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The War for Talent: 3 Ways to Boost Retention

The turnover rate among health care workers is reaching a level of concern for many agencies. The median turnover rate among caregivers in the home care industry reached 66.7% last year, according to a study by Home Care Pulse. Among direct support professionals, turnover averaged 45.5% in 2016 according to a National Core Indicators report. In addition, the entire human services industry is facing a labor shortage, so providers cannot always fill vacancies as quickly as they would like.

The economy, stagnant wages, and workforce demographics all contribute to high turnover rates. But providers can increase retention in several ways even if these outside forces do not change.

Make It Easy

The key to attracting and retaining staff is to make things easier for them. You might never call the job of a caregiver “easy,” but you can certainly make processes like on-boarding, scheduling, and documentation easy. That will let employees focus on their clients, which is why they chose the profession in the first place.

Reduce the administrative burden on your staff by providing as much as you can online. Don’t make them come into the office to sign on-boarding papers if they can do so electronically. And provide a digital platform for them to complete client documentation before they clock out. Small moves like these can make routine paperwork a lot less stressful.

Focus on Culture

Many agencies cannot afford to increase pay and benefits. Fortunately, those aren’t always the most important factors in employee retention – workplace culture is an even bigger factor to some employees than pay. So even if you can’t give the whole staff the raises they deserve, you can still help retain them by nurturing a healthy culture.

Culture is formed by the values, attitudes, and behaviors of your organization as a whole. A healthy agency is focused on quality care more than anything, so ideally the desire to serve vulnerable individuals will motivate staff to show up on time. But when an agency stresses timeliness for its own sake without showing support for the valuable work its employees do, the staff may feel policed. That feeling quickly leads to burnout.

To promote a healthy culture, work together to create a list of values the entire organization can stand behind. Then, use those values to inspire compliance. Reinforce your appreciation for staff by always paying them on time, responding quickly to their requests, and giving them the tools they need to serve their clients well.

Hire Smarter

When your applicant pool is rather small, it can be tempting to hire “poor fit” employees. These employees usually quit within the first year, simply because they cannot handle the job.

The first way to fix this problem is to expand your applicant pool by using an advanced applicant tracking system. This can push your applications to dozens of job boards, with no effort on your end. Make sure your applications include detailed questions about any required licenses/certifications, experience, and what type of work they enjoy. You don’t want to be surprised by their lack of qualifications, and you don’t want them to be surprised by the type of work they are signing up for!

When you have a solid candidate, set your organization apart by emphasizing your culture/values. You may not be able to attract them with amazing pay and benefits, but you can appeal to them with your mission. Those who fit your culture are the most likely to stay with the agency long-term.

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

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.

Staffing Survey

Agency Staffing Survey Reveals Acute Labor Shortage

MITC recently conducted a staffing survey of 137 agencies employing nearly 40 thousand people across the United States. The results showed a severe shortage of direct service professionals (DSPs). As they struggle to deliver vital services to a vulnerable population, agencies are looking for ways to hire more employees and retain the ones they have.

Across the board, from smaller agencies with less than 50 employees to the largest providers with over 2,800 employees, agencies reported an excessive number of open positions, primarily for DSPs. The average agency employed 320 people when fully staffed and had 25 open positions (nearly 8 percent). The total number of open positions was over 3 thousand.

The Hidden Costs of a Labor Shortage

An employee shortage is not just inconvenient; it is costly. For example, agencies have responded to the shortage by authorizing more overtime. Of the agencies who participated in the survey, 65 percent reported overtime was higher than they wanted.

Overtime is not the only cost of the labor shortage. Turnover costs money, both directly and indirectly. Direct costs include overtime, lost billing if services cannot be delivered, recruitment activities, and fill-in staffing. Indirect costs include lost productivity while managers are busy interviewing and training new employees. Less obvious, but no less costly, are the negative impacts to staff morale and performance, which can lead to diminished quality of client care. Among the survey respondents, turnover rates varied quite a bit. For example, agencies in Maryland, New York, and Pennsylvania reported turnover rates under 10 percent, while some agencies the Carolinas, Indiana, and Illinois reported DSP turnover rates as high as 80 percent. This is not surprising, since the states with the lower turnover rates are able pay about 20 percent more for DSPs.

