Aged care quality standards and workforce leadership: what providers need to know in 2026

On 1 November 2025, the aged care sector entered a new era.

The Strengthened Aged Care Quality Standards came into effect alongside the new rights-based Aged Care Act — representing the most significant legislative transformation in the sector's history. What was once a compliance framework has become a quality and accountability system with genuine teeth. Providers are no longer simply required to have policies. They are required to demonstrate, with evidence, that their workforce has the skills, knowledge, and culture to deliver safe, person-centred care.

For aged care CEOs, Directors of Nursing, and HR leaders, the practical implication is clear: workforce capability is no longer an operational concern. It is a quality and governance requirement.

The Royal Commission into Aged Care Quality and Safety — which reported in 2021 — set all of this in motion. Its findings were confronting: workforce shortages, structural underpayment, inadequate training, and leadership gaps that were putting older Australians at risk. The reform agenda that followed was extensive and necessary. But reform doesn't resolve a workforce challenge overnight.

2026 is the year those reforms land most heavily on providers — in budget pressures, staffing requirements, compliance obligations, and the urgent need for capable, knowledgeable leaders at every level of the organisation.

Having spent more than 20 years recruiting for aged care and purpose-driven organisations across Australia, I've watched this story unfold in real time. I see it in the roles that take twice as long to fill as they did five years ago. I see it in the organisations losing good people to competitors — or to the NDIS sector — before they even see it coming. And increasingly, I see it in the providers who are scrambling to meet Quality Standards requirements with a leadership team that wasn't built for this environment.

This article examines the Strengthened Aged Care Quality Standards, how they reshape workforce requirements, and the five most significant workforce challenges providers face in meeting them.

The Strengthened Aged Care Quality Standards: what changed

The Strengthened Aged Care Quality Standards consolidate what was previously eight standards into seven. The restructure isn't cosmetic — it reflects a fundamental shift in how the regulator expects providers to demonstrate quality.

The seven standards are:

The person — rights, dignity, and choice
The organisation — governance, risk management, workforce capability, and continuous improvement
The care and services — person-centred planning and delivery
The environment — safe, appropriate physical environments
Clinical care — safe, evidence-based clinical practice
Food and nutrition — safe and adequate nutrition
The residential community — connection, belonging, and quality of life for people in residential care

For workforce and leadership purposes, Standard 5 (Clinical Care) and Standard 2 (The Organisation) — which sets the workforce and human-resource-management requirements — carry the greatest operational weight.

Standard 5 sets out requirements for clinical governance — the systems, processes, and accountabilities that ensure clinical care is safe and evidence-based. Providers must demonstrate active clinical oversight, not just documented policies. This places significant responsibility on Directors of Nursing, clinical managers, and care coordinators to lead governance in practice, not just on paper.

The workforce requirements under Standard 2 are the ones most providers will feel most acutely. They require providers to demonstrate that their workforce is appropriately skilled, qualified, and sufficient in number to deliver the care they're funded to provide. The Aged Care Quality and Safety Commission has flagged that common failures include expired clinical credentials, training records that don't align with service delivery, and no documented assessment of staff competency against role requirements. The bar is evidential. Aspirational workforce policies don't satisfy it.

The Aged Care Code of Conduct

The new Aged Care Act 2024 introduces a legislated code of conduct applying to all aged care workers and providers. This is distinct from the Quality Standards — it establishes behavioural obligations directly on individual workers, not just on organisations. Workers must treat older people with dignity and respect, act with honesty and transparency, and promptly report concerns about safety or quality. Providers are required to have systems in place to support compliance with the code and to act on breaches.

For HR leaders and people managers, the code of conduct has practical implications for recruitment screening, induction, performance management, and grievance handling. Embedding the code into your workforce practice — not just acknowledging it in a policy — is now an expectation.

Clinical governance as a workforce function

The Aged Care Quality and Safety Commission (ACQSC) has been explicit: clinical governance is not just a responsibility of the clinical team. It requires board-level accountability, executive leadership, and operational systems that connect workforce capability to quality outcomes. Providers without a clear clinical governance framework — and without the leadership capability to operate it — are exposed.

This is a significant shift. Five years ago, clinical governance was largely the domain of the Director of Nursing. Today, it requires the CEO to understand it, the board to oversee it, and quality and compliance staff to operate it day to day.

The state of the aged care workforce in 2026

Australia's aged care workforce is large — approximately 366,000 workers in residential and home care settings — and growing. But it's not growing fast enough.

The Department of Health, Disability and Ageing forecasts a shortage of more than 17,500 full-time equivalent nurses in aged care by 2035. The Committee for Economic Development of Australia (CEDA) has warned that unless urgent action is taken, Australia faces a shortfall of at least 110,000 direct aged-care workers within the next decade. Right now, CEDA estimates the sector needs at least 17,000 more direct aged-care workers each year, with many providers reporting difficulty filling key roles — particularly registered nurses and personal care workers.

