How Middle-market Senior Living Operators Keep Staffing From Blowing Up Their Budgets

It’s no secret in senior living that staffing is often the most expensive part of operations. For middle-market operators, staffing is especially a challenge.

Operators that try to keep rates lower for residents must balance the necessary cost of staffing with affordability. From food costs and utilities to insurance and debt service, senior living operations must contend with an array of expenses. Operators also must pay higher wages to attract the staff they need in light of other industries attempting to hire the same workers. But if they move too far in one direction, rates could exceed residents’ ability to pay their rent; too far in the other and care quality might suffer.

Senior living operators in the middle-market sector including Innovation Senior Living, CP Senior Living, 2Life Communities, Milestone Retirement Communities and United Church Homes have come up with strategies including investing in smaller communities, universal workers and enhancing community culture in order to meet that balance.

Making do with fewer staffers

Senior living operators charging middle-market rates must often make do with only exactly the right amount of staff on the payroll. That usually comes with its own challenges, including staffing shortages and the use of overtime to fill gaps.

As CEO of Innovation Senior Living – a Winter Park, Florida-based operator with five communities that focuses on Medicaid waivers to keep costs around $3,000 per month – Pilar Carvajal is no stranger to that dynamic. The operator uses a universal worker model where frontline staff take on a variety of roles, from food service to wellness activities. That has helped the operator fill gaps and make do with fewer people in its communities, all while meeting operating margins of 25%.

Innovation’s communities also are smaller and are clustered together to allow them to share resources, like an executive director managing two properties at once while also handling tasks like general business management.

The operator has also implemented a practice of not filling in a position with agency staffing if a staff member does not show up for work.

“We’ve chosen not to fill a shift if a staff member does not show up to work, instead placing greater accountability on the team. When someone doesn’t show up, it means those who are at work must step up. That’s why it’s essential to work together and support one another so everyone shows up consistently and collaborates,” Carvajal said.

Vancouver, Washington-based Milestone Retirement Communities, is driving higher margins by expanding with smaller communities. Anything under 70 units is appealing to the company, and it targets communities ranging from 50 to 55 units, according to Owner and CEO Caryl Ridgeway.

Like Innovation, the smaller footprint allows the operator to fine-tune staffing ratios for residents based on acuity.Milestone’s ratio is to staff a community with about one staffer for every eight memory care residents, and one staffer for every 11 assisted living residents.

Sometimes, senior living operators are giving residents more autonomy to handle things like engagement, programming and even certain duties around the community in lieu of staff doing it. One such operator is Brighton, Massachusetts-based nonprofit 2Life Communities, which is welcoming residents into its first middle-market Opus community, loosely requires residents to take on 10 hours per month of volunteer work, such as coordinating social groups, staffing community libraries and setting tables, according to Denise McQuaide, chief of middle market innovation.

“Out of 230 residents, they are all looking for social engagement and purpose,” McQuaide told Senior Housing News. “We have numerous professors. We have artists who want to teach art classes. We have musicians who want to do programs, whether it be for entertainment or putting together theater groups, and we have organized ourselves to enhance volunteerism.”

Marion, Ohio-based United Church Homes has a tiered middle-market model that allows residents to essentially have a la carte services through its NaviGuide care coordination program, with care coordinators organizing outside services and support for residents to keep them independent as long as possible. The organization encourages residents to take part in and lead community engagement, whether it is forming clubs or organizing movie nights – jobs that, in the past, were handled by staff. Resident groups can help supplement the efforts of community life directors after hours and on the weekends, according to Amy Kotterman, senior executive director of integrated operations.

In addition, United Church Homes limits the services it offers for its middle market independent living communities, such as not including dining as a basic service in some of its communities. Kotterman added the trend of operators shifting to bistros and cafes is also beneficial for general labor costs, as they are open for limited hours and are largely self-serviced, so they can be run with minimal staff in place.

Another operator, Dallas, Texas-based CP Senior Living, has grown its portfolio in rural and secondary markets in Texas and Alabama. By doing so, its team has learned what roles can be effectively eliminated to keep staffing budgets under control while charging around $3,000 per month.

“We do not have a full time marketing person on site. We do not have a business manager. We have an activity director, and the rest is some part time housekeeping, part time maintenance, things like that,” Andrew Oksner, CP Senior Living CEO, said. “Generally speaking, it’s a scaled down model that doesn’t compromise on caregiving.”

Oksner credits a leaner staffing model to the efforts from the executive directors in the communities who “wear many hats,” including marketing, operations and business office manager, alongside support offered from the corporate office.

Maintain margins with retention

Training and hiring new workers is expensive, which is why middle-market operators seek to retain them as much as possible.

According to Carvajal, Innovation’s overall turnover rate is around 30%. Carvajal believes that creating a culture of teamwork and collaboration from the moment a community is onboarded goes a long way in retaining workers.

Milestone still uses agency staffers in its most rural markets, but it is working with a local state chapter to bring in education to train those less prone or interested in working in senior living to establish a new pipeline of staff options.

Executive management at Milestone visit buildings in the company’s 18-community portfolio often to “show people that we’re willing to work,” said Chief Strategy Officer Cayden Ridgeway.

“We need to work hard, we need to do our jobs. We can’t sit on our phones,” he said. “We need to have a culture in the building that’s positive, so that we can get an agency out, but also so that we can have a productive staff.”

What has helped maintain staffing levels and improve turnovers for 2Life, according to McQuaide, is partnering with outside organizations to provide healthcare and bring a homecare approach to a continuing care retirement community. Not only does it help reduce the need for staffing a nursing home or assisted living wing, it reduces the costs associated with them. Frontline staff are also paid around $20 per hour when they start.

“If you start with the end in mind, and you say, ‘Whoever I hire has to be the right person.’ I have to pay them well, and I can’t lose them. I’ve got to make sure they’re happy, that their job, that their environment is good and that the culture is good,” McQuaide said.

The post How Middle-Market Senior Living Operators Keep Staffing From Blowing Up Their Budgets appeared first on Senior Housing News.