Kisco Senior Living CEO: This is Toughest Labor Environment in My 30-Year Career

Building a solid pipeline of top talent is the top 2020 goal for Kisco Senior Living Founder, President and CEO Andy Kohlberg.

Current labor challenges are unlike anything that Kohlberg has seen during his 30 years in the industry.

“This is the toughest labor environment in my entire time in the industry,” he told Senior Housing News.

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Like everyone in the industry, the Carlsbad, California-based owner and operator has had to contend with a tight labor market and wage pressures from within and outside the industry, and is taking steps to meet these unprecedented challenges. Kohlberg is also setting ambitious goals, including 95% retention of top talent.

A former professional tennis player, Kohlberg entered the senior housing space in 1990 and founded Kisco with his family. The company added a management arm in 1995. Today, Kisco’s portfolio toals 20 communities in California, Florida, Hawaii, North Carolina, Utah and Virginia. Last year, Kisco announced a pilot partnership with senior living tech company K4Connect, implementing smart home technology and introducing Amazon Echo devices into units. While Kisco is getting on the leading edge of voice technology, Kohlberg believes that disruption will come gradually to senior living over the next decade.

This interview has been edited for length and clarity.

How has Kisco changed since you founded the company 30 years ago? What are its competitive differentiators?

Our discipline [in growth] and size is one advantage. We’ve also been family-owned since day one. This gives us an advantage versus larger corporate companies, as we understand how locally driven this business can be. Our focus and approach allows us to have warmer family environments, and creates a more inviting culture for staff, residents and their families.

How intensely is Kisco feeling labor challenges? Has the company put in place initiatives to control expenses and reduce turnover?

It’s a huge issue for all of us [in senior living], and we’re not immune. Hiring and retaining top talent is our top priority. We’ve been using software to improve hiring processes and management of labor.

What software platforms is Kisco using?

We use Dayforce company-wide in our human resources departments for scheduling and labor management, ICIMS for associate recruitment, and we’re working on ways to automate the processes. One of our goals is to retain 95% of top talent that we identify.

We have an annual talent review process of all managers at Kisco. Out of this process comes names of people identified as top talent and then we want to retain 95% of those managers. Over past 5 years since we started this, we’ve met or exceeded the 95% retention goal for top talent.

To what extent has new supply hit Kisco’s markets? Has it hurt occupancy and pricing?

It’s hard to generalize, since we view ourselves as a local business. We do have a few markets with some oversupply, but it hasn’t hurt us significantly. Our portfolio occupancy is consistently around 92% to 93%. 

Can you share any updates on Kisco’s Alexa pilot with K4Connect?

We’ve changed some of the voice recognition products, and we’re waiting for full implementation of that, then we’ll do the rollout. We’re piloting a couple of [Amazon Echo] products, with K4Connect software that overlays on the Alexa [ecosystem]. 

A few years ago, Kisco announced a CCRC acquisition strategy. How has that fared?

We only bought one: La Posada [in Palm Beach Gardens, Florida]. We did an expansion which was well received.

As for other acquisitions, we’ve looked at several opportunities that we never moved forward with. This was usually a function of pricing, as well as the markets these communities were in being unable to support a CCRC. A number of communities have a continuum minus SNF. And continuum [of care] is important to strategy.

We also built a rental CCRC [The Cardinal at North Hills in Raleigh, North Carolina] which has been close to fully occupied for over a year.

You also had a strategy to develop senior living as part of master-planned communities, how has that proceeded?

We just acquired land in Gaithersburg, Maryland and plan to build a 300-unit senior living community. As for future developments and acquisitions, we want to stay in the markets where we already have a presence: northern and southern California; North Carolina and parts of Florida. Washington, D.C. is a new market, but we want to densify in our existing markets.

What are your thoughts on the next 10 years as a “decade of disruption” for senior living? How do you think the industry needs to change to meet boomer expectations?

It won’t be a rapid or some tectonic shift. I believe it will be gradual. The seniors who will enter the space will require more choice, like dining venues and programs, and more wellness options. [The disruption] will be a slower shift and not radical.

I believe we will see a bifurcation of true independent living [residents] who will not want to move to higher acuity communities. There will be an uptick in true independent living communities with good wellness programs.

What are your thoughts of the growing trend for age-restricted senior apartments, and would Kisco ever entertain building or acquiring senior apartments?

We actually built three senior apartments 10 years ago; we don’t have them anymore.

I didn’t think there was a big overlap between senior apartments and independent living. It’s a different product targeting a different resident profile. The overlap [in interest in both] was around 3% to 5%, which was what I expected. It might jump to 5% to 10%. What we’ll mostly see is more and better differentiation of the product.

Looking ahead to the rest of 2020, what are your top priorities?

Our main priority will be dealing with our labor challenges, focusing on the expense side of our ledger and recruiting top talent.

Overall, I believe the next three to four years are pretty positive [for the industry]. There will be some headwinds, but supply is abating and the industry will be doing well [by that time].

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