Meanwhile, demand is accelerating. The number of Australians aged 70 and over is projected to increase by around 2.3 million (67.8%) between 2024 and 2044. Residential care demand is forecast to reach approximately 410,000 places by 2044 — up from roughly 224,000 today.

The workforce pipeline isn't keeping pace with any of this.

Against this backdrop, the sector has been asked to implement some of the most significant structural reform in its history: a new rights-based Aged Care Act (effective November 2025), strengthened Quality Standards, new care minute requirements, 24/7 registered nurse coverage mandates, and a fundamentally restructured funding model. Each of these is necessary and welcome. Each also places new demands on a workforce that is already under strain.

Here's where the pressure is landing most acutely in 2026.

Challenge 1 — Staff shortages and competition for talent

The aged care sector does not recruit in isolation. It competes for workers — particularly nurses, allied health professionals, and community support workers — against hospitals, the NDIS, primary care, and increasingly, the disability services sector.

That competition has intensified sharply. The NDIS Review estimated the sector would require an additional 128,000 workers by mid-2025 to meet expected participant growth. The NDIS now supports over 739,000 Australians, and is projected to need substantial additional workforce growth in the years ahead. Most of those workers share qualifications and experience with aged care staff. The pool they're being recruited from is the same pool.

The result is wage inflation and poaching at scale. NDIS providers — operating under more flexible funding arrangements than many aged care operators — can often move faster, pay more, and offer conditions that are harder to match. Hospital systems offer structured career pathways, rostering predictability, and enterprise agreement conditions that community and residential aged care struggle to replicate.

Regional and remote providers face an even steeper gradient. Workforce shortages are geographically concentrated: metropolitan areas have more candidates and more competition; regional areas have fewer candidates, fewer incentives, and fewer pathways to attract workers who have other options.

The organisations that are winning this competition aren't simply paying more. They're building compelling employment propositions — career development, culture, flexibility, and leadership quality — that give candidates a reason to choose aged care over the alternatives.

Challenge 2 — Pay and conditions

The pay gap between aged care workers and their counterparts in other care settings has been a structural problem for decades — and the Royal Commission made clear it was not sustainable.

The Fair Work Commission's aged care work value case delivered historic change. An initial 15% pay rise for registered nurses, enrolled nurses, personal care workers, and home care workers took effect on 30 June 2023. Stage 3 of the work value case followed, with further increases applied from 1 January 2025 and October 2025. Home care workers covered by the SCHADS Award have seen cumulative increases of between 13.3% and 21.1% (inclusive of the original 15% interim award). Approximately 340,000 workers are covered by the new wage rates.

This is genuinely significant, and it's the right outcome. Workers in aged care have been structurally underpaid for decades relative to the complexity and emotional weight of their roles.

But the financial pressures on providers are real too. The StewartBrown Aged Care Financial Performance Survey (June 2025) found that direct care labour costs — covering registered nurses, enrolled nurses, and personal care workers — averaged $227.70 per bed per day, an increase of 11.05% from FY24. That's a significant cost increase on top of already tight operating margins. Many providers, particularly smaller operators and those in regional areas, are absorbing these increases with government funding increases that don't fully close the gap.

The pay story in 2026 is therefore nuanced. Wages have risen substantially and correctly. But they still sit below hospital sector equivalents for clinical roles — which means the workforce attraction gap hasn't fully closed, even as operating costs have increased. Providers need to compete on total remuneration, which includes salary packaging opportunities, as well as on culture and career development, to make the numbers work on both sides.

Challenge 3 — Retention and burnout

Attracting workers is only half the equation. Keeping them is where many aged care providers are losing ground.

Turnover rates in the sector are striking. Turnover across key roles commonly exceeds 25–30% — compared to an overall job mobility rate across the Australian workforce of around 8%. A significant share of aged care workers report considering leaving the sector.

Burnout is a leading driver. Research points to high rates of burnout and psychological distress among aged care workers, reflecting the emotional weight of caring for people at the end of their lives — compounded by staff shortages that mean every vacancy creates additional pressure on those who remain.

The dynamics here are self-reinforcing and damaging. A vacancy creates extra workload for remaining staff. Extra workload accelerates burnout. Burnout drives more departures. More departures create more vacancies. Providers can find themselves in a cycle that's genuinely difficult to break without deliberate structural intervention.

The evidence on what breaks the cycle points clearly in one direction: workplace culture, leadership quality, and genuine investment in worker wellbeing. Project Thrive, a workforce resilience initiative, delivered training to more than 850 aged care workers and 114 managers, improving mental health, job satisfaction, and organisational commitment while reducing turnover. Providers who invest in psychological safety, visible leadership, career development pathways, and flexible rostering consistently outperform their peers on retention metrics.

