Wages for senior living employees in the last four years have risen dramatically but in 2024, operators are reporting slightly lower wage increases compared to past years. And executives are still struggling with staffing issues, including the effectiveness of compensation in driving recruitment and retention.
That’s according to a Ziegler CFO Hotline survey conducted last month spanning nearly 250 senior living and care organizations, most of them nonprofits. The Chicago-based investment bank has taken surveys of executives on various issues to help gauge the pulse of the industry’s most pressing issues.
The report comes as staffing issues remained the “top challenge” to senior living operators in the early part of this year.
Wages reported during last year’s employee compensation survey increased 4.43% from 2022 compared to an expected increase to employee wages of 3.64% in 2024, the survey found, with a maximum increase of 11.5% and a minimum of no wage increase.
The report’s comment section spells out some of the challenges operators still face in attracting and retaining new staff, with one executive writing that it “never seems as though we can do enough” in regards to increased efforts on staffing.
“We raise payroll to what our consultants say is a competitive wage until we have staff leaving for $1.25 / hour for the same job somewhere else. We offer significant sign-on and referral bonuses and then staff bide their time till they qualify for the entire payout and then a week or two after they leave. So frustrating,” the same executive wrote.
It’s forced other operators to rethink their positions on employee benefits and compensation.
“Given the dramatic changes in labor & wages over the past 3 years, the Organization is currently conducting a compensation study through an outside firm and making appropriate adjustments as identified,” the executive told Ziegler.
Another executive wrote saying their organization would explore new ways to “incentivize retention among unit managers, developing (through training) interpersonal skills among managers around conflict resolution.”
Staffing costs and employee compensation packages are typically an operator’s biggest expense, and that share remained substantial in 2024 with the average total budget spent on employees at 55.7%, with the highest percentage of 87% and lowest being 15%.
Amid rising wages, senior living operators appear to have less of an appetite for offering an attendance bonus for staff with 42.7% of respondents noting their organization does not offer an attendance bonus, with 36% offering a bonus for filling an open shift and 23% offering a bonus for short-notice coverage of a shift, the report found.
Nearly three-quarters of respondents reported having a resident-funded year-end holiday bonus account for employees with 71% having a resident-supported structure compared to 28% without that type of bonus. That comes as 53% of respondents said employee bonuses were dispersed via payroll compared to 44% not using payroll to fulfill bonuses.
A resounding 92% of respondents said their organizations offered a company match for 401(k) benefits, followed by 69% with a vesting interest in employee 401(k) plans. Other bonuses, outside of wages, offered by employers included: shift-differentials and employee reimbursement for various aspects including education, daycare and travel expenses. Sign-on bonuses and referral bonuses were also mentioned, the report noted.
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