much time they are able to spend in direct care, whether they use their skills on the job, whether they have some freedom to decide how to do their work, and whether they feel under great pressure to work harder. The other major determinants of work satisfaction relate to whether employees are able to get the shifts and hours they prefer. Our analyses of Nurses and PCs wage levels shows, first, that both groups have quite compressed wage distributions. Nurses experience some wage premiums from higher levels of education and greater experience. However, PCs do not receive these premiums. Indeed, PCs who complete aged care qualifications (Aged Care Certificate III or IV) cannot expect to experience any rise in wages. We do find a premium to being employed as a Nurse rather than a PC that cannot be explained by differences in any of a large range of labour market and personal factors. This suggests that PCs would face a strong incentive to upgrade to nursing skills and qualifications if an appropriate pathway existed. -3-

6 1. Introduction The determinants of labour supply in aged care facilities are a crucial issue for those managing facilities, and those making policy in the area. The main report of our project on the labour force in the industry suggested that there is not a current crisis in the labour market for direct care staff, though there are significant signs of stress, particularly in relation to registered Nurses (Richardson and Martin 2004). However, these signs of stress are of policy concern, and it remains possible that they could turn into a more substantial difficulty for the industry under certain conditions. Even without the sense of possible crisis, the factors that affect labour supply will be of great interest to managers and policy makers as they seek to satisfy labour demand most efficiently. In this report, we examine the factors that affect labour supply by analysing the behaviour, attitudes and experience of employees surveyed in our study. We are fortunate in being able to link what employees tell us about themselves and their work experiences with data about the facilities in which they work (obtained from our facilities census). This gives us the capacity to assess the contribution of both individuals characteristics and those of their workplaces in determining their labour supply behaviours and intentions. The labour employees supply to the industry is affected by two sets of issues: whether they remain in the aged care industry, and, if they do, how many hours they work. Our main report identified a significant issue of labour turnover in the industry, with around 20% of both Nurses and Personal Carers needing to be replaced every year (Richardson and Martin 2004: 31). Indeed, 29% of Nurses and 24% of Personal Carers indicated that they did not expect to be working in aged care 3 years after they were surveyed (p. 43). Our first step therefore is to analyse the factors that affect employees intentions to remain in the aged care workforce. A second determinant of labour supply is the hours that employees work. Part-time work is the norm amongst aged care workers, with 65% of direct care workers being employed less than full time (p. 23). Moreover, about 18% of Nurses and just over 20% of Personal Carers are employed on non-permanent contracts, mostly as casuals (p. 20). Both part-time workers and casual workers are likely to provide a source of additional labour if demand rises, so we examine what factors are associated with whether workers fall -4-

7 into either of these categories. Finally, in relation to labour supply, about 28% of direct care employees said that they would prefer to work more hours than they currently do (p. 24). This gives us a direct measure of employees willingness to supply additional labour to the industry, so we examine what affects these preferences. Our earlier report suggested that the satisfactions direct carers experience in their work is a major factor in what they like most about their jobs, and in their decisions to stay in the industry (pp ). Our analyses here on employees intentions confirm this picture. Our next step in this report, therefore, is to examine what factors affect workers job satisfaction. In particular, we examine how facility characteristics and work experiences affect job satisfaction, since these are under the control of managers and/or policy makers, at least to some extent. Finally, we examine the determinants of wages. Wage variation amongst Nurses and amongst Personal Carers is relatively small. It is therefore not surprising that our analyses in this report show that the variations that do exist have little or no effect on labour supply decisions. Our analysis of the wage variation that does exist is relevant mainly to future thinking about how wage patterns might be altered if it is necessary to search for mechanisms to increase labour supply. Analysing the determinants of wages helps us to assess whether there are any indications that Nurses and Personal Carers experience clear career paths that might induce them to remain in the industry. For example, do Personal Carers experience a wage premium for completing qualifications in aged care? 2. Data and Analysis This report uses the same data as the main report for our project (for details, see Martin and Richardson 2004). We focus on a survey of a random sample of direct care workers in Australian residential aged care facilities. The survey was conducted in late 2003, along with a census of all Australian residential aged care facilities. In this report, we use this data to investigate which factors affect a range of outcomes related to labour retention in aged care facilities. We have linked the survey and census data so that we are able to assess the impact of both employees individual characteristics and, those of the facilities where they work, on outcomes. So, for -5-

