There are labor shortages all over the country, but this affects the long-term care industry differently. Daily we hear news stories about businesses that have cut their hours, are cutting back on services, and even closing for days at a time because they are short-staffed. While this is concerning for us all, as it affects our economic growth, long-term care operators do not have the same options to counter the staffing crisis. A skilled nursing or senior living operator cannot cut hours or close the doors for a day or two. Residents must be cared for, and operators must meet regulated staffing per patient day requirements. In a post-pandemic environment in which margins for operators are historically low, operators are forced to fill the gaps with expensive agency labor while desperately trying to hire and retain direct staff amidst unprecedented challenges.
In an economy with more than ten-million job openings in August, what's driving the shortage?
Insider spoke with labor secretary Marty Walsh, discussed some drivers, and noted that people are rethinking their lives and work. As workers spent a year at home during the pandemic, priorities shifted, and for many, a work-life balance and flexible schedules are the keys. A New York Times article echoed similar sentiments. "The net result is that arguably for the first time in decades, workers up and down the income ladder have leverage. And they are using it to demand not just higher pay but also flexible hours, more generous benefits, and better working conditions."
Strategically, long-term and senior care operators should tackle labor challenges from a few perspectives.
We are arguably living in one of the most competitive staffing markets ever. How operators attract talent can directly correlate to how operators retain talent.
An employee-first culture can go a long way. Understanding the human perspective and applying it to company culture is an excellent place to start. Drive, a long-term and senior care consulting firm that helps operators drive outcomes through culture, talks about the 'employee brand.' "Just like you have a marketing brand identity for attracting residents, you need to have a brand identity to attract new employees." Ask questions of your employees. Find out what is special about your organization and what you can improve. Build your employee brand on input from your employees and make that a focus in your hiring efforts.
Creative Benefits & Perks
Benefits are another way to stand out. Let's think outside of the traditional benefits box. You might be thinking; we do offer benefits. We offer health, dental, and paid vacation. That's great, but so is everyone else. Today, workers think of benefits outside of the traditional set. Here are a few.
Flexible Scheduling: More and more workers consider flexible scheduling the new normal. Long-term care can be a particularly stressful job. Flex scheduling can help reduce employee burnout and turnover and help promote a healthy work-life balance.
Daily access to earned wages: This is an easy benefit to offer because many labor solutions provide a feature that allows employees to transfer earned wages to their bank account between paychecks. Giving employees access to the money they've earned between paychecks helps reduce stress.
Wellness programs: These can include things like employee assistance programs, access to therapists and crisis counselors, mental health assistance, access to nutritionists, and discounted gym memberships.
Tuition reimbursement and student loan repayment: Employees who are less financially burdened are less likely to leave.
Career development training: Offering paid career development training during working hours is a great way to show your staff you are invested in their future.
Employee appreciation programs: Employee appreciation goes beyond monetary compensation, although money matters too. A 2021 Harvard Business Review study determined that those in helper professions like health care "place a higher value on social recognition, and are less motivated by salary" than their counterparts. Employee appreciation goes beyond recognizing the highest achievement. Improvements should be recognized as well, and often. Put together formal and informal processes for employee appreciation and ensure they are consistently happening across all departments.
Childcare assistance programs: Monthly childcare costs have caused some families to reconsider going back to work after the pandemic. A 2021 Cost of Care Survey by Care.com found that 85% of parents report they are spending 10% or more of their household income on childcare. To combat the expense, 42% of parents reduced hours at work, 26% changed jobs, and 26% left the workforce altogether.
'Found' Money for Higher Wages
While the wants of today's workers reflect more than wages, the need remains the same; people need a living wage. A report released by PHI National, a New York City-based policy research and advocacy organization, found that direct care will add more new jobs than any other single occupation. Despite this, the median hourly wage in 2020 was $13.56. The median annual earnings for direct care workers were just $20,200, and 44% of this workforce lives in low-income households. 45% rely on public assistance like Medicaid.
Many long-term care operators do not have dollars in the existing budget to keep up with the competitive wages offered in other healthcare settings. Considering the organization pivoted to modernize culture, benefits, and employee perks, the slim margins available were already allocated to other recruitment and retention activities. Here are a few tips for finding money in what you're already spending.
Maximize employee resources: What if you could make every employee equal to one and a quarter or even one and a half employees by increasing their efficiency? Organizations that leverage technology to optimize their processes see this result. By giving teams tools to do their jobs more efficiently, you create additional value. Equally important is the ease of use of the tools you provide. If the systems are complicated and take too long to learn, it can be counter-productive.
Improve financial KPIs: What difference would an improvement of 4 days on overall cash collection time make to your cash flow? If your facility leadership could view accurate profitability forecasts every morning and proactively adjust, what would that do to your bottom line? Analyzing trends, forecasts, and financial performance every day can significantly impact profitability, but doing it manually can be time-consuming. Consider putting tools in place to automate the process.
Decrease overtime spending: If you are looking at overtime after it's already happened, you are setting your money on fire. Giving your scheduling and leadership teams the tools to see predicted overtime before it's happened allows them to adjust before the cost is realized. Facilities have reported savings of $54,000 per facility annually simply by giving employees access to predictive overtime reporting.
