When it comes to margins, the little things matter. Arrow Senior Living CEO Stephanie Harris has seen this play out firsthand in the St. Louis-based company’s portfolio of 29 communities.
In 2023, Harris and the other leaders at Arrow are laser-focused on certain metrics that, in piecemeal, could make a significant difference in the company’s overall margins. That is why the company is now engaged in becoming “leaner and meaner than we’ve ever done before,” Harris said.
“We’re now having to figure out new ways to not only work for debt service, but also how to provide a return for investors,” she told Senior Housing News.
Harris sees a big opportunity for the St. Louis-based company to return to its roots as turnaround specialists in 2023. She is keeping a close eye on two metrics in particular: length of stay and staff turnover.
Regarding length of stay, she believes that even one fewer move-out can make a big difference to the bottom line over time. Saving just one resident from moving out and forestalling the need to move another in can save the company as much as $7,000 to $10,000 per month, she said.
“That is going to be a key way to drive profitability,” she said.
One way Arrow gets and keeps residents is through its rates, which are close to the middle-market at about $4,500. Harris said she has noticed that residents can be swayed to move in for a difference of as little as $500.
“The movement of about $500 is what really widens the bell curve of opportunities for people to afford senior living who maybe once never considered it as an option,” she said.
Keeping rates as low as possible requires a keen eye for detail and expense discipline, down to the minutes and cents.
Harris noted that industry operators often brag about the number of communities they’ve added in a year — “but I’m hoping that … a year from now, Arrow will be able to brag about minutes saved,” she said.
The company also has worked to tailor its resident experience to what residents actually want. Arrow surveys residents regularly using partner Activated Insights, which is now part of Home Care Pulse.
The key to resident surveys isn’t to hold them at regular intervals, Harris said. Instead, Arrow keeps feedback flowing “on a regular loop.” She envisions the process working like visiting a local business and seeing a QR code with a sign reading “How is my service?” attached to it.
It’s no secret that keeping one associate from quitting each month and preventing the need to hire and train another can add up over time.
Arrow Senior Living management noticed that turnover was particularly high when an employee has not yet completed their first 30 days on the job. In fact, turnover for those workers was three-and-a-half times more likely to quit than workers in similar roles who have stayed on past that point.
Harris said the company’s leaders have in response re-examined Arrow’s process for welcoming employees and onboarding them. Like many other operators, they have worked to stop the use of agency staffing wherever possible.
Many of the workers coming to Arrow Senior Living have come from a gig-economy background, and likely have worked jobs where they had more control over when they worked and for how long. That is another challenge.
“But, even [small] improvements in those categories, I think, are going to be more meaningful to creating better staffing in our industry, as well as overall retention,” Harris said.
Arrow is also taking work off the plate of associates wherever possible by embracing automated processes, including through machine learning and AI.
At the end of the day, the so-called little things are some of the hardest to affect. But they are also some of the most important for senior living operators looking to thread the needle in 2023.
“We have to care about the major and the very minor details to be successful,” Harris said. “And we’re looking to make the next 12 months about being the best version of ourselves.”