Senior Living Staffing Outlook Improving as Industry Faces ‘Uphill Battle’ for Workers

While labor challenges have plagued senior living operators more severely during the Covid-19 pandemic, there could be light at the end of the tunnel for some as positives emerge.

While staffing still makes up the largest part of the company’s budget, labor pressures are beginning to ease due to reduced agency staffing costs and overtime as communities normalize from the pandemic’s disruption, according to MBK Senior Living President Jeff Fischer.

“We’re looking at every single option and it’s not an easy thing to do to grind down those costs,” Fischer said this week during a webinar hosted by Marcus & Millichap.


Fischer said MBK hasadded recruitment resources for communities and has since seen modest gains back by filling open positions companywide.

While last year saw a steady increase in agency staffing costs, San Clemente, California-based CareTrust REIT Senior Vice President of Investments Eric Gillis said agency labor peaked for the company’s operating partners in the third quarter of 2022, which “helped expenses even with rising wages.”

One thorn in the side of operators has been wage compression on margins, and for some operators that’s caused major challenges. At Anthology Senior Living, payroll costs increased consecutively in 2021 and last year, from a 5% increase in 2021 to a 9.5% increase in 2022 that was “in-line with inflation,” according to Anthology Senior Living Vice President of Capital Markets Joe Marinelli.


“That’s allowed us to compete for staff in a tight labor market and match rate increases with wage increases to offset and retain margins as much as possible,” Marinelli said. “We’re having success on the labor front.”

Anthology has been able to draw on success in hiring experienced senior living employees at all care levels, while increasing the number of young people who are entering career fields for the first time. The company’s confidence on the labor front could also lead to Anthology expanding its market reach, Marinelli said, noting the company is looking to grow in regions that compliment its existing portfolio and to new regions that “support demand fundamentals and that have easier labor markets.”

Between 2021 and 2031, health care occupations are projected to grow 13%, much faster than other occupations in that timeframe, the U.S. Bureau of Labor Statistics reports.

“Probably one of the most impactful things that is affecting the senior housing market is what’s happening with jobs as a whole,” said Marcus & Millichap Senior Vice President of Research Services John Chang, who added that the nation had “fully recovered” the number of jobs lost during the pandemic bringing back 23 million positions.

In 2022, 4.5 million jobs were added, BLS data shows, the second-highest number of jobs added in a single year in U.S. history behind 2021. But one of the biggest obstacles to future growth on labor is the possibility of a global recession, with Chang noting that Marcus & Millichap forecast the market adding “only 700,000” new jobs.

“We are factoring in a little bit of a recession this year,” Chang said. “But nonetheless, we’re still seeing some really positive momentum. Some areas are getting a lot more jobs than others and senior housing is still … facing an uphill battle.”

Outlook for demand strong

With demand strong for senior living, the leaders on the webinar saw even greener pastures ahead based on seismic demographic shifts expected in senior living over the coming years.

Chang said senior living was “on the leading edge of the curve” as demographics shift and the U.S. population ages over the coming two decades.

“With the wave of demand coming, there’s ultimately going to be a supply-demand imbalance, especially with the recent drop-off in development,” Chang said.

For CareTrust REIT, Gillis said the trust is looking towards the growing demand seeing operators with senior living experience and local market knowledge. Marinelli also touted Anthology Senior Living’s 18 new communities completed over the last six years.

“We want to partner with operators that are forward-thinking and we want to work with them to develop programs for the next generation,” Gillis said.

In the year ahead, Fischer said MBK will continue retrofitting and renovating communities to bring them up to speed to offer new services and amenities for residents in anticipation of the baby boomers’ arrival.

“When you look out over the horizon, there’s an opportunity that’s demographic-driven,” Fischer said. “We’re going to come out stronger and the industry isn’t going anywhere.”

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