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Challenges and opportunities in home and residential care in 2025 

Challenges and opportunities

The start of a new year brings a new reality for home and residential care providers.  

With exponential growth in the sector, many are feeling the weight of equally exponential challenges. These pressures are further compounded by the rollout of new government programs, which creates a complex and, at times, unsettling environment. 

Yet, as the saying goes, “In every challenge lives a greater opportunity.” While the road ahead may seem daunting, it is also filled with potential for those prepared to adapt and innovate.  

We spoke with Annette Hili, Managing Director of AlayaCare ANZ, and Adrian Schauer, CEO and Founder of AlayaCare, who shared their insights into the key challenges you may face as a healthcare provider—and, even more importantly, the opportunities that can be embraced in the year ahead. 

Labour shortages 

The challenge 

Labour shortages remain one of the most pressing challenges facing the aged care sector.  

Each year, an estimated 65,000 workers leave the industry, and the Committee for Economic Development of Australia (CEDA) warns of an impending shortfall of 30,000 to 35,000 direct care workers by 2030.  

This workforce gap, exacerbated by fluctuating government policies and evolving consumer demands, places immense pressure on those striving to maintain high-quality care within homes and communities. 

While this issue is not new, it is rapidly intensifying due to Australia’s ageing population. Annette highlights the strain on the sector: “Just even finding the clinicians we need to meet the Registered Nursing (RN) hours that are required across residential aged care is a challenge. Finding enough support workers to deliver the actual services is a challenge.” 

So, with these challenges at hand, how can organisations prepare to get ahead? 

The opportunity 

Amidst this workforce crisis lies an opportunity to leverage technology to address inefficiencies and improve staff satisfaction. Annette explains, “Technology can save time so that [your] time is spent out there in delivering the care.” 

By integrating innovative solutions, organisations can tackle some of the key contributors to high staff attrition, including inconsistent hours, poor scheduling, and delays between hiring and the first assigned shift. Additionally, technology can help alleviate the burden of manual administrative tasks, enabling staff to focus more on delivering care. 

These technological solutions could include: 

  • Scheduling automation to optimise shifts and reduce inconsistencies. 
  • Remotely accessible clinical notes and documentation to streamline workflows. 
  • AI-powered tools to summarise complex information quickly. 
  • Virtual administrative assistants to handle repetitive tasks. 

Of course, people remain at the core of these care services, but these technological advances can free up valuable time for staff to concentrate on what truly matters: providing quality care to clients.  

By embracing technology, you can not only address workforce challenges, but also set your organisation up for long-term success in delivering better outcomes for clients and employees alike. 

Rising costs 

The challenge: 

“Increasingly, we’re being told about the difficulties in running a business as operational costs put pressure on providers’ bottom lines,” explains Adrian.  

According to data from the Australian Bureau of Statistics (ABS), 57% of all businesses experienced increases in the cost of doing business in 2022.  

Fuel and energy costs were the most frequently cited drivers of these increases, with 83% of businesses attributing their rising expenses to energy costs. Additionally, 82% pointed to the increasing cost of products and services required to operate. 

These external cost pressures, particularly those related to energy and essential supplies, are likely mainly outside your control. This raises a critical question: how can you mitigate these challenges and maintain sustainable operations? 

The opportunity: 

While you cannot influence external expenses such as energy prices, there are opportunities to manage operational costs through improved efficiency and strategic use of technology. By optimising workflows and implementing automation, you can streamline processes and reduce waste which can offset rising expenses. 

Adrian highlights technology’s role in this space: “New technology brings opportunities to drive efficiencies and reduce manual processes, which can have a significant impact on operational costs.” 

Practical steps for addressing rising costs include: 

  • Implementing systems that provide clear visibility into incoming and outgoing cash flow. 
  • Using reporting tools to track and manage expenses.  
  • Automating repetitive tasks to improve efficiency and streamline workflows. 

With these measures, you can reduce the financial strain of rising costs while focusing resources on delivering high-quality care.  

By leveraging innovative technologies and maintaining oversight of operational efficiency, organisations can position themselves for long-term resilience in an increasingly challenging economic environment. 

Policy and regulation changes 

The challenge: 

The aged care sector is no stranger to regulatory shifts, and the upcoming introduction of the Support at Home program and the new Aged Care Act only adds to the complexity.  

While these changes aim to improve the sector, they also place significant demands on your organisation to adjust its policies, processes, and operations to remain compliant. 

“We’re in a highly regulated space, and there’s a lot of uncertainty around where the government’s going with their funding programs and other regulation. It’s a very challenging time to be in the space,” explains Adrian. 

