The 'Walmart effect' intensifies

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Lois A. Bowers
Lois A. Bowers

In December, Argentum President and CEO James Balda shared with me his term for the wage pressure facing senior living operators. “It's what I would call the Walmart effect, in terms of a lot of their direct care workers may prefer to go across the street and work at Walmart as opposed to what is hard work in terms of providing care for seniors,” he said. The remark was part of a larger discussion of challenges facing senior living, which became part of this January article: “The senior living agenda for 2016.”

On Saturday, the Walmart effect will intensify. Wal-Mart Stores Inc. is increasing the wages of more than 1.1 million workers in its Walmart and Sam's Club stores. The company says it is investing $2.7 billion over two years to lift hourly full-time wage rates to $13.38 and part-time rates to $10.58, on average. Workers hired before Jan. 1 will earn a minimum of $10 per hour, new associates will start at $9 an hour but will see wages increase to $10 an hour after completing a training program, and employees already earning $10 an hour will receive their annual pay increases early.

And Wal-Mart's plans don't end with wage increases. March 5, the company will roll out a new paid time off system that will do away with the previously required one-day wait to use sick time, will enable workers to use time as soon as it is earned, will allow associates to carry over some time off from year to year and will pay them for unused time over the maximum carryover amount. That's on top of a new short-term disability plan begun Jan. 1. It pays 50% of an employee's average weekly wage, up to $200, for 26 weeks when he or she needs to be away from work because of personal medical reasons. Workers also have the option of signing up for an enhanced short-term disability program that pays 60% of their wages, with no maximum dollar amount, for up to 26 weeks; that voluntary plan replaced a more expensive plan that offered less coverage to employees.

In an environment where the big retailer already is a threat to staff recruiting and retention efforts, the news should concern any senior living provider not offering comparable wages and benefits. Especially when one considers the results of a recent Harris Poll survey, conducted on behalf of CareerBuilder, that found that 30% of workers aged 18 to 34 want a new job in 2016; 21% of workers overall said they would like to switch positions.

And another recent national survey found that 40% of workers aged 35 to 64 may try to find a new job this year. “More money” was the top reason for looking, participants told AARP.

Neither of those surveys was specific to senior living, but Argentum's own just-released report, “Getting to 2025: A Senior Living Roadmap,” reveals industry-specific information that is troubling. That report includes results of a survey, conducted in 2015 by National Research Corp., that found that only 8.5% of those aged 18 to 34 years have “very high” trust and confidence in assisted living; about 23% of people in that age group have “fairly high” trust and confidence, and almost 46% had “some” trust and confidence in it. Argentum attributes the trust issues more to a lack of awareness of the industry than to actual knowledge. If that's the case, then operators can add education to their to-do lists.

But recruiting and retention remain the biggest issues facing providers. The Argentum report indicates that through 2025, the industry will need to hire 1.2 million new employees to serve the increasing number of older adults becoming senior living residents and to replace existing workers who leave their jobs. The positions with the biggest needs will be nursing assistant (278,500 openings), home health aide (183,700), personal care aide (113,400), food server (96,300), maid and housekeeping cleaner (70,800) and cook (60,600).

The industry, as the report asserts, must create working environments and career paths that are attractive to these workers. Argentum believes it has some solutions. To aid workforce development, the “Roadmap” states that the industry must prevent the passage of policy and legislative reforms that would negatively affect providers; expand job creation and invest in training and development programs; research what drives employment and engagement; partner with academic institutions to address the growing need for senior living professionals; develop and track baseline metrics associated with employee engagement, perceptions and satisfaction; and develop professional credentials to elevate the status of the profession in the eye of current and prospective employees.

And let's not forget the basics: Most prospective employees will find fair wages and benefits very attractive. A differentiator that senior living can offer to them over retail and some other fields is the opportunity to make a meaningful and lasting difference in the lives of older adults.

Lois A. Bowers is senior editor of McKnight's Senior Living. Contact her at lois.bowers@mcknights.com. Follow her on Twitter @Lois_Bowers.

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