Algorithms can help address a crucial senior living issue

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Mike Rosenbaum
Mike Rosenbaum

In my conversations with executives of leading senior living providers, I have found that most of them are focused on similar strategic objectives: increasing their market presence, streamlining their business, improving resident satisfaction and attracting and retaining the best talent.

Taken together, it is clear that one of the most significant factors that affects a provider's ability to achieve these goals is its people. Finding a particular person who fits best, will stay and will perform well in a particular role in a particular department in a particular facility can seem like a small decision, but when considered for all roles across the provider organization, the savings can add up to millions of dollars per year. Making improvements in each of these small decisions makes an enormous impact on a provider's bottom line and in its ability to make residents' lives better by building a team that will provide an outstanding quality of care.

Although these decisions are critically important, innovation in the way senior living providers choose and deploy their teams has been limited. Many still rely on techniques that use skills, capabilities and personality assessments to build a profile of an ideal employee and then try to concoct some kind of test to measure whether applicants possess those characteristics. Others are relying on their frontline staff to make decisions based simply on resumes and applications.

We have seen that applying these dated practices to hiring and talent decisions leads is ineffective, so we have been rethinking how people are hired by asking ourselves, “What would happen if we were able to replace subjective biases inherent in the current hiring process with predictive analytics — algorithms — generated from large amounts of data?” We have developed a platform that uses modern data science to help providers find the right people for each role in each department at each location.

Senior living providers face a unique set of people challenges, according to Anna-Maria G. Palmer, senior vice president of human resources at Compass Pointe Healthcare System. “As employers, we compete in our local markets with companies in many different industries, so there is a broad mix of people who apply to work with our organization. To be successful, we must find and hire the applicants who have a passion for caring,” she says.

Compass Pointe, a Pegged Software client, has found that algorithms and people analytics can be an effective way to overcome these challenges, Palmer says. “Sometimes, the best candidates are not the most obvious ones based simply on resumes, experience or education, and collecting and analyzing the data allows us to predict who will fit best in each role, in each department, in each community, serving each resident,” she adds.

From a personal perspective, I have always believed that people are the key to business success and that starting with people should be a major focus. Early in my career, I was on a path to become an academic, and I focused on the application of data to the most subjective areas of human endeavor. My interest in the application of predictive analytics to talent grew out of that work, and in 2009 I met an executive at a hospital who asked whether I could help with the hospital's applicant shortage and employee retention. After some brief discovery work, we implemented the technology in that hospital and several others, and over the next 2.5 years, we reduced turnover by 45% to 77%. Today, we are deployed into more than 400 healthcare-related organizations and have a median impact of a turnover reduction of 38%.

When you consider that a significant portion of the total cost structure of a senior living provider is comprised of people, you start to see the incredible potential of applying predictive analytics to talent. Today, algorithms can predict the likelihood an employee will stay in his or her role, or be engaged in the mission, or provide care that results in a more healthful environment.

Providers are under tremendous economic pressures, and these algorithms can generate economic benefits and drive dramatic improvements in resident care and satisfaction. Senior living providers have an opportunity to capitalize on these innovations to meaningfully improve employee retention, quality of resident care and workforce engagement.

Mike Rosenbaum is CEO of Pegged Software.

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