With Great Senior Housing Opportunity Comes An Even Greater Threat

by Andrew Carle

The biggest news for the senior housing industry moving forward is that, by 2050, there will be more people worldwide over the age of 60 than under the age of 15 for the first time in our 300,000-year history as a species on the planet. As Baby Boomers have also been identified as likely the most “social demographic” in history, the related demand for congregate housing offers an unprecedented opportunity for both existing and new senior housing communities.

Now if we only had enough people to staff them…

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Welcome to the proverbial “mixed bag” where, by 2030, when the last of the U.S. Baby Boomers retire, the U.S. Bureau of Labor Statistics estimates there will be 35 million more jobs of any kind, than people to fill them. Even Starbucks relentless planetary takeover may come to a grinding (pun intended) halt without a barista available to mix the ingredients, push the “steam” button, and shout out your mispronounced name.

But Starbucks has nothing to worry about compared to long-term care.

I was recently able to participate on a Workforce Development Roundtable, hosted by the Assisted Living Federation of America (ALFA) and its new President, James Balda. In addition to conducting a master class on how to develop an organization’s long-term strategic plan, Balda’s national listening and learning tour has focused extensively on understanding not just the opportunities, but threats the industry will be facing in the next generation – with workforce development a primary concern.

What we know is that we essentially need to triple the number of the industry’s direct care workers (nurses, nurse aides, and related paraprofessional “hands on” caregivers) – in rounded numbers – from 2 million today to 6 million by 2030.

The problem, unfortunately, is the supply variable (see, “35 million more jobs than people…”) that quantifies our mathematical elimination from achieving this goal.

So the end game for senior housing providers is clear. The winners won’t be those who can build the most communities, it will be those who can staff them. And even as ALFA works to develop empirical benchmarks and best practice models to assist, the key is to focus on a few consistently repeated priorities:

1. Change Your Attitude. Unless you’re opening a new community and hiring from scratch the phrase “recruitment and retention” should be reversed as terminology.  With the Department of Labor estimating the replacement cost of a single employee at up to one-third his or her annual salary, the most valuable employee you will ever have is the one already on your payroll. “Retention” should be Job No. 1 for any provider, with recruitment for anything other than market expansion or retirement of existing staff viewed as a system failure, with measurable accountability.

2. Know What Your Employees Want. If you want to keep the employees you have then you also need to know what they want. And that want is not just “money.” Yes, wages need to be competitive, but in survey after survey, for industry after industry, “compensation” has typically fallen around the middle of the “Top 10” things employees want from their employers. The top items? “Non-monetary” currencies including feeling “in on things,” “being listened to” and “appreciated.” In one study, the turnover rate for nurse aides was reduced by one-third when the aides’ input in care plans was sought. And if we know the words “thank you” can be worth more than money – why don’t we use them more?

3. Think Outside The Box. In the coming years, senior housing providers won’t just be competing with each other for staff, they will be competing with every employer (including Starbucks). So addressing recruitment for either market expansion or replacement of retired staff will require playing chess while everyone else plays checkers.Enrollment in healthcare related professions is skyrocketing on college campuses. Conversely, surveys show that up to 70% of aging Boomers want to keep working at least part time in their retirement, with health care and retirement communities high on their list of preferences. Grassroots support and education of both these audiences on the opportunities presented by senior housing will match their interests — and place you ahead of the competition.

Finally, America’s largest competitive advantage when it comes to workers continues to be its place of “first choice” among immigrants. Talk all you want about building a wall on the border with Mexico…but you might want to put a door in it. The one area where the industry needs most to work together is a full court press for immigration reform, including major expansion of “guest” and “essential” worker visas for long-term care staff.

4. Use technology as a productivity accelerator. 80% of each car produced today is built by robots. If the senior housing industry can utilize both information and production technologies to make one nurse’s aide in the future as productive as three today, that’s how it will achieve the equivalent of 6 million workers from 2 million people. But to do that the industry needs to get serious. Forget fad gadgets and wiz-bang dashboards – if the technology can’t measurably increase the productivity of the average worker, or your reliance on him, it should be off your list.

People Who Need People

In any number of markets you can find a nearly new, high-end, high-amenity community confronting occupancy issues while a same market, older, and less fancy community operates with a waiting list. While it would be nice to have BOTH a beautiful community and wait list, the message from the consumer is clear. No senior housing community is any better than the people who work in it – from the administrator to the volunteer. Your residents and families rightfully want to know they will receive the assistance they need, from long-term employees they know and trust. No “senior tsunami” will change that, and no brass chandelier can replace it.

No staff, no seniors. The choice is yours.

Andrew CarleAndrew Carle is an award winning professor and Executive-in-Residence and Founding Director of the Program in Senior Housing Administration at George Mason University in Fairfax, Virginia. Mr. Carle continues to serve as a consultant to the senior housing industry, universities, and technology companies, with past and current clients including AARP, APPLE, Nintendo, and the Assisted Living Federation of America, among others.

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