8 example, we can assess both whether an employees age affects their expectation to remain in the aged care sector, and whether there are differences in expectation between those employed in rural and metropolitan facilities. We examine the factors affecting the following six sets of outcomes, in this order: 1. Employees expectations about remaining in aged care work in the future; 2. Whether employees work on casual or permanent contracts; 3. Whether they work full-time or part-time; 4. Whether employees would prefer to work longer hours; 5. Employees job satisfaction; 6. Employees wages. In this report, we focus on Nurses and Personal Carers, primarily because these are by far the largest direct care occupations, and those about which there is greatest concern over future labour supply. We examine the effect of a broad range of factors on these five sets of outcomes. These factors can be placed into four groups: Employees employment arrangements and preferences; Employees experience of work; Employees personal characteristics; The characteristics of the facilities where employees work. Although factors from every group are assessed in relation to each outcome, not all factors are included in analyses of every outcome. So, for example, our analysis of employees wages does not include some employment preferences since there is no reason to expect these to affect wages. And, in some cases, factors that may affect an outcome are later treated as outcomes themselves. Employees employment contract types, job satisfaction and wage levels, for example, are analysed as possible influences on whether employees expect to remain in the aged care sector. However, later in the report each is itself treated as an outcome. This analysis allows us to build -6-

9 up a detailed picture of how employees labour supply intentions and preferences are determined. In more detail, we analyse the impact of the following factors on one or more of our five sets of outcomes: Employees employment arrangements and preferences: o Whether they work a normal day shift, an evening or night shift, or another irregular kind of shift (i.e., the analysis compares three groups) o Whether they would prefer to work a different kind of shift o Whether they would prefer to work more, fewer or the same number of hours as they currently do o Whether they are employed on a casual or permanent contract o Their hourly wage Employees experience of work o The amount of time they spend directly caring for residents in a typical shift o Their experience of work (including whether they are able to spend enough time with residents, their experience of skill usage, etc.) o Their job satisfaction o The amount of time they have worked for their current employer Employees personal characteristics: o Their sex o Their age o Whether they were born in a non-english speaking country o Whether they live with a partner o Whether they are the main earner in the household o How good their health is o Their care responsibilities at home o Their level (and type for PCs) of education o Whether they are currently studying an aged care qualification The characteristics of the facilities where employees work: o Whether they work in a metropolitan, regional or rural facility o Whether the facility has only high care places o The total number of employees in the facility -7-

10 o The ownership of the facility (not-for-profit, for-profit, or public ownership) To assess the impact of these factors, we use multivariate analyses logistic regression and OLS regression. These common techniques allow us to assess the unique effect of each factor in our analysis on an outcome. For example, we can assess the effect of a person s level of post-secondary education on wages independent of a range of other factors such as their age, what type of shift they work, whether they are employed on a casual or contract basis, etc. In all our analyses, we are able to decide whether a factor has an influence on an outcome, and the direction of that influence. For example, we can say whether or not having higher job satisfaction affects a person s expectation of remaining in the aged care sector in 3 years. If it does have such an effect, we can say whether higher job satisfaction makes a person more or less likely to remain in the sector. In some of our analyses, where we use OLS regression, we are able to be more precise about the size of the effects of each factor and their relative importance. 3. Labour Supply Expectations As we have already noted, our previous report found indicators of substantial turnover amongst direct care workers. Although some of this turnover will be due to movement between facilities within the aged care industry (which does not affect overall labour supply in the industry), a significant part will also be due to employees leaving the aged care industry altogether. Since departure from the industry is of greatest concern, we focus on whether employees intend to remain in the industry (rather than simply whether they expect to remain in their current position or organization). Our survey asked workers both where they expected to be in 12 months and in 3 years, and we examine each of these responses. Table 3.1 shows the proportion of Personal Carers and Nurses expecting to be in the aged care industry over each time period. It confirms the earlier picture of quite substantial turnover expectations amongst direct care workers nearly 30% of Nurses and nearly a quarter of PCs do not expect to be working in aged care in 3 years. But are some workers more likely than others to expect to be working outside the aged care industry in the future? -8-

