In 2025, turnover and retention are among senior living operators’ biggest challenges. Some operators are dealing with it by taking cues from big companies like Costco.

Costco and other companies like Sam’s Club and QuikTrip have taken the approach that giving employees better benefits, pay and an accessible career ladder leads to better business outcomes at the end of the day. Although labor is the largest senior living operating expense, it is not a good practice to skimp on employee pay and benefits, according to Michael Karicher, chief people officer for Dallas-based Sonida Senior Living (NYSE: SNDA).

“[We’re] trying to adopt a little bit of the Costco model, and finding if we have people that are doing really great things, don’t be afraid to pay them very well and then put them on that career path,” Karicher said during a recent Senior Housing News staffing webinar.

Sonida is not the only senior living company with Costco on its mind. Welltower (NYSE: WELL) earlier this year publicized its efforts to renovate communities to include “Costco break rooms” equipped with new stainless steel appliances and flooring, cabinets and furniture.

Sonida, along with 12 Oaks Senior Living, have also recently bolstered recruiting and training in an effort to keep employees engaged and on the job beyond the crucial 90-day mark.For instance, 12 Oaks is shifting its staffing strategy in order to offer greater flexibility and new programming to help new employees feel like they belong by better understanding their needs and wants.

“Like a lot of people, we do struggle with retention and turnover,” said Melissa Labor, chief people officer at Dallas, Texas-based 12 Oaks. “We’re really looking to curb that and make a really good employee value proposition for wanting to grow their careers with us.“

Adapting the Costco model for senior living

National warehouse retailer Costco’s secret sauce is not just cheap hot dogs. The company is known for paying its employees a step above the national average, offering good benefits and investing in training.

Similarly, senior living operators can adapt the Costco model, at least in spirit, by rewarding high-quality workers with good pay and benefits that they want. Recruiting the right employees, then training them to be successful in their job, is a strategy that both 12 Oaks and Sonida have used to recent success. That may seem like a simple task, but it’s not as easy as it looks.

Sonida utilizes centralized recruitment from its Dallas office, but those recruiters have to be aligned with the company’s regional locations to better understand the differences in the recruiting pools. The process, Karicher said, allows for a “high touch” model with community leaders and hiring managers, which also leads to candidate satisfaction due to recruiters staying with them throughout the hiring process.

Karicher added Sonida doesn’t particularly recruit those with senior living experience either, and looks for those with “the ability to connect to others,” with a lot of inspiration taken from the hospitality sector.

12 Oaks spent 2024 shifting its focus to a centralized recruiting process as well. Recruiters were encouraged to spend more time within the company’s communities with regular meetings in order to build relationships within them, which Labor said is a part of 12 Oaks’ culture. Because of this approach, 12 Oaks was able to better determine what roles needed to be filled within its communities.

12 Oaks also has developed additional training for leadership, such as executive directors and resident care directors, using input the company’s executives collected in listening tours over the last 12 months.

That process led to the implementation of new bi-annual training sessions with community executive directors, resident care directors and sales directors.

“We provide some practical tools for them to take back … as well as training their other leaders on how to interact and really provide a great employee experience,” Labor said.

12 Oaks also in the last 12 months added a director of learning and development role to stay on top of employee feedback and help improve training as a result. The operator also is hiring an onboarding and employee experience specialist to work as a liaison between the operator’s corporate office and the communities it manages.

In response to feedback from employees, Sonida developed a new learning management system called Sonida Learns, which now has basic requirement courses available through provider Relias. Sonida is also in the process of developing its own content for the program.

Alongside building up its training materials, Karicher said Sonida is looking to hire a director of talent management and learning to help develop courses and pathways to help advance staff members through the company in 2025 and beyond.

Sonida is trying to improve the wages and benefits for employees to promote stronger retention. Karicher said the goal is to build up employees so they have a career with the company, and the HR team is currently undergoing an assessment of its pillars of benefits, including medical, mental and financial, and using them as a retention tool.

Labor noted 12 Oaks completed a reassessment of its benefit options and found employees wanting stronger mental health benefits. To accommodate this, the company rolled out a new program which offers an app for employees to check in on their general wellbeing, allowing leaders to get a better insight into their needs as well. Alongside this, the assessment found single parent employees were largely not on the company’s insurance plan, which led to a change in the cost structure to make it more affordable for them.

Although 12 Oaks currently does not have clear career paths in place for staff members, the company has launched a new pilot program to help executive directors support regional vice presidents and gain new skills with an eye on career advancement.

“We’ve really gotten good feedback on it, so I think this will be something that we will continue to do,” Labor said.

Getting workers past the 90-day mark

It’s no secret that senior living workers who stay on the job past 90 days are much more likely to stick around long-term. The challenge for senior living operators is keeping workers from leaving for other opportunities.

Both 12 Oaks and Sonida have sought to connect with employees faster and develop a connection that grounds them to the organization. Both companies’ efforts hinge on mentorship and training.

Sonida is launching a new program called “Sonida Cares,” in order to entice more of its new hires to stay long-term. The company assigns mentors to new employees and performs frequent early check-ins – starting at day five, then about every 15 days – as part of the program.

“The sooner you can get them to make that connection, that doubt leaves, and then they start really engaging and becoming more aware of their environment and wanting to be part of it,” Karicher said.

12 Oaks is also rolling out a corporate check in program to help community leaders know how they can check in with staff.

“We really see this as an opportunity for us to help coach our leaders so that they can, then in turn, help build that employee experience, so that people are feeling it from the beginning,” Labor said.

Alongside focusing on creating emotional connections between staff and residents, 12 Oaks is focusing on enhancing emotional intelligence for leaders within the organization. The idea is to help leaders better connect with their staff and better recognize when they are unhappy with their positions, Labor said.

Labor added 12 Oaks communities are using a buddy system for new employees, and the hope for the coming years is to allow for more consistency in what that system looks like, though it will still be tailored to fit the identity and needs of individual communities.

“We’re diving into our exit interviews and trying to understand that perspective of it. On the front end, we’re doing some new hire surveys too,” Labor said. “Data is really a key piece for us this year, so that we can help us understand what direction [and] what actions we need to take.”