Wage growth is slowing as labor begins to stabilize in continuing care retirement / life plan communities, assisted living communities and nursing care facilities, according to Fitch Ratings latest monthly labor dashboard for the sector.
Year-over-year average hourly wage growth among CCRCs, assisted living communities and nursing facility employees slowed to 5.72%, 1.64% and 4.90%, respectively, as of February. Wage growth for the same time period in 2022 was 12.37%, 11.55% and 11.54%, respectively.
CCRCs have kept ahead of the wage growth by passing the costs through increased revenue and monthly entrance fees attributed to increased occupancy, Fitch said.
CCRCs with a significant skilled nursing component, which tend to be rated lower than those with a smaller skilled nursing factor, may experience additional pressure given that they are limited in their ability to raise rates because much of their income comes from governmental payers, Fitch Ratings Director Richard Park said in a statement Tuesday. Their ability to compete to recruit and retain nurses and aides also is limited, he said.
The healthcare and social assistance sector, as the Department of Labor defines it, is still dealing with high staff attrition. Quits in the sector remain high at 2.7% as of February, compared with the 1.6% average from 2010 to 2019.
CCRCs “and communities with a significant skilled nursing component are expected to continue managing costs/skilled nursing census and investing in productivity improvement tools to enhance margins while maintaining service quality,” Park said.
Overall payroll data suggest that the nation’s overall economy is slowing, according to the March ADP National Employment Report produced by the ADP Research Institute in collaboration with the Stanford Digital Economy Lab.
“Employers are pulling back from a year of strong hiring and pay growth, after a three-month plateau, is inching down,” ADP Chief Economist Nela Richardson said in a statement.