11 Table 3.1: Nurses and Personal Carers expectations about future employment in the aged care industry Nurses PCs Do not expect to be working in aged care in 12 months 17.9% 13.6% Do not expect to be working in aged care in 3 years 29.1% 24.2% Total 1097/ /1358 Our analysis involves estimating logistic regression models for whether or not workers expect to be in the aged care industry in 12 months and 3 years. This analysis allows us to assess whether expectations are affected by most of the factors described above (Section 2). It provides estimates of the effects of each factor, independent of all the other factors in the analysis (or, to put it another way, controlling for all the other factors in the analysis). For example, even though we know that rural facilities tend to be smaller than other facilities, this procedure allows us to assess whether facility size or facility location or both factors (or neither) are affecting employee intentions. Table 3.2 shows the results of this procedure for Nurses expectations in 12 months and 3 years. It indicates that the following factors make Nurses more likely to expect to be working in aged care in 12 months: Employees employment arrangements and preferences: o Not being on a permanent evening or night shift o Preferring a different shift o Not being casually employed Employees experience of work o Feeling that many of one s skills are used in one s current job o Having higher job satisfaction Employees personal characteristics: o Being older o Having more years of secondary education o Having fewer years of post-secondary education The characteristics of the facilities where employees work: o Not working in a for-profit facility Nurses are more likely to expect to be working in aged care in 3 years if: -9-

12 Employees employment arrangements and preferences: o They are not on a permanent evening or night shift o They prefer a different shift to the one they currently work o They prefer to work more or less hours than currently employed Employees experience of work o They feel that many of their skills are used in their current job o They feel less strongly that they have the skills to undertake their job o They have higher job satisfaction Employees personal characteristics: o They are female o They are older o They were born in a non-english speaking country o They are the main income earner in their household o They spend more time caring for family members at home The characteristics of the facilities where employees work: o They are employed in a rural or regional facility (rather than a metropolitan one) o They are employed in a facility with only high care places o They are not working in a publicly owned facility -10-

13 Table 3.2: Determinants of Nurse s expectations about staying in aged care over next 12 months and next 3 years Next 12 months Next 3 years B Exp(B) B Exp(B) Shift type (0=regular day shift) Regular eve/night shift -.966** **.451 Irregular shift Prefer different shift.532* * Hours preferences (0=same as current) Prefer work less ** Prefer work more * Months at current facility Casual employee -.776* Wage per hour Time spent in direct care (0=more than two thirds) Less than a third time direct care Between one third and two thirds time Male *.456 Age.054** * Born non-english speaking country *.465 Live with a partner Main income earner * Self assessed health (0=good, fair or poor) Very good health Excellent health No. hrs caring for people in own household * Years secondary education.229* Years post-secondary education -.244* Currently studying aged care qual Able to spend enough time with each resident Have the skill I need to do my job *.740 Use skills in current job.148* ** Have freedom to decide how I do my work Do not feel under pressure to work harder Job satisfaction.053** ** Facility location (0=metropolitan) Regional facility * Rural facility * High care places only ** Total no. employees Facility ownership (0=not-for-profit) For-profit facility -.709** Publicly owned facility *.517 Constant * *.034 N Nagelkerke R *p.05 **p

