Local government reorganisation (LGR) and the growth of local authority trading companies (LATCOs) are reshaping how adult social care is delivered. While much attention is given to structures, funding and commissioning, the most immediate risk sits beneath the surface: workforce stability.
In a sector already operating within a fragile labour market, uncertainty around future leadership, accountability and service models can quickly lead to the loss of experienced leaders, registered managers and qualified professionals. The consequences are immediate and tangible: operational pressure increases, regulatory risk escalates and service continuity is weakened at precisely the point stability is needed most.
For leaders navigating LGR, retaining and stabilising the social care workforce is not a secondary consideration. It is central to delivering safe, resilient and sustainable services.
Periods of reorganisation inevitably create uncertainty. Questions around contracts, future roles, reporting lines and governance arrangements can linger for months, sometimes years. Even when leaders believe they are communicating regularly, a lack of clarity on the ‘end state' can quickly erode confidence. Morale dips, engagement drops and productivity can suffer long before any formal changes take effect.
The biggest risk? High-performing people are often the first to leave
Experienced, in-demand professionals tend to have options. When ambiguity persists, they are more likely to seek certainty elsewhere often in neighbouring authorities, combined authorities, LATCOs with clearer remits, or outside local government altogether. This creates a double challenge: organisations lose their strongest talent just when stability and institutional knowledge are most needed, and remaining teams are left carrying increased workloads during an already challenging transition.
The added complexity within social care LATCOs
For LATCOs, workforce risk is even more nuanced but in social care LATCOs, the stakes are higher still. The social care workforce is already operating in a fragile labour market. Recruitment and retention challenges are well documented, and any uncertainty around future commissioning models, contract novation or funding flows can intensify turnover. Social care LATCOs often rely on a predominantly frontline workforce working on tight margins, with limited organisational resilience to absorb disruption. When uncertainty increases, vacancy rates and agency costs can climb quickly, undermining the financial assumptions on which the LATCO operates.
Regulatory risk elevates workforce instability further
Unlike LATCOs in other service areas, adult social care trading companies must maintain compliance with Care Quality Commission standards throughout structural change. Workforce instability, particularly among registered managers, service managers or qualified professionals poses an immediate regulatory and reputational risk. CQC places heavy emphasis on leadership visibility, safe staffing and quality oversight; consequently, high turnover or unclear lines of accountability can trigger deterioration in ratings or heightened scrutiny.
During LGR, the commissioner-provider environment can also shift. Social care LATCOs may face evolving contract volumes, quality expectations or new performance frameworks. This uncertainty directly affects leadership confidence and candidate behaviour. Senior leaders – especially those carrying ‘responsible individual' or ‘registered manager' – status are understandably cautious about stepping into environments where strategic direction, contractual risk or long-term mandate remain unclear.
Lean leadership and single points of failure
Social care LATCOs frequently operate with lean leadership teams. This means single points of failure are common in areas such as quality, safeguarding, operations and registered management. During LGR, when strategic oversight is already stretched, the loss of even one senior figure can have significant operational and safety implications.
Culture and identity pressures
Care services depend heavily on a stable, values-driven culture. But LATCOs navigating LGR can find themselves caught between different identities: council heritage, trading company autonomy and the realities of the social care provider market. If leaders do not actively articulate the LATCO's purpose, values and future role, frontline staff already delivering emotionally demanding roles can quickly feel disconnected or undervalued.
Why communication and leadership stability matter
Clear, honest and consistent communication is one of the most powerful retention tools leaders have during LGR. This is not about having all the answers – often that is impossible – but about being transparent on what is known, what is not and when updates will be shared. Silence or vague reassurance tends to create more anxiety than acknowledging uncertainty head-on.
Leadership stability also plays a crucial role. During periods of structural change, visible and credible senior leadership provides reassurance to the wider organisation. Frequent shifts in direction, unclear accountability or prolonged vacancies at executive level can undermine confidence and slow decision-making at precisely the moment clarity is needed most. People need to understand who is leading, what the mandate is, and how decisions will be taken, even if the final structure is still evolving.
Workforce planning should sit alongside structural planning, not follow it. Too often, organisational design is finalised before leaders fully understand the skills, capacity and capability required to deliver future services. This can result in mismatches between roles and people, rushed permanent recruitment campaigns, or critical leadership gaps at key stages of transition – all of which carry cost, continuity and reputational risks.
From reactive recruitment to strategic talent management
One of the most common patterns we see during LGR is recruitment becoming reactive. Resignations trigger urgent hiring, often into roles that have not been fully future proofed. Job descriptions are dusted off, timelines are compressed and the focus shifts to ‘getting someone in' rather than securing the right long-term capability.
A more strategic approach starts with identifying critical roles and individuals early. Which posts are business-critical during transition? Where are the single points of failure? Which skills will be harder to replace if lost? Proactive retention conversations with high performers, combined with clear development and progression pathways, can make a tangible difference.
LGR and LATCO formation also present opportunities to rethink talent. New structures can enable broader roles, shared services and more flexible career paths across organisations. Leaders who articulate a compelling vision for what this means for individuals – not just the organisation – are far more likely to retain and attract strong candidates.
LGR and LATCOs bring complexity, but social care LATCOs sit at the sharpest point of that risk. Local authorities and LATCO boards that treat talent as a strategic asset, and manage uncertainty with clarity and purpose, will be far better placed to deliver resilient, safe and high quality services in the years ahead. Those that overlook the human impact of change risk losing exactly the people they need most.
Helen Alwell is Senior Consultant, Executive Search at Tile Hill
