Hiring and Labor Market Update

A lot of information has been published recently on the latest state of the labor market and hiring. Here are the highlights as it relate to agencies

  • 428,000 jobs were added in April, marking the 12th straight month of gains exceeding 400,000 (Labor Department).
  • Lower wage employers dominated the hiring market (Restaurants, hotels, leisure and hospitality).
  • Average pay has increased 5.5% in the last 12 months.
  • 63 million employees have been added in the last 12 months – an all-time record. However, the total 1.2 million employees are still missing compared with 2019. Vaccinations and higher pay has lured employees back, but child-care and early retirement continues to reduce the size of the available labor pool. The share of under 54 is about the same as in 2019, but the share of 55+ is down.
  • COVID fears continue to deter people from working. 3 million potential workers may fall into this group.
  • There were 11.5 million job openings.

Worried about retention? Amazon has a 100% turnover rate for hourly paid employees, according to the New York Times.

According to MITC data from 100 providers with 40,000+ employees:

  • Employee termination rates increased to 42.82%, lower than some surveys report but more than enough to cause significant problems for many providers. Surveys are generally not as accurate as real data.
  • However, for providers, turnover felt worse because many providers were unable to fill a record number of positions! The 100 providers had 1,635 more terminations than new hires during the year, the highest number since MITC started complying these statistics (4 years).
  • The rate of new hires was therefore lower than the termination rate at 36.12%.
  • Termination rates varied widely by provider
    • 4 providers had termination rates of over 8%.
    • 6 providers had termination rates less than 20% but these providers managed self-directed programs.

Providers need to update job descriptions and hiring follow up procedures. Software is not usually the problem; content and communication is often not adequate.

Extra Unemployment Pay Has Disappeared, So Why Haven’t the Workers Returned?

Earlier this year, a change came: $300-a-week federal supplement for unemployed Americans was cut off. Many people, they argued, would then take the millions of jobs that employers were desperate to fill.

Yet three months after half the states began ending that federal payment, there’s been no significant influx of job seekers.

In states that cut the $300-a-week federal supplement, the workforce has risen no more than it has in the states that maintained the payment.

That federal aid, along with two jobless aid programs that served gig workers and the long-term unemployed, ended nationally Sept. 6.

Yet America’s overall workforce actually shrank that month. “Policymakers were pinning too many hopes on ending unemployment insurance as a labor market boost,” said Fiona Greig, managing director of the JPMorgan Chase Institute, which used JPMorgan bank account data to study the issue. “The work disincentive effects were clearly small.”

Labor shortages have persisted longer than many economists expected, deepening a mystery at the heart of the job market. Companies are eager to add workers and have posted a near-record number of available jobs. Unemployment remains elevated. The economy still has 5 million fewer people working than it did before the pandemic. Yet job growth slowed in August and September.

An analysis of state-by-state data by The Associated Press found that workforces in the 25 states that maintained the $300 payment actually grew slightly more from May through September, according to data released Friday, than they did in the 25 states that cut off the payment early, most of them in June. The $300-a-week federal check, on top of regular state jobless aid, meant that many of the unemployed received more in benefits than they earned at their old jobs.

An earlier study by Arindrajit Dube, an economist at University of Massachusetts, Amherst and several colleagues found that the states that cut off the $300 federal payment saw a small increase in the number of unemployed taking jobs. But it also found that it didn’t draw more people off the sidelines to look for work.

A range of factors are likely keeping millions of former recipients of federal jobless aid from returning to the workforce.

  • Many Americans in public-facing jobs still fear contracting COVID-19
  • Some families lack child care
  • Early retirement
  • 700,000+ Americans have died plus some who recovered have long term COVID related issues

Plus not all employers are doing the best possible job to attract the applicants who are out there

  • Some employers lack transition and training plans to entice applicants from “other” industries
  • As the recruiting market has got more competitive, employers with out-of-date hiring systems and job posting content are losing out to competitors with state-of-the-art systems

The pandemic appears to have caused a re-evaluation of priorities, with some people deciding to spend more time with family and others insistent on working remotely or gaining more flexible hours.