As if the shortage isn’t difficult enough, agencies also reported problems with the quality of applicants among those who are available. Common problems were applicants who failed drug or background checks, had no relevant skill sets, failed to complete training, had poor concepts of attendance responsibilities, or did not show up for interviews/training.

Ways to Improve Retention and Hiring Rates

Almost all agencies participating in the survey have already taken steps to improve their hiring and retention rates. These steps include:

  • Better applicant screening to concentrate resources on those most likely to stay
  • Annual review of retention and on-boarding process
  • Improved, more organized on-board training
  • Working with local colleges, such as nursing schools
  • Emphasizing total compensation value, rather than hourly rate
  • Developing career ladders
  • Referral bonuses and new hire bonuses
  • Graduated pay scales
  • Early access to benefits
  • Mentoring/buddy programs
  • Contests and awards
  • Employee appreciation days and events
  • Monthly staff newsletter
  • Shift differentials
  • Profit sharing

In addition to these things, agencies can focus on several areas to increase retention and attract workers.

Follow Good Scheduling Practices

One of the biggest complaints employees have is lack of advance notification for schedules. Poor scheduling or last minute changes can cause conflicts with your employees’ home lives. A DSP will be much less motivated to show up if they are constantly being rescheduled, especially at short notice. Frequent rescheduling leads to a culture of frustration and uncertainty in your workforce, and it encourages absenteeism and turnover.

When scheduling employees, it is important to track their preferences and restrictions. This will help you avoid calling them in to cover shifts they can’t take. Capture these preferences during the new hire process. Also, allow enough time between shifts for employees to rest, and avoid calling employees who have just finished a shift back in. Also, planning for holidays well in advance can avoid disruption and lead to better attendance.

Good scheduling practices, together with an accurate time & attendance system, help your agency track frequent offenders who regularly show up late, leave early, or call in sick. These employees set a bad example to others, causing lower productivity and more overtime.

Of all the agencies that participated in the staffing survey, 42 percent are considering new scheduling systems. Additionally, agencies reported that they had already changed some of their scheduling practices by:

  • Investing in new scheduling software
  • Allowing flexibility in how different sites schedule staff
  • Introducing rotating weekend shifts (one on, one off)
  • Creating more full-time positions
  • Increasing the number of part-time staff
  • Creating scheduler position(s)
  • Monitoring hours to ensure employees get breaks
  • Scheduling longer shifts on fewer days
  • Using salaried staff to cover open shifts

Empower Employees Through Self-Service

Employee self-service refers to a system that gives employees a certain amount of autonomy. For example, an online self-service system allows employees to see their schedules, who they are working with, which shifts are open, their PTO balances, and more. This saves time for you and your staff. It also reduces the amount of phone calls and emails between you.

Another popular self-service feature is an automated text or email alert system to remind employees about licenses, training deadlines, upcoming reviews, and more. An alert system can also send birthday and anniversary greetings or HR updates. It can improve communication between employees and managers, too, by sending notices when PTO is requested or approved. Using text/email reminders to notify employees of their next shifts can also reduce absenteeism and helps motivate employees. On the same token, including a digital checklist to assign duties helps employees know what they are meant to do; this is especially helpful if an employee is covering a shift for someone else.

Recognize Excellent Employees

Employees like to feel like their hard work is being rewarded. To do this, make sure your agency provides clear career paths for DSPs. Give them written guidelines on what factors will help them advance, such as good attendance records. Reward hard-working DSPs by gradually increasing their responsibilities. A DSP who has advanced from an entry-level position to a manager role is more likely to be loyal than one who has done the same job for years. For this reason, try to promote from within your agency workforce, rather than recruiting outsiders.

Also, employees want to know where they could be headed and how they can get there. Annual reviews or mid-year check-ins are one obvious venue for these discussions, but also encourage workers to come to HR with career questions and wishes throughout the year.

When excellent employees leave your organization, conduct exit interviews. You may even consider asking longer-tenured employees why they stay. Ask questions such as: Why did you come to work here? Why have you stayed? What would make you leave? What are your non-negotiable issues? How about your managers? What would you change or improve?

While there are no quick fixes for overtime or turnover, making a few key changes can increase caregiver retention and help alleviate the challenges agencies face by caregiver shortages.