Top Stories

How $25 an Hour Caregivers Could Solve Occupancy, Workforce and Profitability Challenges

admin100's picture

By Steve Moran

We have this belief that we cannot afford to pay much more than minimum wage for our frontline team members because to do so would mean either the community would go broke or have to raise rates so much that they would lose residents and be priced out of the market.

But what if this were not really true?

Because maybe it’s not!

I am going to confess that as near as I can tell, this is all theoretical. I am not aware of anyone trying this. However, if you have or know someone who has, I would love to chat.

4 False Underlying Assumptions

Every senior living community operates under 4 assumptions that I think -- though I can’t prove it -- are false:

  1. That because of the nature of the work, the quality of care provided by a $25 an hour team member and a $13.00 an hour caregiver is more or less equal.

  2. That whether a caregiver is paid near minimum wage or a high wage, the amount of work they can produce will be more or less the same.  

  3. That the cost of employee churn and agency staffing is not big enough to be offset by paying caregivers $25 hour.

  4. That the quality of caregiving and caregiving staff will not measurably improve occupancy.

What If?

So here is what I am thinking would happen if we started paying caregivers $25 an hour:

  • You would get a very different class of employees. You would be paying enough that it would be a real career. You would probably lose a few more team members to upward mobility (which is something to be proud of). You would never lose them to the community down the street for a quarter or even a dollar more.

  • I believe they would work harder and smarter allowing them to serve more residents and have better resident interactions.

  • Recruiting would be a breeze because you would be getting the best of the best and they would be standing in line waiting for an opening at your community.

  • Agency cost would go to zero or near zero because who would want to miss a $ 25-hour shift? They would also know that you are not going to tolerate the stuff you tolerate now because you feel like you have to.

  • With higher quality team members they will be happier and less stressed, residents will feel it, other workers will feel it. It will all translate to happier and healthier residents. In other words, an amazing culture.

  • Amazing cultures always translate into high occupancy.  And . . . those last 2 or 6 units are almost pure profit. It would take just a little of that profit to make that massive jump in wages.

What am I missing here?

  Categories:

If you like this article (or even if you don’t) it would be a great honor to have you subscribe to our mailing list HERE

Comments

More Like This