14 Personal Carers expectations about their future in the aged care industry are affected by some of the same factors as Nurses, but there are also differences. Table 3.3 shows that the likelihood of PCs expecting to be working in aged care in 12 months is not affected by their employment arrangements or preferences, or by the characteristics of the facilities that employ them. However, the likelihood that they expect to remain after 12 months is increased if: Employees experience of work o They feel under less pressure to work harder o They have higher job satisfaction Employees personal characteristics: o They are older o They have aged care qualifications o They are not currently studying for aged qualifications By contrast, their expectations about remaining in the sector 3 years into the future are affected by a broader range of factors. The expectation that they will be in the aged care sector in 3 years is increased if: Employees employment arrangements and preferences: o They do not work permanent night or evening shifts o They would prefer to work more hours than they currently do o They have worked in their current facility for a shorter time Employees experience of work o They feel under less pressure to work harder o They have higher job satisfaction Employees personal characteristics: o They are older o They have less secondary schooling The characteristics of the facilities where employees work: o They work in facilities with fewer employees -12-

15 Table 3.3: Determinants of PC s expectations about staying in aged care over next 12 months and next 3 years Next 12 months Next 3 years B Exp(B) B Exp(B) Shift type (0=regular day shift) Regular eve/night shift *.580 Irregular shift Prefer different shift Hours preferences (0=same as current) Prefer work less Prefer work more ** Months at current facility *.996 Casual employee Wage per hour Time spent in direct care (0=more than two thirds) Less than a third time direct care Between one third and two thirds time Male Age.025* ** Born non-english speaking country Live with a partner Main income earner Self assessed health (0=good, fair or poor) Very good health Excellent health No. hrs caring for people in own household Years secondary education *.795 Years post-secondary education Hold aged care qualification.746* Currently studying aged care qualification -.962** Able to spend enough time with each resident Have the skill I need to do my job Use skills in current job Have freedom to decide how I do my work Do not feel under pressure to work harder.184** ** Job satisfaction.062** ** Facility location (0=metropolitan) Regional facility Rural facility High care places only Total no. employees *.795 Facility ownership (0=not-for-profit) For-profit facility Publicly owned facility Constant *.062 N Nagelkerke R *p.05 **p

16 Together, these results show that some factors have consistent large effects on Nurses and Personal Carers intentions. First, employees with higher job satisfaction are consistently more likely to expect to remain in the aged care sector. There are also strong indications that workers who feel their skills are used in their jobs, and who do not feel under pressure to work harder, are more likely to expect to remain in the industry. Second, employment arrangements and preferences also affect expectations significantly. Those on permanent night or evening shifts are particularly unlikely to expect to remain in the industry. Both Nurses and PCs who would prefer more hours are also much less likely to expect to remain in the sector in 3 years. And, in an indication that overwork may be a problem amongst some Nurses, preferring fewer hours makes Nurses (but not PCs) significantly less likely to expect to remain in the industry. In general, it appears that workers who are able to obtain the shift arrangements they would like are more likely to expect to remain in the aged care industry. Third, some personal characteristics affect employees likelihood of expecting to remain in the industry. In particular, the older an employee is, the more likely he/she is to have this expectation. There are two possible explanations for this result. Older workers may find it more difficult to obtain alternative employment, and may therefore expect to remain in the industry because they have more limited choices than younger workers. On the other hand, it may be that older workers have the same range of labour market choices as equivalent younger ones, but find aged care work more conducive than do younger workers, and therefore prefer it to the alternatives. The direct care workforce is generally significantly older than the general Australian workforce, a matter that has caused concern to some policy makers. For this reason, clearly establishing why older workers are more likely to expect to remain in the sector, and how work in the sector typically fits into careers, are important future research questions. Our results do indicate that workers with personal characteristics that give them less labour market capacity are often more likely to expect to remain in the aged care industry. For example, Nurses with less post-secondary education are less likely to expect to leave the sector in 12 months, and PCs with less secondary education are -14-

