Solution

Q3. Analyse one external factor that is currently having a negative impact on the residential
care industry and one external factor that is currently having a positive impact on the
residential care industry. (AC 1.3)

External factors of the environment play a significant role in the residential care sector in the UK that affects the deliverance of service, financial viability as well as labour sustainability (CIPD, 2017). We may examine them through PESTLE framework. There are two external factors that are observed negatively and positively today.

Negative Factor – Rising Operational Costs
One of the key external factors that have adversely impacted the residential care industry is the rise of the operating costs especially the utilities and wages. Care homes face a massive cost increase in inflation and energy price rises, which have made profits slimmer and put providers under a cash crunch (Fleron et al., 2022). Meanwhile, the production costs have increased since there are nationwide wage increment at the minimum level and competitive labour market. This impacts negatively on profitability and homes find it difficult to invest into training, development and quality improvement programs. This also affects recruitment because a lot of care homes cannot match with the salary being offered in other industries. We can observe at Calmere House how increasing expenses caused using agency employees that potentially continues to decrease the quality and stability of services because of a lack of acquaintance with residents or organisational principles.

Positive Factor – Technological Innovation in Care Delivery
On the other hand, the sector is benefiting positively through the adaption of assistive and digital technologies. The operating efficiency and safety of residents

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