Sep 19, 2023

How does Novello Healthcare set our rates?

When it comes to setting rates, Novello Healthcare is different to every single other agency. Because our app does all the hard work, we don’t need to employ a team of recruiters, each taking a cut. Our low overheads means that all our members can sleep easy knowing that we keep as much money as possible between the healthcare professional and the hospital.

The best way to explain in detail how Novello Healthcare sets our rates is to first explain how it works, then we’ll circle back to how the pay rate is set after that. If there’s any point that needs clarification, please do not hesitate to email me on jane@novellohealthcare.com. Happy reading – and I do hope you join us on our mission!

How do nursing agencies set their rates?

If only there was one answer! All agencies do this differently, so I can’t say how other agencies do this, but I can explain how it works, how we do it here at Novello, and why. 

Firstly, Novello will always try to get the absolute best rates for our members. And however high we manage to get our rates, they will never feel high enough for the job that you do! 

How are agency nurse pay rates calculated?

To keep it simple:

Pay Rate + Agency Fee = Charge Rate (to hospital)

When agencies approach each hospital to ask if they can supply, the hospital will ask if the agency is on framework (Novello will be an on framework agency from October 2023*) and if so, they will then discuss rates and the agency’s ability to fill shifts. Occasionally a hospital will enter into discussion and agencies can negotiate a rate with them. However, most hospitals will have a fixed charge rate and agencies are told to adhere to this if we want to supply. Agencies will then deduct their agency fee, to give the pay rate. 

Why does the pay rate differ between agencies, if the hospital has a fixed charge rate? 

There are two reasons for this. Firstly, it depends on what tier the agency is on. Secondly it depends on the agency fee that the agency decides to apply. 

What is a nursing agency tier?

Most NHS hospitals will have a tiering system. A typical example will be:

Tier 1 
5 framework agencies, all agreed to a Charge Rate of £30 per hour (day rate). Shifts are sent out to tier 1 agencies, 28 days ahead of shifts start date. 

Tier 2 
10 framework agencies, all agreed to a Charge Rate of £35 per hour (day rate). Shifts are sent out to tier 2 agencies, 7 days ahead of shift start date (giving all tier 1 agencies the opportunity to fill shifts first)

Tier 3 
10 framework agencies, all agreed to a Charge Rate of £40 per hour (day rate). Shifts are sent out to tier 3 agencies, 48 hours ahead of shift start date (giving all tier 1 and 2 agencies the opportunity to fill the shifts first)

(Please note these are not Novello’s rates, they are an example of a tiering system to explain the process)

What is an off-framework nursing agency? 

All NHS hospitals have to report to NHS England on their agency spend with the expectation of only using agencies that have agreed to be on framework. This framework helps the NHS to control spend and compliance. 

However, if a hospital can’t fill through their agreed tiering system, they may go out to off framework agencies typically at last minute or less than 24 hours notice. This will only be after all their on-framework agencies have been unable to fill. 

What is NHSP and where do they sit in this system?

In some trusts, there will be a ‘Managed Service Provider’ (MSP), like NHSP, where they effectively sit as Tier zero before then managing the cascade out to tier 1, 2, 3 agencies etc. This is to further help the trust control their agency spend / supply chain. 

How does Novello set our rates?

Here at Novello, we want to provide lots of lovely shifts for our members (accepting tier 1 status would provide the most shifts, but the lowest pay rate), but we also know that we need to be able to provide shifts at a rate that is acceptable to most people (there is a large variance as to what this is!)

We also look to work in partnership with hospitals, so we may start on tier 1, but with a view to providing evidence that it’s impossible to fill shifts at this rate, so the hospital can see we really have tried but we just can’t find nurses to work at these rates. We can then discuss increasing these rates, or moving to tier 2 and we’ll work through this process with the hospital. 

Our mission is to find a sustainable model for everyone in the NHS. This means helping our Trust partners find the rate that nurses will happily work at the hospital, without the hospital having to move through the tierings to off-framework agencies, while ensuring all our members have shifts available to them at rates they are happy with.

Why are agency nurse rates currently low? 

Many agency workers will have noticed that there has been a decrease in demand for agency workers over the summer months. This happens most years to an extent as we see seasonal trends with autumn and winter being our busiest months, but this year seems to have been more noticeable. We think this is due to the government announcing the end of the pandemic and therefore putting pressure on services to cope without agency workers, alongside the strike action meaning services have been reduced. We don’t expect this to last through the winter months. 

What is Novello doing to help? 

Remember our first equation? 

Pay Rate + Agency Fee = Charge Rate (to hospital)

Our app allows our members to self-serve, which in turn means we can reduce our agency fee to a low, fixed rate for the hospital. This ensures that we keep as much money as possible between you, our members, and the hospitals, our partners. 

Why do you agree to any ‘low’ rates?

While some rates may appear low to you, they will only be on our app if we have other members that are happy to work at these rates and we therefore feel it important to provide this service to those that want these shifts. Some of our members may live within 5 miles of a hospital and are happy to accept a lower rate than someone who is further away. So if it’s to supply at these rates, or not at all to a particular hospital, we will choose to still provide this service for those members nearby. 

Please know that it’s a case of this, or not supplying to the hospital at all. 

While the rate at that hospital may not be high enough for you, we work hard to ensure there are shifts and rates at hospitals across the country that will be right for all our members so please do keep giving us feedback and letting us know where you want to work and at what rate!

*October 2023 is the date given by the framework but this is subject to change (on their behalf), we will keep you posted!

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