Some former recipients, especially older, more affluent ones, have decided to retire earlier than they had planned. With Americans’ overall home values and stock portfolios having surged since the pandemic struck, Fed officials estimate that up to 2 million more people have retired since then than otherwise would have.

And after having received three stimulus checks in 18 months, plus federal jobless aid in some cases, most households have larger cash cushions than they did before the pandemic. Greig and her colleagues at JPMorgan found in a study that the median bank balance for the poorest one-quarter of households has jumped 70% since COVID hit. A result is that some people are taking time to consider their options before rushing back into the job market.

Nationally, the proportion of women who were either working or looking for work in September fell for a second straight month, evidence that many parents — mostly mothers — are still unable to manage their childcare duties to return to work. Staffing at childcare centers has fallen, reducing the care that is available. And while schools have reopened for in-person learning, frequent closings because of COVID outbreaks have been disruptive for some working parents.

Exacerbating the labor shortfall, a record number of people quit their jobs in August, in some cases spurred by the prospect of higher pay elsewhere.

Learn how to boost your hiring, and increase your chances of finding qualified applicants with myApplicants. Download the fact sheet to learn more.

10 Ways to Increase DSP Job Applications and Hires

Finding good, qualified applicants to fill your DSP roles is not always an easy task.

Getting more job applications only causes extra work if the percentage of applicants accepting positions and staying longer than 30 days is low. Hiring is important. Weak hiring leads to higher overtime and training costs.

Don’t focus on competing with McDonalds, fast food outlets and retail chains. Agencies need different types of employees. Agencies need someone to care about their job. McDonald’s employees don’t need that quality. Emphasize the caring part of the job!

Depict the job by providing examples of “wonderful outcomes”. Employees love to know what it is in for them. Make sure you highlight any potential growth or long term outcomes of working with your agency.

Think of your ideal candidate and write the application with them in mind. Who is your star DSP? If you want more employees like them, create an application that includes their qualities.

There is a lot to keep in mind when looking for your perfect DSP, so we did some research and put together our top 10 tips to keep in mind in the hiring process.

  1. Think about the job descriptions. Avoid wordy, cold and impersonal lists of responsibilities and skills
  2. Make sure your stability and “extras” are highlighted
    • Benefits
    • Paid training
    • Bonuses
    • BYOD plans
    • Overtime opportunities
    • How the job will make you feel
    • Advertise the typical weekly gross pay of a DSP after 30 days including benefits instead of the hourly rate
  3. Don’t use content that creates barriers:
    • Industry jargon
    • Acronyms
    • Unspecific text
  4. Paint the applicants a picture of what they’ll be doing day to day. Stress the impact on them and others. “Make a difference in someone’s life”, “Be special”, “Want to be more than a cog in a wheel”.
  5. Write different job profiles for different roles – it is easier to get a response from your ideal candidate.
  6. Make sure your adverts appear on all job boards. Indeed is the leading, but not the only source of DSP applicants. Employee references are very beneficial and Facebook ads work if you have a “great story”.
  7. If you go to job fairs, only go to specialized job fairs. This will narrow down your search and guarantee that are you are only looking at applicants that are interested in, and qualified for the position.
  8. Respond quickly to applicants. Make sure they know that you are interested in them, so you won’t lose them to another organization.
  9. Work on your online content and forms:
    • Make applying easy.
    • Tell applicants what they should expect next in the process.
    • Keep it simple – name, email, phone and option to upload resume is all you need.
    • Apply to your own jobs via mobile phone – over 60% of applicants do so on their phone.
    • Don’t link the homepage of your website or Facebook or Instagram – applicants get lost down rabbit holes.
    • Don’t require driver’s license number, social security number, emergency contact, or anything the applicant might not have readily to hand at the time – this is not necessary on an application.
    • Don’t link to PDF applications – not smart phone friendly.
    • Avoid a slow loading page – Google reports people move on if it takes longer than 2-3 seconds.
  10. If listing a hiring contact, do so as personally as possible.
    • Give name
    • Extension
    • Personal email address 

Learn more about applicant tracking; download the myApplicants fact sheet.

