The Labor Puzzle

Operators piece together creative solutions to one of the industry’s toughest problems — recruiting and retaining quality employees.

By Jeff Shaw

Recruiting and retaining quality employees on the front lines remains one of the biggest challenges facing the seniors housing industry today. Argentum estimates the senior living industry will need to fill 1.4 million positions by 2025.

The employment landscape in the United States has drastically changed since early this year. The unemployment rate rose 440 basis points to 7.9 percent between September 2019 and September 2020, according to the U.S. Bureau of Labor Statistics, as the pandemic led to a massive wave of furloughs and layoffs across the country. In April alone, the U.S. economy shed 20.5 million jobs.

But has a wider availability of labor eased hiring difficulties for seniors housing communities?

While there’s no data available yet, there is ample anecdotal information that suggests seniors housing operators may be capitalizing on this opportunity, according to Charles Turner, CEO of Kare. Through its app, the company offers a digital marketplace that allows caregivers and nurses to work unfilled shifts at senior care and post-acute care communities for a price well below that of employee overtime or of a staffing agency. 

Kare has launched the app in eight major metro areas. In addition to caregiving roles, the company focuses on furloughed hospitality workers looking for jobs in cooking, maintenance and housekeeping in seniors housing. When the company opened its platform for hospitality shifts, it received roughly 75 applications an hour to work on the platform, says Turner. 

“Workers find those same roles in senior care, get exposed to the world, and then maybe want to be a caregiver,” says Turner. “They’ll start to look and see it’s a career path that you can aspire to. If you’re a housekeeper in a hotel, I don’t know what you become after that. In seniors housing, we offer a career path.”

Kare’s revenue stream comes from an hourly fee it adds based on the new hire’s pay rate.

On the operator end, most everyone has become familiar with bonuses such as “hero pay” — a temporary higher wage during the pandemic. Massachusetts-based operator Benchmark Senior Living combined hero pay with a doubling of the bonus for employees who refer a new recruit.

“During COVID-19, we’ve had to be more aggressive when it comes to recruitment, as there has been a true shortage of candidates across our industry,” says Tim Reilly, Benchmark’s vice president of human resources.

Benchmark’s other employee-centered initiatives include childcare stipends, transportation assistance, free meals, additional emotional and mental health support, and the establishment of a grant program to pay employees who are out of sick days.

“Ensuring that our associates have the information they need to make the best decisions for themselves and their loved ones has been made possible through 24/7 communication,” says Reilly. “We also conducted regular virtual company-wide town hall conversations, some with expert guests, in which hundreds of associates participated and were heard, providing essential insights and solutions.”

Interviewing potential hires is largely done via web conference systems now. Even job fairs have gone virtual, according to Troy Keach, vice president of human resources for California-based nonprofit operator HumanGood.

“For team members working directly with residents, we still conduct an in-person interview at the community, but virtual job fairs and interviews have sped up our recruitment and selection process,” says Keach. “COVID-related safety tips are shared with team members in our daily meetings.”

There is a silver lining that has resulted from the current health crisis. Keach reports that HumanGood’s employee retention rate has actually risen during the pandemic.

“We believe this is based on a number of factors, including our ‘hiring for the heart’ programs and having strong values that resonate with potential employees.”

“Hiring for the heart” is how HumanGood describes its employee selection process, whereby the company brings in team members “who are aligned with our values and inspired by what they do,” according to Keach.

A scant supply of workers

Finding quality employees is a constant challenge for seniors housing operators, given the high level of care required, particularly in assisted living, memory care and skilled nursing settings. And the process isn’t cheap, either.

Seattle-based operator Merrill Gardens estimates that recruiting and hiring costs are approximately $4,000 per employee. This sum includes recruiting software, staffing agencies, advertising, job fairs, travel, drug testing, background checks, government compliance, referral bonuses, fixed infrastructure costs, and salary and benefits of those involved in recruiting activities.

Losing an employee costs money, too. According to Merrill Gardens, turnover costs are approximately 20 percent of an employee’s annual wage, averaging $7,000 per employee (which includes the $4,000 recruiting and hiring costs from above). Turnover expenses include termination costs, recruiting and hiring costs, vacancy costs and learning curve costs.

Turner reports that the average time to hire a frontline worker in the seniors housing industry is 49 days.

“It’s the longest hiring timeline of any industry because of all the processes, licenses and extensive drug and background checks,” says Turner. “People have to start looking at being more creative on how they get workers. The days of posting a job and doing interviewing are past. There’s no way to keep up with the velocity of hiring we need to do.”

Turner proposes his matchmaking app as part of the solution, since it vets potential employees and potential employers alike before the hiring process begins.

Merrill Gardens is “always recruiting,” according to Tana Gall, the company’s president. “We’re always looking for great people.”

Gall even carries business cards with her to hand out to any worker she sees that impresses her. She recalls a bus driver at Merrill Gardens who singled out a greeter at a retail store during a shopping trip. The greeter interviewed with Merrill Gardens that afternoon and got the job.