17 less likely to expect to leave the sector in 3 years. On the positive side, PCs who have invested in their skills in the area by obtaining aged care qualifications are more likely to expect to remain in the sector in 12 months (though, apparently, not in 3 years). Finally, facility characteristics have small effects on Nurses expectations in the future, but none on those of PCs. The most interpretable of these results is that Nurses in metropolitan facilities are less likely to expect to remain in the sector for three years than those in rural or regional facilities, and that those in facilities with only high care places (i.e, pure nursing homes ) are more likely to remain. The former effect is almost certainly a product of more limited employment opportunities in nonmetropolitan areas. The latter may be a result of the more technical nursing in high care facilities being more attractive to Nurses. It is worth noting that a number of factors have no effect on workers expectations about remaining in the sector. In particular, those who are higher paid are no more or less likely to expect to remain. This may be partly because the distribution of wages is compressed, especially for PCs, so that the variations that do exist are not large enough to affect employees expectations (see Section 7 below). Secondly, a number of aspects of workplace experiences (such as how much time employees spend in direct caring, whether they are able to spend enough time with each resident, whether they have freedom to decide how to do their job, etc.) have no effect on expectations. As our later analysis of the determinants of job satisfaction indicate, this is essentially because these factors impact on intentions primarily by affecting job satisfaction. Thus, for example, spending more time in direct care work probably does increase the likelihood that employees will expect to remain in the sector. However, this effect occurs primarily by increasing their job satisfaction which in turn affects their expectations. Overall, these results indicate that the expectations of currently employed Nurses and PCs about their future in the aged care industry are affected by their preferences, their experience of the industry s ability to meet those preferences, and their overall labour market opportunities. Employees who have high job satisfaction, feel they have the skills to undertake their jobs and do not feel under strong pressure appear to enjoy their jobs more and are therefore more likely to try to remain in the industry. However, unattractive shifts and being unable to work the hours they would like can -15-

18 negate the positive experience of work, and make employees more likely to expect to leave the industry. Finally, unsurprisingly, some human capital and labour market factors that mean employees have more employment choices are associated with being more likely to expect to leave the industry. It is worth noting, though, that the latter effects are not particularly large or consistent. This suggests that even where employees do have opportunities to leave the sector, they will not do so unless they find the work unsatisfying or unconducive, or they are unable to achieve the working conditions they would like. 4. Labour Supply Current Contract Type The factors that affect whether employees are employed casually or on permanent contracts, and whether they work full-time or part-time, may help in understanding the determinants of labour supply. Working casually and working part-time may be the result of lack of demand for the labour of employees, or the constraints they face in supplying labour. Our analyses consider the impact of a range of variables on these outcomes. The potential determinants fall into three groups. They are: Employees experience of work o The amount of time they have worked for their current employer Employees personal characteristics: o Their sex o Their age o Whether they were born in a non-english speaking country o Whether they live with a partner o Whether they are the main earner in the household o How good their health is o Their care responsibilities at home o Their level (and type for PCs) of education o Whether they are currently studying an aged care qualification The characteristics of the facilities where employees work: o Whether they work in a metropolitan, regional or rural facility. o Whether the facility has only high care places. o The total number of employees in the facility. -16-

19 o The ownership of the facility (not-for-profit, for-profit, or public ownership) Table 4.1 shows the proportion of Nurses and PCs in our sample employed on casual contracts, and who work part-time. Tables 4.2 and 4.3 show the results of our analyses of the determinants of working casually and of working part-time. Overall, our analyses indicate that a small number of factors consistently affect the type of contract under which employees work or whether they work full-time or part-time. However, the majority of factors have no effect on these outcomes. Table 4.1: Proportion of Nurses and PCs who are employed casually and who work full-time Nurses Personal Carers Employed casually 8.6% 17.9% Work full-time ( % 29.2% N 1148/ /1354 Table 4.2: Determinants of whether Nurses are employed casually and work full time Employed casually Work full-time B Exp(B) B Exp(B) Months at current facility -.006** ** Male Age Born non-english speaking country **.561 Live with a partner Main income earner ** Self assessed health (0=good, fair or poor) Very good health.846** Excellent health.911** No. hrs caring for people in own **.994 Years secondary education Years post-secondary education ** Currently studying aged care qual ** Facility location (0=metropolitan) Regional facility **.564 Rural facility High care places only Total no. employees Facility ownership (0=not-for-profit) For-profit facility Publicly owned facility Constant N Nagelkerke R *p.05 **p

