Base Pay In Senior Living Rose 7.8% in 2020, Executive Salary Freezes Show Signs of Thawing

Base pay rose 7.8% across all senior living positions between 2019 and 2020, with stronger wage growth for positions in which industry-specific knowledge was crucial to job performance.

That’s according to the latest “State of Compensation in Seniors Housing” report from executive compensation consultancy Pearl Meyer and American Seniors Housing Association (ASHA). The annual survey is conducted between May and September, and this year’s report includes responses from 60 senior housing companies.

Among the top takeaways from the report is that, despite all of last year’s challenges, senior living providers still expected to grow their workforces and even increase base pay for employees.


According to the report, 67% percent of those surveyed expected to expand their workforce — a number that is only a slightly behind what it was during the same survey in 2019 (69%). Just 6% said they believed their workforces would shrink, which is below the 10% of survey respondents who said the same in 2019.

The report also showed that providers expected to increase employees’ base salaries last year, with 82% of employees expecting to receive an increase over their base salary in 2020. That is a decrease from the 90% of employees who said the same thing in the previous fiscal year.

Although much of the survey data was collected before last year’s biggest surge in Covid-19 cases, or the industry’s ongoing vaccination efforts, ASHA’s release this week frames the results for providers in 2021, and identifies five top trends in senior housing compensation for the year ahead.


Many senior housing companies have started to grade employees on shortened performance cycles, such as six-month periods, to offer more grounded performance expectations in a year that is hard to predict.

“We see a continued trend of firms shortening performance cycles and offering mid-year and even quarterly bonus opportunities until the industry stabilizes into a ‘post-pandemic’ norm,” wrote the report’s authors, Jon Boba and Davis Steinbrecher.

Another upcoming trend: a potential end to executive salary freezes, which many providers enacted to help lessen the financial blow of the pandemic. Some companies may opt for one-time cash or equity grants as recompense, but the report advises providers should take a “cautious response” when rolling back executive pay freezes.

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“Firms should not only ensure that they are financially stable enough to grant such a payout, but also that their operations have returned to ‘normal enough’ including the reinstatement for furloughed workers, so that they will not be seen as taking advantage of a situation in which the jobs of employees throughout the organization have been eliminated,” the report’s authors noted. “Likewise, any company that accepted money from various government Covid-19 programs should carefully consider the ‘optics’ of making extraordinary grants to executives.”

Another upcoming trend that the report’s authors think will gain even more steam in 2021 is “topgrading,” or the practice of “replacing incumbent ‘average’ performers with ‘A-level’ caliber talent,” according to the report. Discretionary bonuses — which just 13% of providers reported using in 2020 — are now on the rise as companies look to boost morale and retention.

The pandemic is also pushing many providers to reexamine and retool their compensation strategies. Specifically, they are asking questions about whether short- and long-term incentives still represent growth drivers, if they should change how they recruit talent, if they have the right leadership in place and whether compensation and benefits meet employees’ changing needs.

“The coming post-Covid era provides firms with the opportunity to assess their practices from the ground up and implement plan changes that may be long overdue,” the report said. “Forward-thinking firms are already taking these steps in 2021.”

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