“She came in as an activity director and was later promoted to outreach director,” says Gall. “You’ve always got to look for people with the heart. We do the training. We didn’t know if she had experience, but she was good with people.”

Many operators, including Merrill Gardens and Benchmark, have established partnerships with local universities to seek out young candidates who want to start a promising career.

“There’s nothing I take greater pride in than getting younger folks,” says Gall. “I want to go out and find them. We don’t want them going through ads and recruiters.”

Like Kare, Merrill Gardens focuses on the hospitality industry. Hotel employees were hit particularly hard by the pandemic. Leisure and hospitality took the biggest job loss of any sector in April, shedding 7.7 million jobs, according to the U.S. Bureau of Labor Statistics.

“A lot of our recruiting right now is in the hospitality field,” says Gall. “We saw a lot of really great people out there losing their jobs. We reached out to people in hotels and restaurants to come work for us, and hopefully open their eyes to a whole different industry they didn’t know existed.”

Gall is also a member of the Argentum Workforce Development Committee, which “looks for ways to get out there and get more people into the industry.”

Benchmark partners with
Baltimore-based data firm Arena Analytics, “using their big data, artificial intelligence and predictive analytics for hiring,” says Reilly. “Leveraging their data-
science-based technology, we carefully screen for those who are attracted to serving others and share our core values.”

“Our partnership with Arena has been a very effective tool for both recruitment and retention that has reduced our turnover rate. Using algorithms, the hiring and retention predictions are made based on whether a job candidate is a good fit, will stay longer and be more engaged.”

In many ways, the old methods of recruiting are gone. Online job boards and social media “are the new normal for recruitment,” according to Keach.

“We try to connect with candidates as soon as possible after their applications and conduct video interviews to expedite the process. We are currently implementing new software to help us further improve our recruitment and onboarding experience for new hires. Moving forward, we will continue to use technology to enhance the team member experience.”

Engage the new generations

Operators should also be willing to communicate with employees in their preferred manner. While email and phone calls are effective for some workers, many younger people don’t respond well to either.

Gall shares another anecdote: An HR manager was having trouble getting good housekeeping applicants. When that manager switched from email to text, “everything turned around.”

“We’re dealing with multiple generations now,” says Gall. “Some don’t check their email but live and die by their text messages.”

For existing employees, Benchmark uses a variety of software to keep workers engaged. WeSpire offers the company “an online and mobile communication platform to improve our connection with frontline associates,” says Reilly. Benchmark is also expanding its use of Microsoft Yammer, a social networking service “for all of our associates to participate more fully in social sharing and learning from other communities.”

Merrill Gardens noticed that the majority of employee turnover occurred in the first 90 days of employment. To combat the problem, the company implemented a mentoring program. Top employees are certified as mentors who take new employees under their wing. New hires have someone to turn to, and mentors receive financial bonuses when their protégés reach 30 days, 90 days and one year of employment.

“It’s like the first day of school for new hires. Where is the time clock? When do people go to lunch?” says Gall. “That mentor makes you feel comfortable about being in that environment.”

The mentorship program noticeably reduced turnover. At one community over the course of a year, Merrill Gardens saw a turnover decrease of 13 percent for servers and 18 percent for med techs.

The program was recently expanded to include new executive directors and department heads. Learning from a peer rather than a boss allows employees to see “what it’s really like,” according to Gall. “It makes the new hires more comfortable, gives them someone to call, and creates a camaraderie that’s hard to get when you have communities in 20 states.”

Finders keepers

As Turner states, seniors housing offers a clear career path that many entry-level jobs simply can’t replicate. This is an advantage the industry should leverage at every opportunity, he says.

For example, Benchmark uses its Benchmark University program, “an in-house training arm designed to educate associates in all levels of our organization to grow in their careers,” according to Reilly.

“Our bi-annual talent reviews are also much more than a typical review,” continues Reilly. “We use them to identify top talent and specific areas for growth, such as coaching.”

HumanGood offers an Administrator in Training program and an Educational Reimbursement Program to encourage advancement of existing employees. Residents even get involved, funding a scholarship program for the continuing education of employees.

“Our team members are offered a career development program during their quarterly meetings with their supervisor, who helps them map out their career and establish goals and objectives,” says Keach.

At Merrill Gardens, new hires create a “dream job map” that allows the company to understand and hopefully realize the employee’s hopes for advancement.

Gall says the company also believes in a “nice balance between promoting from within, yet still bringing in people from the outside to make sure you’re keeping it fresh.”

“I will always look first inside our company and hope to promote from within, with a healthy dose of people from the outside,” says Gall. “When I hired for an HR director, we hired someone from Nike. That person did things really differently.”

That’s not to say the industry can ignore the nuts and bolts such as pay and benefits, according to Turner. Although he understands the need for a strong company culture, he says it can’t be at the expense of a solid benefits package.

“When you’re living paycheck to paycheck, every cent counts. We aren’t going to solve this by just having a better culture. That’s a luxury someone making $11 an hour can’t afford,” says Turner. “Benefits like supplementing childcare or meals at the community don’t sound like a lot to you and me, but it’s a really, really big deal to a frontline worker.”