Working with aged care providers across Melbourne and nationally, I've seen how much the quality of leadership determines workforce outcomes — at every level of the organisation. If you're facing retention challenges, a conversation about your leadership team structure might be the most useful place to start.

Book a consultation with Gab Patterson | 0416 170 100

Challenge 4 — Meeting the Quality Standards: workforce capability requirements

The Strengthened Aged Care Quality Standards don't just describe what good care looks like. They specify the workforce capability required to deliver it — and the evidence providers must produce to demonstrate that capability exists.

Standard 2 (The Organisation), through its workforce and human-resource-management requirements, is the most direct expression of this. It requires providers to demonstrate that their workforce is skilled, qualified, and sufficient. Not on paper — in practice. The ACQSC has been clear: common failures include missing police checks, expired clinical credentials, training records that don't align with service delivery, and no documented assessment of staff competency against role requirements. Providers who are treating these workforce requirements as a documentation exercise are misreading the standard.

Standard 5 (Clinical Care) requires providers to demonstrate active clinical governance — not just governance policies. This means your clinical governance framework needs people who can operate it: Directors of Nursing, clinical managers, and care coordinators with the skills and authority to act. The clinical manager role in aged care has never been more important or more scrutinised.

Beyond the Standards themselves, the broader regulatory environment has created real operational constraints that intersect with workforce. The AN-ACC funding model sets the price per resident per day at $295.64 from 1 October 2025, with Quarterly Financial Reporting now feeding directly into Star Ratings — a visible public accountability mechanism affecting occupancy and consumer choice. Mandatory care minutes and 24/7 registered nurse requirements create a staffing floor that makes workforce shortages operationally acute, not just uncomfortable. When you must maintain a registered nurse on-site around the clock, a single vacancy becomes a compliance risk, not just an inconvenience.

The cumulative effect is that quality and compliance capability has become a workforce function in its own right — not a side responsibility of the clinical team. Quality officers, compliance specialists, and clinical governance leads are now mission-critical roles. Providers who treat these as back-office positions, rather than as leadership investments, are building exposure into their ACQSC audit risk.

Challenge 5 — Leadership pipeline

Here's the challenge that gets talked about least, but matters most: the aged care sector is facing a leadership succession crisis that will define the next decade.

Many of the sector's most experienced CEOs, Directors of Nursing, and Facility Managers built their careers before the Royal Commission, before AN-ACC, before the new Aged Care Act. Some are approaching retirement. The knowledge they carry — of clinical governance, of community relationships, of how to lead a workforce through regulatory change — is not easily replaced. And with Standard 5 requiring active clinical governance and Standard 2 requiring evidenced workforce capability, the leadership gap has become a compliance risk, not just an organisational development concern.

At the same time, the leadership pipeline is under-developed. Research identifies a consistent gap in the preparation of clinical and operational middle managers — the team leaders, care coordinators, and clinical managers who are theoretically the next generation of senior leaders. Succession planning in aged care has historically been informal and inconsistent. Providers who have invested in deliberate leadership development are ahead of those who haven't.

The challenge is compounded at board level. Aged care governance has grown enormously more complex — financial accountability through AN-ACC and QFR, clinical governance under the Strengthened Quality Standards, consumer rights frameworks under the new Aged Care Act 2024. Boards need directors with genuine sector knowledge, and the pool of people with that combination of governance skills and aged care experience is limited.

Providers who wait until a senior leader signals their intention to leave before beginning succession planning are already behind. The best organisations in the sector build leadership capacity as an ongoing practice — not a crisis response.

Solutions — what progressive providers are doing differently

Despite the scale of these challenges, there are aged care providers thriving in this environment. The patterns they share are consistent:

They treat recruitment as strategy, not administration. The best providers don't post a job ad and wait. They build relationships with specialist recruiters, maintain candidate pipelines, and approach executive search with the same rigour they'd apply to any other significant business decision.

They invest in leadership quality as a retention multiplier. Worker satisfaction in aged care is closely correlated with the quality of direct management. Providers who invest in the development of middle managers — team leaders, care coordinators, lifestyle officers — see better retention outcomes across the whole facility.

They build flexible working models that match how workers want to work. Rigid rostering is a significant driver of exit. Providers who have redesigned shift structures to accommodate the reality that many care workers balance caring responsibilities, study, and multiple part-time roles see meaningfully lower turnover. Workers drawn to aged care by purpose and values are more likely to stay when their employer demonstrates those values in how they're treated day to day.

