Q: Will wage increases elsewhere affect me?
A: Yes, both now and later. The national minimum wage is currently $7.25 per hour. In early 2018, Walmart increased its minimum wage to $11 while adding new employee benefits. Amazon raised its minimum to $15 in November.
Walmart and Amazon are the top two private employers in the United States. The likely challenging impacts to most employers, including senior living, will be significant. Here are just three: 1) increased employee turnover and related costs, creating 2) hiring challenges and 3) reduced operating profit and cash flow.
You likely also will be pressured to raise hourly wages of some of your other lower paid employees. These employees typically expect to earn about $1 to $1.50 per hour more than their minimum wage peers. When minimum wages increase, so do the expectations of this employee group.
The solution involves three basic strategies: 1) reducing operating expenses you can control, 2) enhancing existing revenues and 3) optimizing organic growth through increased occupancy and expanded services within your community.