Tackling the Senior Living Staff Revolving Door Nets Providers Huge Savings

| April 30, 2013

Decreasing staff turnover rates is a huge challenge for senior living providers that can be very worthwhile in a variety of areas, ranging from employee satisfaction and performance to resident health outcomes and even a community’s bottom line.  

Turnover in senior living settings plays a significant role in a community’s operational and financial health, as labor costs consume 50-70% of a senior living provider’s operating budget, according to staff scheduling and shift management software provider OnShift. Operators often find that when turnover rates drop, savings increase—but staff retention can’t exactly be described as easy. 

In fact, staff turnover is one of the top challenges faced by senior living providers, according to Marti Bowman, vice president of marketing at OnShift.

“When you see a revolving door among your employees, there is certainly a cost issue,” says Bowman. “[Turnover] can create a ripple effect throughout the industry.”

High turnover rates translate to higher costs for senior living providers who have to find and train new workers when employees leave.

Recruiting and training new employees to replace a worker costs senior living providers in the neighborhood of $4,000 to $5,000 each, Bowman estimates.

The industry average for staff turnover rates among continuing care retirement communities (CCRCs) is 34%, but one CCRC has been able to achieve a much better rate with positive financial results.

Santa Marta, a community in Olathe, Kans., had a 26% turnover rate in 2011 that dropped still further to 17% in 2012—half the national average.

The CCRC’s executive director, Chet Surmaczewicz, has found that it costs anywhere from $2,500 to $3,700 to recruit and train an employee for a senior living community.

Santa Marta is already realizing the value of significantly slowing the revolving employee door: the nearly 20% drop in staff turnover over those two years has netted $106,000 in cost reduction for the community, according to Surmaczewicz. 

OnShift emphasizes the importance of senior living companies maintaining a low turnover rate, especially considering the shortage of qualified healthcare workers in the nation.

“It’s a big issue—not just turnover, but the stability of your workforce at a time when you need more hands on deck,” says Bowman.

Surmaczewicz, who has a background in hospitality when he worked in the hotel industry for Ritz Carlton, believes that a lot of Santa Marta’s success can be attributed to the community’s employee culture.

“The foundation was really forming an understanding with the management team by giving staff members an opportunity to utilize skills and communicate with one another,” he says. The understanding could be as simple as acknowledging a community’s mission statement, and it could be beneficial to residents as well. 

Residents with higher acuity care needs can be impacted the most by turnover rates and staff retention, says Becky Lockner, director of senior living, development and innovation at Holleran, a consulting firm with a focus on senior living, health systems and human service providers.

“There is a link between engagement and quality improvement,” says Lockner. “When you have engaged staff, they are looking to improve quality of care and better communication with residents and parties and are not simply just ‘showing up.’”

This connection becomes critical when dealing with human lives, she says, by having someone cater to an individual’s needs 1-on-1, especially in skilled nursing settings.

“It takes a while to get to know the needs, wants and preferences of a resident,” says Lockner. “That’s why providers need people with longevity who know these residents to better cater to their needs.”

Written by Jason Oliva


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Category: Senior Housing

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