Missouri Providers are Struggling with Employee Retention

Missouri workers providing care for adults with intellectual and developmental disabilities make less than a Walmart or Target worker, even after a pay increase that went into effect last month. 

The low pay is the main reason about half of Missouri workers quit each year, according to Missouri Developmental Disabilities Division Director Val Huhn.

Starting wages now range between $9.50 and $10.50 an hour thanks to Missouri state lawmakers appropriating $20 million more in general revenue to providers. But advocates worry this isn’t enough to address the chronic worker turnover that affects the quality of care people with intellectual and developmental disabilities receive.

“It’s just devastating, not having that reliable staff,” Huhn says. “Can you imagine constantly training somebody on how to brush your teeth if you can’t do that? I mean, just you’re just constantly teaching people how to help you.” 

Crisis levels 

Travis Anderson has spent about a year trying to find a personal care assistant. He’s 45, has a disability, and uses a power wheelchair to get around. 

Anderson works as a receptionist and self-directs his care, meaning he hires a worker and the state pays for it. While Anderson is looking, his aunt has stepped in. But she’s almost 70 and Anderson says he’s not sure how much longer she can do this. Travis Anderson interviewed five people for a personal care assistant job the day KCUR spoke with him. Anderson said once they found out the pay, none of them were interested.

Every time he thinks he’s found someone to hire, there’s an issue. Sometimes they can’t work the hours. Anderson needs help getting ready in the morning and then the worker would have to come back in the evening to help him get to bed. Other times they don’t pass the criminal background check. 

Nationally, the direct support workforce has reached crisis levels, according to a 2017 report by the President’s Committee for People with Intellectual Disabilities.

“Not only does the crisis facing this workforce threaten people with intellectual disability and their families; it also undermines the stability, efficiency and ability to grow much needed long-term services and supports and, therefore, undermines the overall U.S. economy,” Jack Brandt, the committee’s chair, wrote. 

It’s been almost a year since Anderson’s aunt said she could help out for three months. Without his aunt, Anderson doesn’t know what he would do. He says his service coordinator wants him to consider going to a nursing home. 

“I don’t think I would fit very well into a nursing home,” Anderson says. “…When you envision how your life’s going to be, I mean, nursing home doesn’t even come up right now. But I’m really struggling to find good staff.”

The Developmental Disabilities Division doesn’t “encourage placements in nursing homes,” Debra Walker, the director of public affairs, said in an email. “ That being said, sometimes there are circumstances when a nursing home would be an appropriate placement.”

Walker said Anderson’s support coordinator is from a private organization and not a state worker. Walker said the state can’t speak to the specifics of the case, but generally, it’s “certainly important to have a support coordinator that is helpful and seeks out all the options.”

Anderson is two classes short of a bachelors degree in psychology but he said he’s had to put his future on hold. 

“I can’t very well get back in school when I literally don’t know from week to week or month to month how I’m getting out of bed,” Anderson says. “I mean, you have to prioritize.”

You have to really like this” Pagi Bowls and Rojai Morris both work at White Oaks, a residential home for people with developmental disabilities.CREDIT AVIVA OKESON-HABERMAN / KCUR 89.3

Rojai Morris got a pay raise because of the additional state funding. She works at White Oaks, a residential home for people with developmental disabilities. It’s run by the Center for Developmentally Disabled in Kansas City. CDD increased their starting wage for workers from $11 to $12.25.

The additional $1.25 an hour isn’t enough for Morris to quit her second job. Between her two jobs, she says she works 70 hours a week to get by. She says she loves her job but the long hours take a toll. 

“It kind of makes you want to second guess working in this field,” Morris says. “Is this really for me because of what I’m going through? I’m only 21 so I kind of look at it like I’m stressing going through this now. Is this where I see my future?”

Nationally, high turnover has been an issue for decades but a strong economy means workers can make more money at less demanding jobs, according to Amy Hewitt, the director of the Institute on Community Integration at the University of Minnesota. Hewitt says an aging population also means workers are serving people with more complex needs. 

