A World Population Ageing report from the United Nations says that between 2015 and 2030, the number of people aged 60 or more years is expected to grow by 56% globally. The Population Reference Bureau report “Aging in the United States” states that by 2050, more than 2 billion people will be aged more than 60 years.
Consequently, the demand for elder and long-term care facilities is growing in tandem with the aging population.
A decrease in caregivers and new market competition, however, have created unique and complex staffing challenges for the healthcare industry. Senior living and care facilities must find creative solutions for recruiting and retention so that they can continue to provide high-quality resident care and services.
What do we need to focus on to sustain growth and profitability in senior living communities?
The two-pronged issue
1. An industry plagued by turnover.
The national turnover rate across all industries is around 16%. The elder care sector, however, often experiences turnover rates as high as 80% to 90%, and this high rate of employee attrition is expensive. The average cost to replace an employee is between $2,500 and $3,000.
Why are turnover rates so high?
One consideration is the physical and emotional toll of the profession. Caretakers are on their feet all day long and often can deal with what’s known as compassion fatigue, or feeling overburdened by emotions.
Additionally, when organizations suffer from high turnover rates, staffing shortages can occur. To fill the gaps, employees are taxed with more responsibilities and longer hours, which lead to burnout.
Another major factor with an effect on attrition is the pay rate. Many positions in senior living communities are entry-level or near-minimum-wage jobs. Low pay rates and limited benefits lead to dissatisfaction and, eventually, high turnover.
2. Decreased applicant pool
In addition to keeping staff around, many senior living communities are finding it difficult to attract new, qualified applicants to fill the staffing gaps. The situation today is that there are more open jobs than available workers. In fact, the unemployment rate is at its lowest since 2000, and it continues to decline.
The majority of caretaker positions at senior living communities are considered entry-level positions, and entry-level positions, according to 41% of companies polled by Indeed, are the most difficult positions to hire for.
The difficulty is not only due to a tight labor market but also is a product of the changing social patterns that are shaping the way employees view their job preferences. For example, the on-demand work economy is becoming an unexpected competitor of long-term care facilities because of the comparable pay and increased schedule flexibility.
Combating the issue
The equation is straightforward: to stay competitive, senior living communities must use innovative recruiting and retention techniques.
Many senior living businesses have started offering daily pay benefits as a solution. Daily pay benefits allow workers to access earned and unpaid wages 24 hours a day, 7 days a week.
In other words, no more waiting for payday.
A benefit that allows employees to access pay daily helps tackle financial stress, which can be a primary driver of disengagement and turnover in industries such as senior living and skilled nursing. According to PricewaterhouseCoopers, one-third of all employees are distracted by personal finance issues while at work, with almost 50% spending three hours or more each week handling personal finances at work.
Those with access to a daily pay benefit are better able to manage their finances and avoid missed bill payments that often cause a spiral of expensive bank fees and late fees — simply because they can access their money when they need it.
For healthcare-related organizations that aren’t located in major cities or that don’t have limitless dollars to spend on recruitment campaigns, the daily pay benefit costs nothing to roll out and is a proven, fast, effective and meaningful solution to improving employee retention.
A benefit with proven results
Senior living and care organizations such as Heritage of Care (52 locations, 4,500 employees) and Christian Horizons (15 locations, 2,100 caregivers) have seen positive results in employee retention and engagement after offering a daily pay benefit.
In fact, Christian Horizons reported that DailyPay reduced its employee turnover by 7.2% in four months and that month-over-month employee turnover continues to angle down.
Proprietary data show that employers that offer DailyPay to their employees see:
- a 41% increase in retention for users
- 73% of users who said they are more motivated to come to work
- People who are 1.9 times more likely to apply for a job that pays daily
Recruiting and retention rates improve when an organization successfully responds to an employee’s personal needs. We’ve found that by breaking from the mold of a traditional pay period, employees become increasingly responsive, appreciative and eager to remain a part of the team.