Brookdale Senior Living President and CEO Cindy Baier.
With eight consecutive months of occupancy growth, including the largest average occupancy increase in “at least the last six years” during the third quarter, Brookdale Senior Living is “firmly on the road to recovery” from the coronavirus pandemic, President and CEO Cindy Baier said Friday on the third-quarter earnings call of the country’s largest senior living company.
From the second to the third quarter, occupancy at Brentwood, TN-based Brookdale’s communities grew 210 basis points (2.1%) on a stabilized basis, greater than the 120 (1.2%) basis points reported for the industry by the National Investment Center for Seniors Housing & Care, Baier said. It’s the second quarter in a row that Brookdale outpaced the industry, and the company expects occupancy growth from the third to the fourth quarter as well, she added.
At the end of the quarter, weighted average occupancy was 72.5%, up from 69.6% at the end of the first quarter and 70.5% at the end of the second quarter, according to supplemental data released in conjunction with the earnings call. Weighted average occupancy was 73.3% at the end of October, according to the company.
“In addition, our move-in recovery exceeded historical normal levels, with September exceeding 100% of the three-year average from 2017 to 2019,” Baier said.
Labor market is ‘intensively competitive’
The “intensively competitive” labor market continues to present challenges for Brookdale, as it does for other operators, the CEO said. The pressure is especially evident in nursing and hourly positions, she said.
Labor expenses were higher in the third quarter compared with the second quarter due to the need for contract labor and overtime, as well as for the training necessary for new employees, Baier said. Hiring to fill open positions is a key priority for the company, she added.
Brookdale saw an increase in employment applications once the federal supplemental unemployment benefits ended, Baier said. Additionally, fewer people now are providing inaccurate information on applications or not showing up for scheduled interviews, she said.
“We’re actively reviewing wages and adjusting them where necessary to remain competitive,” Baier said. “Our belief is that as we do this, we will be able to reduce contract labor and overtime. But it’s going to take a little bit of time, and we still do expect to see those being elevated in the fourth quarter.”
Progress on turnover reduction was evident in September and into October, she said.
The retention rate for community executive directors remained approximately 70% in the quarter, and about two-thirds of those in such positions have been in their roles for more than two years, Baier said.
Vaccination helps move-ins
Approximately 94% of employees are at least partially vaccinated against COVID-19, excluding those who have been granted religious or medical exemptions, the CEO said, adding that the resident vaccination rate is 95%.
“The high vaccine acceptance rate for our associates is a very important accomplishment, since residents, their families, prospects and healthcare professionals expect us to do our part to help protect those in our communities,” Baier said. “We believe that seniors are more apt to move into our communities when they know both residents and associates are vaccinated.”
The CEO said that the company is “grateful” for the levels of COVID-19 vaccination already reached internally ahead of a Jan. 4 vaccination deadline announced on Thursday by the Department of Labor’s Occupational Safety and Health Administration. Under the federal emergency temporary standard, U.S. companies employing 100 or more workers must develop, implement and enforce a mandatory COVID-19 vaccination policy unless they adopt a policy requiring employees to choose to either be vaccinated or undergo regular COVID-19 testing and wear a face covering at work.
“I think we’re in great shape as relates to the vaccine mandate,” Baier said, adding that “a vaccine mandate is good for our residents and our associates.”
The CEO had announced Brookdale’s own COVID-19 vaccination requirement for its approximately 35,000 workers during the company’s second-quarter earnings call in early August.