20 Table 4.3: Determinants of whether PCs are employed casually and work full time Employed casually Work full-time B Exp(B) B Exp(B) Months at current facility -.008** ** Male Age Born non-english speaking country Live with a partner **.691 Main income earner Self assessed health (0=good, fair or poor) Very good health.447* Excellent health No. hrs caring for people in own **.993 Years secondary education Years post-secondary education Currently studying aged care qual Facility location (0=metropolitan) Regional facility **.686 Rural facility.485* High care places only ** Total no. employees.004** Facility ownership (0=not-for-profit) For-profit facility Publicly owned facility Constant ** N Nagelkerke R *p.05 **p.01 The length of time employees have been working at facilities is an important determinant. For both Nurses and PCs, employees who have been working at facilities for longer are less likely to be on casual contracts, and more likely to be working fulltime. The importance and consistency of this result suggests that casual and part-time employment are often largely results of employer preferences as employers limit their initial contractual commitment to workers while they assess their suitability for the work. Generally, employees human capital, particularly their education, have no effect on the type of contract or hours they work. The exception to this is that Nurses with more secondary and post-secondary education are more likely to be employed full-time. Presumably this is a result of employers preferring better educated Nurses with more human capital. The lack of effect of education on PCs hours of work and on Nurses and PCs likelihood of being employed casually does suggest that the human -18-

21 capital variations in these two workforces have only limited impact on their attractiveness as employees. Whether employees work full-time or part-time is clearly affected by their own income needs and the non-work demands placed on them. Nurses who are the main income earners in their households are more likely to work full-time, and PCs without live-in partners are less likely to be full-time. Spending more time caring for their household members also makes both Nurses and PCs less likely to be employed fulltime. Older Nurses are also less likely to work full-time. The location, size (as measured by the total number of employees), and bed mix of facilities, also have some effects. These are not consistently present, and seem most likely to be due to management practices in facilities. PCs in larger facilities are more likely to be employed casually than those in small facilities, and those in high care only facilities are more likely to be full-time. Both Nurses and PCs in regional facilities are less likely to be full-time than those in metropolitan ones. Overall, it appears that employers preferences and management practices are the overwhelming determinants of whether Nurses and PCs are employed casually rather than on permanent contracts. They also have a major impact on whether the employees are full-time or part-time. At the same time, the needs and availability of employees also affect this outcome. It appears that, even though their availability may be somewhat constrained, the group of employees who work casually (a small minority) or part-time (a large majority) do represent a pool of available labour in the industry, as our previous report suggested. To further investigate this issue, we next examine the factors that make employees willing to work more hours. 5. Labour Supply Desire to Work More Hours Employees make choices about how many hours they work, and the availability of labour can be substantially affected by these choices. Amongst Nurses and PCs in aged care facilities, this is a significant issue since most work part-time. Under these conditions, an understanding of the factors that affect employees desire to work more hours is important for policy makers. Our analysis examines the factors that affect the number of additional hours employees would like to work. It allows for some employees to prefer to work fewer hours than they currently do (i.e., they would -19-

22 prefer to work a negative number of additional hours). Again, we analyse this issue using multivariate models, and, again, we group the factors that may affect willingness to work more time into four groups. Thus, our analyses examine whether the number of additional (or fewer) hours employees would like to work are affected by: Employees employment arrangements and preferences: o Whether they work a normal day shift, an evening or night shift, or another irregular kind of shift (i.e., the analysis compares three groups) o Whether they are employed on a casual or permanent contract o Their hourly wage Employees experience of work o The amount of time they spend directly caring for residents in a typical shift. o Their experience of work (including whether they are able to spend enough time with residents, their experience of skill usage, etc.) o Their job satisfaction o The amount of time they have worked for their current employer Employees personal characteristics: o Their sex o Their age o Whether they were born in a non-english speaking country o Whether they live with a partner o Whether they are the main earner in the household o How good their health is o Their care responsibilities at home o Their level of education o Whether they are currently studying an aged care qualification The characteristics of the facilities where employees work: o Whether they work in a metropolitan, regional or rural facility. o Whether the facility has only high care places. o The total number of employees in the facility o The ownership of the facility (not-for-profit, for-profit, or public ownership) -20-

