Sonida CEO: Modernizing ‘Archaic’ Senior Living Staffing Model Key to Success

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With a shifting outlook for the senior housing industry as a whole, the chief executive of Sonida Senior Living (NYSE: SNDA) is feeling good about the remainder of 2024.

The Dallas-based company also has undertaken initiatives to address some of the top challenges still facing the sector, notably staffing woes. Technology has enabled the provider to update its staffing model to tap into the benefits of the gig economy and change its workforce profile, with turnover for Sonida going down year-over-year.

That’s according to President and CEO Brandon Ribar, who spoke with Senior Housing News during the 2024 National Investment Center for Seniors Housing & Care (NIC) Spring Conference.

Among the recent positive movements for the company is a $50 million equity private placement, funded by the company’s largest shareholders including Conversant Capital, that allowed Sonida to buy back debt on its communities for a discount.

The capital that is left, Ribar said, will be used for a variety of purposes, including acquisitions and other growth initiatives.

“Some will be for capital in our own buildings, where we do a little more CapEx, but we’re definitely in the market looking for ways to grow,” Ribar said.

Among the main goals for Sonida this year is translating revenue growth into “real bottom line expansion,” Ribar said, noting that current occupancy trends are showing recovery and nearing pre-pandemic levels.

“I’m a big believer that this is a critical point for the industry as a whole,” he said. “But with that, I think the industry needs to be able to deliver pretty good margin growth … If we’re back at those [occupancy] levels [but] don’t have the same types of margins, it’ll be tough for people investing in the space to think … where am I going to go from here?”

As such, Sonida’s aim for the near future is to continue to build its business so it can further invest in new communities, with the goal to expand from the current 71 it operates. However, the industry itself is facing a variety of challenges that will need to be overcome moving forward.

Improving margins and labor

Ribar pointed out that Sonida’s last public report indicated that year-over-year margins had improved by seven percentage points, with the goal being to achieve margins in the 30% range. Factoring into that growth is the ability to continue raising rates while managing labor costs. 

“For us, labor is a massive component to running the business effectively. We want to have the best people, we want to make sure that we’re paying … more than our competitors,” Ribar said.

He added that with this mentality, the focus is also to run communities with smaller but “greater” staff. Additionally, Sonida has been utilizing more flexible schedules for its part time staff, allowing them to pick and choose their hours and the community they are working in for the day, made possible through a technology investment in a program called Stogo around three years ago.

So far, Ribar said, the program has been well received.

“They were developed at a hospital system, but it’s real-time scheduling,” he said. “And it also allows us to share staff across different communities.”

Rather than maintaining 25 to 30 part time staff on payroll, schedules from area communities are posted, and staff are able to elect where they are working in a way that is “accessing the gig economy.”

“It’s using technology to create a more efficient way for people to work part time, and then for us to not have to necessarily go and use more expensive third parties to fill those shifts,” Ribar said. “People love it. It’s kind of modernizing a relatively archaic staffing model … I think it’s getting us closer to where just the modern workforce wants to be in terms of just kind of flexibility.”

With the implementation of Stogo, Sonida saw a 10 percentage point decrease in staff turnover over the past year, which Ribar said is “very meaningful.” In addition, retention and stability in leadership positions has been on the rise as well.

“We’re getting a different type of team member as well, that … maybe is younger and has another job and wants to pick up shifts. So it’s expanded the network of people that are interested in working with us,” Ribar added.

Improving public perception of senior living

A current issue facing the senior living industry, according to Ribar, is the continued public perception of senior living, particularly following national media attention, such as the Washington Post’s coverage of elopements in memory care and assisted living communities last year.

“We have to make really good progress in people viewing senior living as a really nice alternative to ultimately living forever at home,” he said. “I think not only the grassroots efforts to build our reputation as an industry, but just getting residents and their families to do testimonials and sharing things on social media. Data is important. But we also want people to see what it’s like to be in a senior living community.”

A way the industry can shift the perception, Ribar added, is by getting people interested in moving in sooner. What Sonida is doing to challenge this issue is by continuing to invest in programming and additional technologies to keep families better connected.

Additionally, Ribar said the capabilities of artificial intelligence (AI) that are being developed will allow team members to respond earlier and better when a resident is at risk of a negative health event.

Looking ahead, Sonida is going to be focusing the development and stability of its leadership teams alongside improving the performance of its portfolio, particularly with new acquisitions that were underperforming.

“We’ve got to prove that, as we’ve done on a couple of occasions in recent years … you go and buy something that is underperforming, apply your model and see significant performance improvement,” Ribar said. “If you do that, on top of having a really strong base set of community performance, then we believe the sky’s the limit, and it shows the strength of the platform.”