They present total remuneration honestly, including salary packaging. The ability for aged care workers to salary package living expenses and meal entertainment under NFP provisions is a genuine financial advantage — but many providers communicate it poorly. Those who explain the real value clearly and consistently use it as an effective recruitment and retention lever.

They take succession planning seriously. Leading providers identify emerging leaders 3–5 years before a gap is anticipated, create development pathways with intention, and don't treat senior roles as emergencies to be solved under time pressure.

They partner with specialist recruiters who understand the sector. Not just for sourcing candidates — but for market intelligence, salary benchmarking, and honest advice about what the talent market actually looks like right now.

The role of specialist recruitment in solving workforce challenges

There's a conversation I have regularly with aged care CEOs and HR leads that goes something like this: "We've tried advertising. We've tried a couple of agencies. We're still not getting the right people."

The issue, usually, isn't the advertising. It's the approach.

Filling an executive or management role in aged care requires sector knowledge that generalist recruiters don't have. The ability to assess whether a candidate genuinely understands clinical governance. The networks to know who's available and who's looking — before they update their LinkedIn profile. The judgement to know when a candidate's commercial background is an asset in an aged care context, and when it isn't.

At Patterson Recruitment, every search is personally led. I've spent more than 20 years building networks across aged care, NFP, healthcare, and disability services. I know the talent market. I understand the regulatory environment. And I treat every placement as the beginning of a relationship — with both the organisation and the person placed — not the end of a transaction.

For aged care providers navigating workforce challenges, specialist recruitment isn't a cost. It's an investment in getting the right leadership in place — which is the foundation everything else is built on.

If you're facing a critical vacancy, planning an executive search, or simply thinking through your talent strategy for the year ahead, I'd welcome a conversation.

Book a consultation with Gab Patterson | 0416 170 100

FAQ

How many aged care workers does Australia need?

CEDA estimates Australia needs at least 17,000 more direct aged-care workers each year, with the cumulative shortfall projected to exceed 110,000 over the next decade if structural workforce investment doesn't accelerate. Many providers report difficulty filling key roles.

What is causing the aged care worker shortage?

The shortage has multiple intersecting causes: an ageing population creating rapidly growing demand; competition for care workers from the NDIS and hospital sectors; historically low wages (now being addressed through Fair Work Commission decisions); high burnout and turnover rates; and an under-developed leadership pipeline that hasn't kept pace with growth.

How has the 15% pay rise affected aged care workforce recruitment?

The pay rise has improved attraction outcomes, particularly for entry-level and personal care roles. However, registered nurse wages still sit below hospital sector equivalents, which means recruitment competition for clinical roles remains intense. The pay rise has also significantly increased provider operating costs, requiring careful workforce planning to manage financially.

What are the Strengthened Aged Care Quality Standards, and how do they affect workforce?

The Strengthened Aged Care Quality Standards commenced on 1 November 2025 under the new Aged Care Act. Consolidated from eight standards to seven, they include Standard 5 (Clinical Care) and Standard 2 (The Organisation) as the primary workforce-facing standards. Standard 2 requires providers to demonstrate — with evidence — that their workforce has the skills, knowledge, and qualifications to deliver safe care. This has elevated the importance of compliance roles, training documentation, and workforce planning as a governance function.

What is the aged care code of conduct?

The Aged Care Code of Conduct is a legislated set of behavioural obligations introduced under the Aged Care Act 2024. It applies to all aged care workers and providers — not just organisations. Workers are required to act with dignity, honesty, and respect, and to promptly report safety concerns. Providers must have systems in place to support compliance with the code and to act on breaches. For HR leaders, this has direct implications for recruitment screening, induction processes, and performance management.

How do the strengthened standards change workforce requirements?

Standard 2 (The Organisation) requires providers to demonstrate that their workforce is appropriately skilled, qualified, and sufficient in number — with evidence. The Aged Care Quality and Safety Commission has identified common failures including expired clinical credentials, training records that don't match service delivery, and missing competency assessments. Providers need robust workforce management systems, training records, and clinical supervision frameworks to satisfy the standard. This has made quality officers, compliance specialists, and clinical governance roles strategically important, not just administrative.

How can aged care providers improve workforce retention?

The evidence consistently points to four drivers: leadership quality (particularly direct manager capability), flexible rostering that accommodates workers' other commitments, genuine investment in career development and training, and a culture of psychological safety where workers feel supported and heard. Salary packaging should also be communicated clearly as part of total remuneration.

What roles does Patterson Recruitment place in aged care?

Patterson Recruitment places executive and management roles across the aged care sector, including CEOs and Executive Directors, Facility Managers, Directors of Clinical Services, Quality and Compliance Managers, HR and People & Culture leaders, Operations Managers, and Roster Coordinators and specialist contract roles. All searches are personally led by Gab Patterson.