Threading a needle: low occupancy, fewer staff pose a double challenge for operators
As the senior living industry looks to increase occupancy in the wake of the Covid-19 pandemic, one of the biggest hurdles is staffing.
On the one hand, operators need to demonstrate the quality of their operations to potential residents to entice them to move in – and to do that, they need enough workers to maintain service levels. On the other hand, senior living operating budgets are already constrained given occupancy and income status, leaving less money to recruit staff.
The combination of low occupancy and staffing levels can make life difficult for operators, especially those looking to wean themselves off high staffing agency costs in 2022. In more severe cases, these conditions can create a sort of a feedback loop in which operators don’t have the workers to staff a particular wing or section in their community, leaving them unable to fill the beds or adequately care for the residents they already have.
While the issue of staffing and occupancy is ever-present for operators, business executives who spoke with Senior Housing News said they felt occupancy levels in their respective communities were not not greatly affected by staffing issues. But they also believe this is the result of strategies they have implemented to simultaneously rebuild occupancy from pandemic lows while tackling staffing issues.
Retirement Center Management (RCM) President David Keaton, Jr. has called staffing the “number one issue” facing the senior living industry.
“By trying to staff the building and making sure you’re providing good care, we’re able to do that,” Keaton, Jr. said. “But we have to supplement with agency staff, and it’s a habit we’d like to try to break.”
To increase occupancy, Meridian Senior Living Sales Director Kevin Carlin acknowledged the continued need to hire more staff, adding that the company is using its talent recruitment process “like a sales process. “.
The Bethesda, Md.-based operator avoided major occupancy losses due to staffing issues only thanks to what Carlin called a “heroic effort” from the company’s workforce. , with some department heads occupying entry-level positions in certain communities – a practice other operators have also implemented across the industry.
“Even though we had things to do in the background, our people really stepped up,” Carlin said. “It hasn’t been felt as much by the residents.”
Other operators, like MBK Senior Living, based in Irvine, Calif., have focused on hiring new workers while keeping the ones they have.
“Unfortunately, it has taken a pandemic for us to realize that every interaction we have with potential residents and future staff is an opportunity that must be highly valued and prioritized,” she added. “I think we’re looking at staffing much more creatively.”
Stay on top of retention, recruitment
One way to avoid facing simultaneous staffing and occupancy issues is to avoid labor shortages first.
Replacing positions that require experience and training, such as nursing or leadership roles, has been a particular pain point for senior living companies. This is why MBK developed a general management training program, which resulted in the promotion of six internal candidates to general management positions in various communities. Further promotions helped keep vital staff on board as executive directors were promoted to regional director positions.
“It’s a symbiotic relationship to treat your team members with respect, kindness and love,” Van Der Westhuizen said. “In return, they will do the same for our residents and their families.”
She added that the company’s recruiting team has made finding qualified new employees “a huge priority”, in the same way communities approach potential residents. As a result, staffing issues did not impact MBK’s inquiries, visits and move-ins.
“I think that says a lot about our talent acquisition,” she added.
MBK’s occupancy low point came in February 2021 when the company was facing an occupancy deficit of around 12%. Fast forward to today, and MBK has recouped 10% of that loss, while some communities have remained at or near capacity throughout the pandemic, according to Van Der Westhuizen.
MBK recouped occupancy losses and stabilized its portfolio in part by remaining extremely sales-focused, Van Der Westhuizen said.
“Unless we stay focused on sales, get to know our prospects, and help them through the process, we won’t be able to touch as many lives as we want,” Van Der Westhuizen said. “I think that’s how we were able to recover the occupation so quickly.”
Similarly, Sinceri Senior Living CEO Chris Belford said the Vancouver, Washington-based company’s recruiting center has been a bright spot for new hires in its 77 communities in 21 states, but added that some parts of the country faced greater challenges recruiting staff. location or local labor market conditions.
“There are very certain circumstances where you go on placement leave and you don’t want to bring in someone new because of your staffing shortages,” Sinceri told SHN. “But we never got there.”
Over the past 12 years, Meridian team members have come to know each other outside of their work in diverse communities, which the supplier has helped foster. The development of a culture of proximity has had a beneficial effect on operations in the company’s 45 communities in 15 states.
“I think that continues to give us an edge,” Carlin said. “We can’t chase them away with unlimited wages, so they have to enjoy working in this particular community that keeps people coming back to work.”
Over the past eight months, the operator has revamped its new employee orientation program to better onboard newcomers, while offering an educational leadership program and offering tuition assistance for those looking to further their career in the residence for the elderly.
“Without training, they’re more likely to leave,” Carlin said.
Focusing on digital awareness, Carlin said Meridian was in the midst of revamping the company’s career website with it to include videos about the staff and culture of Meridian properties.
“Our video campaign with our residents has shown great promise and we’ve seen a lot of great results with residents,” Carlin said. “We hope this will encourage people to contact us and come and work for us during the competition.
Carlin said Meridian hasn’t suffered a net occupancy loss in any month since January 2021, noting that some of the operator’s properties have reached or are close to reaching 90% occupancy. He added that Meridian’s sales culture has helped bring residents into the community, including through multimedia advertising campaigns through video testimonials with residents.
RCM, based in Houston, Texas, increased the average occupancy rate of its 25 properties to more than 83%, from a low point of 70% in 2021. Some RCM properties varied between 90% and 100% occupancy during the pandemic, according to RCM Vice President of Marketing Justin Yee.
RCM’s digital push change effort in marketing began in 2020 before the pandemic, but was given a boost when tours were held virtually for potential residents and RCM began spending advertising revenue in various formats in online, from social media to online advertising, Yee said. Focusing on digital marketing and advertising helped reverse the trend of occupancy losses seen in 2021.
Personnel costs remain high
Filling staffing gaps with agency workers is a strategy many operators have relied on to prevent staffing and occupancy issues from colliding. Given the exorbitant cost of using recruitment agencies, this is not a long-term sustainable model to build on, Keaton said, citing the “astronomical” expense involved.
“It really squeezes margins for businesses across the board,” Keaton said of the staffing. “The way you have to solve this is you have to manage resident rates, both renewal rates and market rates.”
Executives at some operators, like Denver-based operator Solera Senior Living, have focused on determining exact staffing levels instead of trying to adjust salaries at short notice. CEO Adam Kaplan, believes the industry will have a multi-year road to regain its pre-pandemic margins, and in the meantime the company is not skimping on staffing ratios to maintain quality in its communities.
“We can’t try to manage our workforce,” he said during a recent panel at the NIC’s 2022 Spring Conference in Dallas.
Annual and recurring fees absorbed by residents are on the rise across the industry. Assisted living rates rose 4.65% in 2021 and nonprofit independent living rates hit “all-time highs” earlier this year.
Providers not only have to compensate for staffing costs, they also have to deal with inflation. This has prompted some companies to consider annual rate increases in the range of 7% to 10%.
A Social Security cost-of-living adjustment of 5.9% in 2022 could make fee increases more digestible for residents, but setting high rates could pose problems for operators in the future, Keaton warned. .
“If we are faced with investing 7 to 10% [increases] and the next cost of living increase is nominal, you might start to see some people worry, but you know that at the moment we haven’t seen any major impact on occupancy due to staff.
Carlin said the use of temp agencies prevents providers from creating a positive and consistent employment culture.
“It’s not that we eliminated [the use of agencies]”, Carlin said. “But we are reducing it quite regularly, which is good to see.