“We continue to place higher expectations on this workforce,” Hewitt says. “So it really is a highly-skilled workforce. But we don’t talk about it that way. And we don’t support it as a highly-skilled workforce.”

“It’s heartbreaking” 

David Earls took care of his son Edward, who is nonverbal, for about thirty years. 

I like to think of myself as one of the shallowest, insignificant, heartless people ever created until I started caring for my son,” Earls says. “And luckily, my son has an enormous amount of patience. And so he’s been working with me for 33 years now.”

Earls was getting older and he wanted to make sure Edward would be taken care of, so about three years ago, he moved Edward to a residential home. Almost immediately, he noticed issues with turnover. 

“When you become attached or very fond of a staff member because you’ve seen this person interact with your son for three, four, five, six months, and then all of a sudden, they’re gone. It’s heartbreaking,” Earls says. “Because you know that there’s a relationship being formed there that positive for both Edward and the caregiver.”

Infographic: The Workforce Crisis in Wisconsin

Wisconsin has faced a caregiver shortage for years, but the crisis continues to grow in severity.  A group of Wisconsin health care organizations conducted a study this year to examine the current state of the workforce crisis.

These results were gathered by the Wisconsin Health Care Association, the Wisconsin Center for Assisted Living, the Wisconsin Assisted Living Association, LeadingAge Wisconsin, and the Disability Service Provider Network.

Infographic: The Long-Term Care Workforce Crisis in Wisconsin

Tips to Combating the Effects of the Labor Shortage

Human service providers face a labor shortage, as the demand for services outweighs the supply of workers. Unfortunately, the problem is here to stay. There are multiple factors causing the labor crisis, but even if one or two go away, which is unlikely, the others are sufficient to continue to cause problems for providers. So, agencies will need to learn to live with a labor shortage for the foreseeable future as best they can.

Hear From MITC’s Agency Solutions Team Lead

Sarah Dickey, MITC Agency Solutions Team Lead explains in this video the driving factors behind the shortage. She also offers tips and tools to help providers mitigate its impact. Watch the video for our ideas to rise above the competition!

Retain employees during the labor shortage

How Agencies Can Reduce the Effects of the Labor Shortage

The United States labor shortage is creating stress for employers across the country, but especially for providers serving the I/DD and behavioral health communities. Their work is crucial to the communities they care for, but they are struggling to fill positions. The situation appears more critical by the day. Fortunately, it is possible for an agency to hire and retain employees, even if it cannot raise wages.

What is Causing the Labor Shortage?

The labor shortage does not have one simple cause. The American Network of Community Options and Resources (ANCOR) released a report in 2017 to address some of the reasons for the shortage, and some of them are surprising.

For example, take a look at a United States Supreme Court case called Olmstead v. L.C. In this case, two women with mental illnesses received treatment at state-run institutions. Eventually, mental health professionals said the women were ready for community-based programs, where they could lead more “normal” lives. However, the women were kept institutionalized for years afterward. They sued, and in 1999, the Supreme Court decided that separating disabled persons from society longer than necessary violates the Americans with Disabilities Act.

Since that decision, the federal government has made policies that encourage more home and community-based care for people in the I/DD and behavioral health communities. The problem, however, is that these policies are not backed with an appropriate increase in funds. If more people want home-based care, more workers need to take jobs as care providers. But if the states are unable to expand their budgets proportionally, wages are stretched thin.

Another reason for the labor shortage is that the working population is shrinking. Too few people are entering the workforce to replace retiring baby boomers. Even worse, the primary direct support professional (DSP) demographic (working-age women) is getting smaller. This means that even if DSP wages increase, there will still be a shortage of workers from the typical DSP demographic.

At the same time, the need for DSPs is rising fast.  The Bureau of Labor Statistics predicts that the job outlook for home health aides and personal care aides will grow 40% between 2016 and 2026 – that is much faster than the 7% average growth rate for all jobs.

How is the labor shortage affecting human service agencies?

Providers are feeling the sting of the labor shortage most of all in their turnover rates. The DSP turnover rate is at 45%, according to the ANCOR report. A 2015 survey by National Core Indicators found that more than half of DSPs leave their jobs within a year, and about a third leave within six months. A rate this high means that clients don’t have time to get to know and trust their caregivers before they leave.

