Turnover among executive directors is a sore subject in the senior housing industry, but one provider has managed to keep turnover at an all-time low—zero. Now, the company is entering a growth phase and hopes to prolong that perfect streak even with more communities.
Arcadia Communities, a Louisville-based senior living owner/operator with five communities in Michigan and Kentucky and plans to open more developments in Kentucky and Tennessee, has done the unthinkable by maintaining its same management team for more than a decade.
Some of the biggest senior living real estate owners and operators have singled out ED turnover as a challenge. Chicago-based real estate invest trust (REIT) Ventas Inc. (NYSE: VTR) has struggled with high turnover rates among executive directors at properties in certain major markets. Not only is it costly and inefficient, turnover has a real impact on occupancy and potentially overall earnings. Brookdale Senior Living (NYSE: BKD), the nation’s largest senior living operator, recently placed reducing turnover at the top of its priorities in its earnings call. The provider struggled with high turnover rates at the community level following its merger and integration with Emeritus, although it recently has touted success in re-hiring some of EDs.
Contrary to much of the senior living industry, Arcadia has been able to buck the turnover trend entirely.
Since 2004, the company has had no turnover in its management team, according to Brian Durbin, president of Arcadia Communities. Over the years, Arcadia has sold some properties, but turnover within its remaining communities has been zero among executive directors.
“We really try give great support to our executive directors and provide them with the tools they need to be successful,” Durbin told Senior Housing News. “We’re very careful not to overburden our teams with a ton of reports and other exterior demands from ‘corporate’ and really try to keep the outside noise, if you will, to a minimum so they can focus on the things that really matter in our business—quality care and staff, family and resident relationships.”
Part of this close approach is linked to Durbin’s days as an executive director. Prior to joining Arcadia, Durbin worked in operations at Atria Senior Living and also has experience with ResCare.
“I spent many years wearing the executive director hat and know the demands and challenges of that position,” he said. “I think that experience helped shape my perspective of the type of support we should be offering to our executive directors and their team members.”
Specifically, executive directors report directly to Durbin with a once weekly operations report. The company also has support center systems to see what is going on within each community from a sales, marketing and operations perspective, which helps cut down on the need for additional reports from management. In addition, the executive directors are part of a unique profit sharing incentive program that helps foster a mindset where leadership “treats the community as if they are the owner.”
“I feel like our executive director’s appreciate the autonomy and empowerment they are given to run their community and we encourage them to try new and creative ideas within the community,” Durbin said. “I’ve fond that empowerment has led to increased job satisfaction and increased buy in to the company.
Growth Presents Challenge
While the small company has retained most of its management team for more than a decade, there may be greater challenges ahead as Arcadia grows. Currently, the company is working on several developments and will “more than double in size over the next 18 months,” according to Durbin.
“We’re in a pretty significant growth pattern right now,” he said. “We’ve been pretty active with developments and working ourselves to grow. The acquisition market has been challenging with REITs and private equity gobbling it up. We elected to go out and find some markets we felt good about and filled up our development pipeline to bring those through construction.”
The new developments will offer a mix of independent living, assisted living and memory care dwellings, in accordance with Arcadia’s current communities.
As the company grows, the advantages of its close culture could be tested.
“We’ve been very fortunate to have retained the great majority of our executive directors and management team members thus far in our development,” he said. “It is a bit easier as a small company to get to know our team members as people, and we certainly hope to keep that family feel as we grow.”
To retain staff going forward, as well as attract new talent as the company continues to expand, Arcadia is rethinking some of its benefits, Durbin said.
“The labor market is changing, and finding the right persons to serve our communities is increasingly more challenging,” he said. “We’re doing the same types of things that many of or counterparts are doing in the industry, including an increased focus on training and team building, evaluating and adjusting our wage scales, embracing technology as a support tool, as well as fine tuning our benefits packages to remain competitive and meet the needs of our employees.”
Written by Amy Baxter