A shift in the labour market over the next 12 months could see strong employment growth in the nursing home sector, according to business monitors, IBISWorld.
The firm predicts that Australia’s unemployment rate will rise to 6.5 per cent by the end of the year, giving a boost to employers’ bargaining power.
The global financial crisis could also see employees shift to essential service sectors such as health and aged care which are guaranteed to have ongoing strong demand because of the ageing population.
“In the health sector that is going to mean a transfer of employees from a lot of discretionary services such as acupuncture and massage to places like nursing homes,” said IBISWorld senior analyst, Richard Jeremiah.
“There is the potential that people in these more discretionary markets will lose their jobs or experience pay cuts so you might see people like physios or podiatrists, starting to focus more on doing rounds in nursing homes.”
Overall IBISWorld estimates that 3,800 new places will be created this year in the residential aged care sector.
One of the reasons for this confidence is the diversity of job types on offer in nursing homes.
In particular, Mr Jeremiah said increasing pressure on small business could create opportunities for nursing homes seeking to employ experienced business administrators.
“Although interest rates are falling, banks are still lending at high rates so in small business a lot of people will probably be made redundant and there is no doubt that they will be looking for work,” he said.
“The nursing home sector is potentially in a good position to attract these business administrators and hopefully they will be able to improve the profitability of some of those homes that are struggling.”
However, Mr Jeremiah stressed that these predictions are contingent on the Commonwealth Government maintaining its commitment to provide adequate funding and bed numbers to support this growth.
According to Aged Care Association Australia CEO, Rod Young, this is a major concern as current funding arrangements are not conducive to growth.
“The message from the Grant Thornton report last year and Stewart Brown’s [recently released] September benchmarking analysis indicate that the industry is struggling to meet existing costs,” he said.
“And if you cannot fund existing operations or if you find your margins are very short, that makes growth very difficult.”
Mr Young said one of biggest problems for the sector was the fact that no real effort has been made to calculate the actual costs of care for over two decades.
“You have to go back, before the  Hogan report and the 1997 reform, to the 1980s to find the last time someone did an in-depth analysis of the costs of providing aged care,” he said.
Looking at the broader seniors living market, Mr Jeremiah expects that services driven by consumer spending, such as retirement living and private community care, will probably experience a drop in demand this year.
“On the one hand we have the demographic trend of the ageing population pushing demand in these areas,” he said.
“But at the same time, anything that is privately funded by the individual may take a bit of a hit because most people, particularly retirees and pensioners, have taken a wealth hit.”