23 Table 5.1 shows that just under half of PCs and over one-third of Nurses would prefer to work different hours than they currently do. PCs represent a large pool of untapped labour, with 40% preferring to work longer than they currently do, and only 8% preferring to work less. In contrast, about 15% of Nurses would like to work more than they currently do, but over 20% want to work less. Unsurprisingly, interest in working more hours is much more common amongst those who currently work parttime hours (i.e., less than 35 hours per week) than those who currently work full-time. Table 5.2 shows that nearly half of part-time PCs and over 20% of part-time Nurses would prefer more hours. By contrast, only 20% of full-time PCs want more hours, with two-thirds being happy with their current hours, and only 6% of full-time Nurses want to work longer hours with 37% wanting to reduce their hours. Given the concentration of those wanting to work more hours amongst part-time workers, we focus on the factors that affect whether part-time workers would like to work more hours. Table 5.1: Proportion of Nurses and PCs who would prefer to work more and fewer hours per week PCs Nurses 10+ hours less 3.3% 8.8% 1-9 hours less 5.1% 12.7% No change in hours 51.9% 63.4% 1-5 hours more 18.5% 7.0% 6-10 hours more 14.1% 6.2% 11+ hours more 7.1% 1.9% N Table 5.2: Proportion of Nurses and PCs who would prefer to work more and fewer hours per week by whether currently full-time or part-time PCs Nurses Part-time Prefer more hours 47.6% 21.1% Prefer same hours 46.0% 67.9% Prefer fewer hours 6.4% 11.0% Total Full-time Prefer more hours 20.1% 6.3% Prefer same hours 66.6% 56.7% Prefer fewer hours 13.4% 37.0% Total While our analyses of the factors affecting these preferences do account for some of the variation we observe in how many additional hours people would like to work, there remains significant variation unexplained. This is particularly so for PCs. In fact, we able to explain about 7% of the variance in PCs preferences and 14% of that of Nurses (Table 5.3). Although the factors that affect hours preferences are relevant -21-

24 in interpreting the effect of any interventions, it is certainly important to bear in mind that other issues may be significant too. Table 5.3 Determinants of additional hours nurses and PCs currently working part-time would like to work Nurses PCs B Beta B Beta Shift type (0=regular day shift) Regular eve/night shift Irregular shift Months at current facility -.010** -.161** -.012* -.117* Casual employee **.113** Wage per hour.045**.226**.156**.118** Time spent in direct care (0=more than two thirds) Less than a third time direct care Between one third and two thirds time Male 3.853**.173** Age Born non-english speaking country Live with a partner Main income earner Self assessed health (0=good, fair or poor) Very good health 1.566**.155** Excellent health No. hrs caring for people in own household.012*.116* Years secondary education Years post-secondary education Currently studying aged care qual Able to spend enough time with each resident Have the skill I need to do my job Use skills in current job Have freedom to decide how I do my work Do not feel under pressure to work harder Job satisfaction ** -193** Facility location (0=metropolitan) Regional facility Rural facility 1.524*.137* High care places only Total no. employees * -.106* Facility ownership (0=not-for-profit) For-profit facility Publicly owned facility Constant R N *p.05 **p

