Consensus exists in the senior living industry that COVID-19 delivered a temporary setback in the industry’s growth, according to a special issue brief from the American Seniors Housing Association.
“The State of Compensation in Seniors Housing: Optimism and Opportunism in the Face of a Long and Challenging Recovery” found that companies continue to grapple with increased operating costs, lack of new sales and an overburdened workforce. But the senior living industry also is using “creative solutions to selectively add talent while retaining and motivating current staffs.”
“The compensation data and emerging trends discussed in this brief provides industry leaders with practical information that will help them navigate a critical aspect of the business during the most challenging period in the history of seniors housing,” ASHA President David Schless said.
Sixty-seven percent of respondents to the survey, conducted by executive compensation consultant Pearl Meyer, reported they expect to expand their workforce. This compares with 69% of 2019 survey respondents projecting a workforce expansion.
Companies with strong leadership and carefully structured compensation programs will outperform their peers, according to the report.
The majority of respondents projected organization-wide increases to base salaries for 2020, although those increases were expected to be more conservative than the year before. Overall, 82% of respondents reported expected employee base salary increases for 2020, as opposed to 90% in 2019. Those salary increases were expected to range between 2% and 4% at the function-head level and below. In addition, 70% of respondents projected similar increases for executives.
Six percent of companies reported expected salary decreases for executive management and function-head levels. Those decreases were attributed to voluntary salary cuts in response to pandemic-related uncertainties.
More than three-fourths of survey respondents (76%) also reported maintaining a cash bonus program, of which 13% were solely discretionary. Those programs were concentrated among senior management. Bonus programs are increasingly reaching the lower levels of organizations, however, with more half of mid-level and 38% of junior-level professionals eligible for short-term incentive opportunities.
In a same-store analysis of participating companies from the 2019 and 2020 ASHA compensation surveys, evidence showed that increasing pay competitiveness in senior living, with base pay across all positions increasing 7.8%. The strongest growth was among functions where industry-specific knowledge was crucial to job performance, such as development and executive leadership, rather than more generalized functions, such as accounting / finance and human resources.
Highlighting the increasing competition for top executives, base pay for the top three leadership positions — CEO, chief operating officer and chief financial officer — grew a combined 13.9%, whereas combined increases for other top executive team members grew at a slower 10.2% rate.
The report also looked at five top trends for 2021, including shortened performance cycles and mid-year or quarterly bonus opportunities; caution surrounding executive payouts and grants; upgrading talent at below-market pricing; continued discretionary payouts for retention and morale; and compensation strategy alignment.
Copies of the special issue brief are available through the ASHA bookstore.