Turnover isn’t the only adverse effect. As noted earlier, job vacancies will rise in the coming years, causing extra agency expenses. The ANCOR report says that every unfilled position costs an agency between $4,200 and $5,200 in direct and indirect costs. Even worse, job vacancies could affect your agency’s DSP-to-client ratios and incite hefty fines.

As positions remain unfilled, employees need to work extra hours to fill shifts. This often leads to overtime. USA Today reported that worker shortages across the country have “quietly provided a financial boon to many full-time employees, who are notching lots of overtime, and part-timers, who are toiling more hours or shifting to full time.” This is nice for people eager to work more hours, but it is costly to their employers.

Most importantly, the labor shortage hurts the people within the I/DD and behavioral health communities. Many clients rely on provider services to live healthy lives. Without enough employees, agencies can’t take care of their clients properly. This is obviously disastrous for clients as well as providers.

How Can Human Service Agencies Cope With These Effects?

These stats are sobering for any business, but particularly for agencies that rely on state and federal funding. Even though most providers are at another’s mercy for funding issues, there are still ways for them to boost retention and cut costs.

Promote a work-life balance for employees

“Work-life balance” is a buzzword in most workplaces today, especially among younger generations. According to the 2017 State of the American Workforce report by Gallup, 53% of employees say that greater work-life balance and better personal well-being is “very important” when  considering a new job. This attribute ranks higher than job security, significant pay increase, and company reputation. The percentage may also increase in the coming decade, since millennials and Gen Xers assign more importance to this than baby boomers.

An excellent way to ensure your employees have a good work-life balance is to manage their schedules well. One of the biggest complaints employees have is lack of advance notice for their schedules. Poor scheduling or last-minute schedule changes can cause conflicts with employee’s home lives and cause them to seek alternative employment, even at a lower pay rate. It is important to track employee preferences and restrictions when creating the schedule. Doing so will maximize employee satisfaction and help you avoid a hassle. Allow enough time between shifts for employees to go home and rest, and avoid calling employees back in when they have just finished a shift.

Also, take advantage of the internet to simplify scheduling. Publish schedules online so employees can access them anytime, anywhere. Save time for everybody by letting employees see not just their own schedules, but also who they are working with, open shifts, their PTO balances, etc. Allow employees to request PTO online, avoiding telephone/email tag.

Empower employees

All employees need to feel respected in the workplace. One way managers can respect their employees is by giving them a certain amount of autonomy. Researchers from the University of Birmingham recently found that employee autonomy directly correlates to job satisfaction. For women, in particular, autonomy translates to scheduling and location flexibility.

One way to give employees a sense of autonomy is to allow self-service. Self-service means employees have some control over their schedules, PTO requests, training requirements, and benefits information. This can mean allowing them to change their schedule preferences online, giving them full-time access to their PTO balances, letting them receive notifications whenever extra shifts are available, and setting up automated alerts so they are always aware of their training deadlines. Self-service can also mean enabling employees to request corrections to their attendance records (like forgetting to clock out). When employees have some autonomy, they are more likely to feel respected—and it reduces the administrative burden on managers!

Improve time and attendance

A high turnover rate causes payroll costs from overtime and position vacancies. While overtime can never be eliminated, using an insecure time and

attendance system encourages poor attendance and low-level payroll fraud. Save your agency from additional costs by using a secure time and attendance system.

Biometric fingerprint readers, for example, eliminate the risks of buddy punching and fraud. These errors can add up to 1-3% of an agency’s payroll-related costs. That does not even take into account the lost productivity from payroll calculations and data entry. Since the cost of biometric fingerprint readers has dropped in recent years, they can give agencies a great return on investment.

For in-home programs, where fingerprint scanners are not feasible, telephone timekeeping is effective. Use voice authentication to inhibit buddy punching, and use location-based caller-ID to prevent fraud. Telephone timekeeping also allows for more advanced features, such as no-show alerts and employee HR alerts at clock-in.