This uncertainty is further compounded by broader political shifts, both locally and globally, which contribute to a sense of instability for many providers. With these changes, organisations must find new ways to navigate the evolving landscape while maintaining high-quality care and financial sustainability. 

The opportunity: 

Despite these challenges, regulatory shifts present an opportunity for you to build resilience within your organisation by focusing on agility and adaptability. Adrian emphasises the importance of staying ahead of the curve: 

“We have to be nimble, we have to be agile, and we have to be ready to deliver on the solutions the market needs as it evolves.” 

Building an adaptable business starts with leadership and extends throughout the organisation. Practical strategies include: 

  • Empower leadership to adopt agile decision-making to make faster, more informed decisions. 
  • Invest in cloud-based infrastructure to support flexibility, scalability and adaptability. 
  • Implement part-time or casual workforce arrangements to meet changing demands with a flexible workforce. 

Adopting an adaptable mindset at the management level can create a ripple effect, shaping a business culture that is prepared to respond to ongoing changes. By fostering flexibility and innovation, you can turn regulatory uncertainty into an opportunity to lead the sector with proactive and client-centred solutions. 

New government programs 

The challenge 

The announcement of the Support at Home program and the introduction of a new Aged Care Act—the first overhaul in 27 years—are set to bring major changes to the aged care landscape. 

“The regulatory changes will continue to be a challenge,” explains Annette. “Not because they’re not needed, particularly things like a brand new Aged Care Act after 27 years which we desperately need—these are all good things.” 

While these changes are necessary and beneficial in the long term, they may require you to overhaul existing processes and ways of working to ensure compliance.  

Adjusting to such sweeping reforms can be daunting, but there is still time to prepare and adapt. As Annette highlights, “Big changes like that mean you need to overhaul the way that you’re doing things. You’ve got to look at your policies and processes.” 

The opportunity 

The transition period brought about by the new Aged Care Act is an ideal time for your organisation to identify and implement efficiencies that can save time and resources, enabling you to focus on what matters most—your clients and core business objectives. 

Strategies to leverage these opportunities include: 

  • Preparing for unexpected challenges and regulatory shifts with flexible contingency plans. 
  • Engaging a healthcare policy expert to gain clarity on compliance requirements and industry best practices. 
  • Reviewing financial resilience to ensure your organisation can withstand the financial impact of these regulatory changes. 
  • Enhancing operational efficiency to optimise workflows and processes to improve service delivery. 
  • Creating a communications plan for clients that keeps them informed and reassured about the new changes and how they will be supported. 

By taking proactive steps to address these challenges, you can turn regulatory reform into a strategic advantage. These adjustments not only prepare organisations for compliance, but also position you for greater efficiency and client satisfaction in a rapidly evolving sector. 

Changing client expectations 

The challenge 

Person-centred care has become a cornerstone of the healthcare sector, championed by policymakers and providers alike. While there’s no doubt of its importance, the shift towards this approach introduces complexities, particularly around compliance with evolving regulatory requirements. 

“The principle behind person-centred care is a no-brainer,” says Annette. “But, it does mean that you may need to reconsider your processes so that you remain compliant with the shifting expectations on what this looks like. 

As both clients and governments increasingly expect care to be designed with the client in the driver’s seat, organisations must adapt quickly to meet these demands. This may involve revisiting and restructuring processes to ensure they align with person-centred care principles while maintaining compliance. 

The opportunity 

The widespread support for person-centred care also creates significant opportunities for you to differentiate your organisation from other providers. By going beyond compliance and genuinely embedding person-centred care into services, organisations can stand out in a competitive market. 

“This is your opportunity to distinguish yourself. Person-centred care will only become more important over time, and any organisations that prioritise programs, processes and initiatives that highlight this will thrive,” says Annette. 

Practical steps to embrace this opportunity include: 

  • Involving clients in shaping person-centred care strategies to foster trust and alignment with their needs. 
  • Using tools like family portals to facilitate communication between clients, families, and care workers, ensuring continuous improvement. 
  • Supporting clients with health literacy by providing resources on navigating government changes. 
  • Making spaces more inclusive and accessible—such as using Aboriginal and Torres Strait Islander-designed elements, clear signage, or sensory rooms—to demonstrate a commitment to meeting diverse client needs. 

By prioritising these initiatives, you can not only meet, but exceed client and government expectations.  

This proactive approach will strengthen your reputation and position you for long-term success in delivering safe, high-quality, and personalised care. 

If you want to learn about how technology may help you embrace opportunities in the new year, reach out to our sales team to see what options may be right for your organisation. 

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