Maximize reimbursement: Reimbursement is complicated and frequently changing. There are tools, like MDS scrubbers, that pay for themselves and save money by improving financial optimization and have been proven to increase quality. Additionally, clinical, and operational analytic tools can identify trends that adversely affect rates so that teams can adjust and track improvements back to dollars. If you rely solely on your EHR and manual analysis, you are wasting money and resources.
Reduce monthly costs: This sounds like a generic statement, but there are specific ways to reduce costs without impacting productivity. Take a look at your fixed-cost spending. Things like phone, data, and internet services can often be billed incorrectly or simply designed in a less than optimal way. An IT and telecom spend analysis is a time-consuming and manual process. Still, some companies will perform this work at no charge, and in some cases, they will perform the cleanup for free if you agree to their redesign recommendations. It's not uncommon to find $100,000 or more in annual savings through this process alone. Another way to reduce monthly costs is through procurement management. Group purchasing firms give you bulk buying power, and procurement systems can help automate purchasing and spend optimization.
Reduce turnover: We've come full circle here but let's put retention into the perspective of found dollars. Let's say you have 100 direct care workers, and each month, you turnover five employees. Annually, you have turned over a total of sixty employees for a turnover rate of 60%. Leading Age published a calculator to figure out the cost of turnover. Using their standards estimating around $4,500 per employee, the total turnover cost in this scenario is $270,000 per year. In this example, every 1% reduction to the turnover rate saves the company $4,500 for direct care workers alone. Replacement costs for salaried employees, like administrators, are even higher, usually around 1.5 times the individual's salary. Looking at costs exceeding $150,000 for one administrator, we need to do everything we can to ensure they are happy, healthy and given every opportunity to succeed.
There are many creative ways to find money to subsidize higher wages. Ultimately the goal is to move dollars from one line in the existing budget to another. To allocate found dollars to other things, like higher wages, you need to be able to see a tangible reduction in cost, and subsequently, the increase in cash so that you can confidentially reassign the dollars.
Theoretically, this would need to be accomplished in a reactive way viewing results over time historically. If organizations could accurately predict the outcomes of these changes daily, weekly, and monthly to allocate found dollars more quickly, it would be a game-changer.
CareWork is an operational platform for long-term care and senior living organizations that gives department heads, regional leadership, and corporate leadership teams a three-hundred-and-sixty-degree view of all areas of operations. Census and admissions, labor and overtime, employee recognition, procurement and financial, clinical and quality; all in one place. CareWork ties together the systems already in use to combine tasks and data into a single source of truth so teams can manage outcomes (clinical and financial) every day and track the success of changes made. A few examples include:
Retention and turnover trending automation: You've implemented changes to your company culture, the 'employee brand,' or you have rolled out a new perk to attract and retain talent. You want to track those changes to determine if they have a positive impact. You can do that manually or simply schedule a report in CareWork starting with the date of change and track it over a designated number of months. Now you've saved your HR team many hours of manual calculations and report-building, and you have the insight you need to continue or pivot to a new strategy quickly.
Save time, avoid duplicate work: You have some great systems in place for clinical, labor, scheduling, procurement, and financial management of the organization. Each system you've purchased addresses pieces of operational requirements. Your administrator or [insert department head here] comes into work each day and logs into each system separately. First, they must check to see if there are any open tasks they need to complete. From there, they need to pull information from each system separately, analyze that information and use it to complete manual reports. Every system has its own set of tasks, data, and analytics. The systems don't talk to each other, and your department heads face redundant work efforts every day. Instead, you give your department heads CareWork. Now they have a home base for operations. Instead of logging into six or seven systems separately, they log into one. They can see collective information from all systems on what tasks they need to complete, combined analytics from all sources, and highlights on what is going well and what is improving. They are more efficient, have more time in a day, and are happier with their job.
Reduce Monthly Costs: When teams can see real-time or near real-time performance, they can make nimble adjustments that impact the bottom line. What does my facility spending look like right now, and can I make changes to stick to the budget? Who is predicted to have overtime hours this pay period? Can I rearrange the schedule to minimize the cost impact? What is impacting my profitability? What is affecting my average daily rate? Information is power. Your data exists; it's just not all in one place. CareWork gives teams the information they need to manage strategically, proactively, and in a way that has a positive impact on costs.
Reduce Turnover: CareWork helps organizations address challenges that directly impact leadership employee retention and can be a selling point for recruitment when leadership candidates compare one organization to another. When interviewing potential candidates, ask them what they liked and disliked about the systems they used in their last job. Ask them how long daily administrative tasks took and what they had to complete manually. Eliminating unnecessary frustration in the day-to-day of your employee's work-life will positively impact employee retention.
Together, improving company culture and the work environment, creative perks and benefits, and increased wages will make working in long-term and senior care attractive to today's workers. Couple that with the satisfaction that comes from care work, and we could position this industry to be a leader in the labor market.
Contact us for more information on CareWork or recommendations on any of the technology-based solutions mentioned in this article. We love sharing our client's recommendations for systems that have worked well for them. And remember, we make care work easier!