Recruit creatively

Another way to cope with the labor shortage is to get creative with recruiting. Since the number of women in the workforce is shrinking, agencies need to expand their horizons when looking for employees.

Millennials are the up-and-coming group to dominate the workforce. According to LinkedIn’s 2015 Talent Trends Report, they will comprise 50% of the workforce by 2020, and 75% within a decade. Millennials like social media, so link to your job applications on Facebook and Twitter. Offer paid or unpaid internships, open houses, and career days to attract job seekers. Also, emphasize your mission – millennials, in particular, want to feel like they are contributing to the greater good at work.

Additionally, find ways to speed up your recruiting process. For example, try using a web-based system to track the entire applicant process. An online system can save you time by automatically notifying passive job seekers of new positions, parsing resumes, and tracking every step of the way, among other things. It can also make the process more intuitive for applicants, which makes a good first impression (millennials, especially, expect clean and user-friendly websites).

While the labor shortage continues, the employment outlook for your agency may appear grim. But even if your agency’s budget isn’t as flexible as you’d like it to be, you can take steps to rise above the competition by attracting and retaining valuable workers.

Payroll Costs Rising from the Labor Shortage

Payroll Costs Rising from the Labor Shortage

Services are increasingly getting more expensive to provide thanks in part to ongoing labor woes, according to the latest Cost of Care Survey from insurer Genworth Financial.

The national median cost of home care pay shot up 6.17% to $21.50 per hour, or $4,099 per month, from 2016 to 2017. Among other care settings, this is the most pronounced increase. The cost of home care services, including household tasks, reached a median of $21 per hour, or $3,994 per month. This is a 4.75% increase from last year.

Over five years, the median cost growth rate was 2.5% for home health aide services and 3.08% for homemaker services.

This year’s cost increase was particularly notable, says Gordon Saunders, senior brand marketing manager for Genworth’s U.S. Life Insurance division. Overall, the annual median cost of long-term care services climbed an average of 4.5% from 2016 to 2017. It marks the second-highest yearly increase for nursing homes and home care since the study began in 2004.

“We have become accustomed to seeing steady increases in the cost of long-term care services, but this year, we saw a marked acceleration in the cost of home care over previous years,” Saunders told Home Health Care News. “This is based on external factors in the marketplace related to supply and demand: increasing demand for long term care services as our population ages versus shortage of workers and rising labor costs.”

By comparison, the national median cost for a one-bedroom unit in a private-pay assisted living community reached $3,750 per month, or $45,000 a year. That’s an increase of 3.36% from 2016 to 2017.

National median rates for semi-private room nursing home care increased 4.44% and hit $7,148 per month. Also, private room nursing home care reached $8,121 per month, a 5.50% increase.

Labor Woes Crank Up Costs

The labor shortage isn’t the only factor driving up costs, but it has impacted all care settings, says Saunders.

“[U.S. Dept. of Labor] changes have resulted in minimum wage and overtime protections to more domestic service workers who enable individuals with disabilities and the elderly to continue to live independently in their homes,” Saunders said. “Also contributing to the increase in labor costs is the Affordable Care Act (ACA), which requires employers of a certain size to offer some type of health insurance, or pay a penalty.”

For nursing homes, higher labor expenses and tightening Medicare rules have resulted in shorter hospital stays. Instead, sicker patients are sent to rehab nursing homes for shorter stays, driving up costs, Genworth noted.

Room and board for assisted living communities has risen to accommodate residents who are sick, but not sick enough to require nursing home care. Luxurious amenities commonly found in private pay communities also increased costs of care.

What Agencies Can Do About It

This eBook explains the factors driving the labor shortage, and how a two-pronged approach can minimize the costs for agencies.

Download the new eBook and check out the complete library of ebooks for agencies here.

Help Wanted - Labor Shortage Worsens

Labor Shortage Gets Worse

An acute labor shortage among home care workers across the country is threatening care for disabled and elderly individuals. Many agencies are struggling to retain employees. Scheduling is also difficult, as as agencies move around a shrinking pool of workers to cover open positions.

