I have been thinking about a hypothesis that has emerged from some of the Home Care work I have been doing.
Is there an optimal size for a Home Care provider? Or perhaps the better question is: at what point does scale stop creating efficiency and start creating complexity?
It is a question I keep returning to, because the answer is not obvious, and most of the conventional wisdom in this sector, and in services generally, assumes growth is close to an unqualified good. More customers, more revenue, more resilience. Home Care does not seem to work that simply.
I have had the opportunity to look closely at the economics and operating models of providers of very different sizes, and smaller providers have an interesting advantage. When operating within a relatively contained footprint, they can centralise functions such as customer acquisition, onboarding, administration and customer support, while maintaining reasonable proximity between their workforce and customers.
A smaller provider can often hold the whole business in its head. One roster, one patch of geography, a team who recognise each other's voices on the phone. That proximity isn't just pleasant, it is operationally useful. Problems get caught early because the person catching them is close enough to the work to see them.
As organisations grow, however, Home Care starts to look increasingly like a logistics business. You are constantly matching customer demand, workforce availability, skills and qualifications, geography, service times, continuity preferences, and changing customer needs.
That's a genuinely harder problem than it sounds. Two customers in the same suburb might need visits at the same hour with different skill requirements. A worker who has built trust with a client over eighteen months moves house, or the client does, and continuity, one of the things families value most, must be rebuilt from nothing. None of this shows up as a strategic failure. It shows up as a dozen small scheduling decisions a week, and it is the accumulation of those decisions that either holds a business together or quietly wears it down.
Growth therefore doesn't necessarily create efficiency. If customer numbers increase without sufficient geographic density, workforce utilisation can fall. Travel increases. Rostering becomes harder. Gaps appear between services. Coordination effort increases. Economics can start moving in the wrong direction.
This is the part that catches a lot of providers by surprise, because the instinct is that scale should always dilute fixed costs. In a lot of businesses, it does. In Home Care, geography is a cost that doesn't dilute automatically. A hundred customers spread across a wide area can cost more per visit than fifty customers concentrated in one, even though the second number looks like slower growth on a slide.
One response I have seen is to decentralise teams and put more coordination closer to local operations. That can improve responsiveness, and potentially CX and EX, but it can also duplicate roles, processes and management layers, increasing the cost to serve.
So there seems to be an interesting tension: centralisation creates efficiency. Localisation creates responsiveness. Home Care needs both.
"Centralisation creates efficiency. Localisation creates responsiveness.
Home Care needs both."
Which makes me wonder whether customer numbers are the wrong measure of growth. Perhaps the more important measures are customer density, package utilisation, workforce utilisation, and the operating model required to support them.
A provider that has quietly grown into the right geography, with high utilisation and low travel time, might be doing better work with fewer headline numbers to show for it than a provider chasing customer count across a wider map. If that's true, a fair amount of the sector may be optimising for the wrong number.
That leaves me with three questions I don't have complete answers to yet.
1. Can a large provider build a series of highly efficient local operating cells, while centralising the low-value-adding activities that genuinely benefit from scale?
2. Can technology improve the matching of supply and demand without removing the human relationships that matter so much in care?
3. And can we design an operating model where better margin, better customer experience and better employee experience are not competing objectives?
I don't have a definitive answer yet, but I do worry about the long-term sustainability of the sector if providers cannot solve this equation. Ultimately, poor economics don't just affect provider margins. Over time, they affect workforce stability, service availability and the experience of older people who rely on these services.
Get the operating model wrong at scale, and the people who feel it first are rarely the ones in the boardroom. It is the worker doing back-to-back visits with no travel time built in, and the client whose appointment window keeps slipping.
There are clearly different ways to approach this. The interesting questions are whether there is an optimal scale for home care, whether density matters more than scale, and how much difference the operating model itself can make. These are questions worth exploring as the sector continues to evolve.
Sudharsan Raghunathan
Founder, LeanCX | Sudharsan works with enterprise leaders to redesign how their organisations actually function by aligning people, process, and technology so transformation sticks.
leancx.com.au