25 Our results indicate that a range of factors across all major features of Nurses lives affect whether they wish to work more hours. It appears that part-time Nurses prefer to work more hours if: Employees employment arrangements and preferences: o Their hourly wage is higher Employees experience of work o They have been working at their current facility for a shorter period Employees personal characteristics: o They are male o They have very good health o They spend more time in care responsibilities at home The characteristics of the facilities where employees work: o They work in a rural facility These results suggest that part-time Nurses willingness to supply additional labour is partly a function of how facilities are operated: presumably longer serving employees are less likely to want more hours because employers give longer serving, trusted employees the hours they want; and higher wages act as an incentive to work more. In addition labour market factors play a part: the greater desire of Nurses in rural facilities to work more is probably due to the generally more limited availability of work in rural areas. It also appears that workers with greater personal capacity (better health) and with greater responsibilities (having more care responsibilities at home) want more work. Finally, taking account of all the other factors, men are more likely than women to want to work more hours, possibly because of societal expectations. Whether part-time PCs prefer to work more hours is affected by a somewhat more limited range of variables. They prefer to increase their hours if: Employees employment arrangements and preferences: o Their hourly wage is higher o They are employed on a casual contract Employees experience of work o They have been working at their current facility for a shorter period -23-

26 o They have lower job satisfaction The characteristics of the facilities where employees work: o They are employed in a smaller facility Like part-time Nurses, it appears that part-time PCs are affected by employers tendency to give longer serving employees the hours they desire, and that they are attracted to work more by higher wages. Casual employees also appear to experience a greater gap between desired and actual hours than permanent ones. The association between lower job satisfaction and desiring more hours is, presumably, traceable to the fact that a significant gap between actual and desired hours reduces job satisfaction. Overall, as we noted above, the above factors explain only a small proportion of the variation in additional hours that part-time Nurses and PCs want to work. In the case of PCs, the likely explanation is that underemployment is so general that no particular factors are capable of distinguishing those who wish to work more from those who don t. In the case of Nurses, the picture is almost opposite: nearly 80% of part-time Nurses want to work the same amount they currently do, or less. Thus, the small proportion who want to work more are not sharply distinguishable from this large majority. 6. What Determines Job Satisfaction? Earlier analyses in this report clearly indicate that job satisfaction is associated with important labour supply intentions and expectations amongst direct care workers in the aged care industry. In particular, job satisfaction has a very significant impact on employees expectations about remaining in the industry, with those with higher job satisfaction much more likely to expect to remain. Our measure of job satisfaction is a scale whose scores range from 0 (completely dissatisfied with all aspects of the job) to 60 (completely satisfied with all aspects of the job). 1 This scale results from employees responses to 6 questions about job satisfaction covering pay, job security, the work itself, hours of work, flexibility to balance work and non-work activities, and overall job satisfaction. Most workers are fairly satisfied with their jobs, and aged care employees are no different in this respect (for a more detailed comparison of 1 This scale has appropriate reliability (Alpha =0.78) with item-total correlations being above

27 aged care workers job satisfaction with that of all Australian female employees, see Healy and Moskos 2005). Table 6.1 shows the proportion of respondents to our survey who rated their job satisfaction in each third of our scale. Clearly, very few are highly dissatisfied with their jobs (only 4% of PCs and 7% of Nurses were in the bottom third of our scale, which would result if they said they were dissatisfied on most aspects of their jobs). However, there is still considerable variation in job satisfaction, with over 40% of both groups giving responses that place them in the middle third of our scale and about half placing themselves in the top third. Table 6.1: Job satisfaction amongst Nurses and PCs Job satisfaction PCs Nurses % 6.9% % 42.1% % 51.0% Total Job satisfaction is likely to result from a range of factors, including employment arrangements and preferences, work experience, personal characteristics, and the characteristics of workplaces. As in previous analyses, we examine the effects of a range of variables that fall into these four broad categories: Employees employment arrangements and preferences: o Whether they work a normal day shift, an evening or night shift, or another irregular kind of shift (i.e., the analysis compares three groups) o Whether they would prefer to work a different kind of shift o Whether they would prefer to work more, fewer or the same number of hours as they currently do o Whether they are employed on a casual or permanent contract o Their hourly wage Employees experience of work o The amount of time they spend directly caring for residents in a typical shift o Their experience of work (including whether they are able to spend enough time with residents, their experience of skill usage, etc.) o The amount of time they have worked for their current employer Employees personal characteristics: o Their sex -25-

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