The labor shortage endangers a vulnerable population. In Minnesota and Wisconsin, nursing homes denied admission to thousands of patients because they lack essential staff. Patients living in rural ares of New York have injured, soiled, and starved themselves because paid caregivers aren’t available. In Illinois, the independence of developmentally disabled people is being compromised, as agencies experience staff shortages of up to 30 percent.

The emerging crisis has several causes. First, state Medicaid programs are unable fund higher wages. Second, the pool of workers willing to perform this physically and emotionally demanding work is shrinking. These problems portend even worse difficulties to come. Experts warn that America’s senior population will swell to 88 million people in 2050, up from 48 million currently. They will also require more assistance with chronic health conditions and disabilities.

“If we don’t turn this around, things are only going to get worse,” said Dr. David Gifford, senior vice president of quality and regulatory affairs for the American Health Care Association.

Rising Demand, Stagnant Wages Contribute to Labor Shortage

For years, experts have been predicting that demand from a rapidly aging population will outstrip the capacity of the direct care workforce. The U.S. Bureau of Labor Statistics estimates an additional 1.1 million workers of this kind will be needed by 2024 — a 26 percent increase over 2014.

Yet, the population of workers who tend to fill these jobs, overwhelmingly women ages 25-64, will increase much more slowly. After the recession of 2008-2009, Medicaid-funded agencies filled positions rather easily. Now, however, the improving economy has led these workers to pursue other higher-paying alternatives. In response, turnover rates are soaring. Falling immigration and refugee rates may make the situation even worse in the future.

At the same time, wages for nursing assistants, home health aides, and personal care aides are stagnant, making recruitment difficult. The average hourly rate nationally is $10.11. This rate is a few cents lower than it was a decade ago, according to the Paraprofessional Healthcare Institute. Workers in a handful of states are pushing to raise the minimum to $15 an hour.

Hardest to cover are people with disabilities or older adults who live at some distance from a city center and need only one to two hours of help a day. Workers prefer longer shifts and less time traveling between clients, so they gravitate to other opportunities.

Hard Times in Wisconsin

Some of the best data available on the labor shortage comes from Wisconsin. Here, several long-term care facilities and agencies serving disabled and elderly individuals surveyed their members over the past year.

One of seven caregiving positions in Wisconsin nursing homes and group homes remain unfilled, one survey discovered; 70 percent of administrators reported a lack of qualified job applicants. As a result, 18 percent of long-term facilities in Wisconsin have had to limit resident admissions, declining care for more than 5,300 vulnerable residents.

The situation is equally grim for Wisconsin agencies that send personal care workers into people’s homes. According to a separate survey in 2016, 85 percent of agencies said they didn’t have enough staff to cover all shifts, and 43 percent reported not filling shifts at least seven times a month.

“The words ‘unprecedented’ and ‘desperate’ come to mind,” said John Sauer, president and chief executive of LeadingAge Wisconsin, which represents not-for-profit long-term care institutions. “In my 28 years in the business, this is the most challenging workforce situation I’ve seen.”

Reaching a Breaking Point

Sauer and others blame inadequate payments from Medicaid, which funds about two-thirds of nursing homes’ business. In rural areas, especially, operators are at the breaking point.

“We are very seriously considering closing our nursing facility so it doesn’t drive the whole corporation out of business,” said Greg Loeser, chief executive of Iola Living Assistance. Iola offers skilled nursing, assisted living, and independent living services about 70 miles west of Green Bay.

Like other short-staffed operators, he’s had to ask employees to work overtime, increasing labor costs substantially. A nearby state veterans home, the largest in Wisconsin, pays higher wages, making it hard for him to find employees. Last year, Iola’s losses on Medicaid-funded residents skyrocketed to $631,000 — an “unsustainable amount,” Loeser said.

Wisconsin Gov. Scott Walker proposed a 2 percent Medicaid increase for long-term care facilities and personal care agencies for each of the next two years. However, that won’t be enough to make a substantial difference, Loeser and other experts say.

Due to the labor shortage, it is increasingly important for agencies to have the right workforce management tools to help retain employees and manage the changing schedules of a shrinking workforce. To learn more about how workforce management can help your agencies minimize turnover and improve retention rates, contact MITC.