The issue of labor will challenge the senior care industry and potentially bring it to its knees. That is at least our opinion, and that of many in the industry, as demand for senior care services (which will only increase in the next 10-15 years and beyond) must be met with an appropriate supply of skilled labor. The number of CNA, food service, maintenance, RN and LPN positions required to serve the aging population is only growing, and those jobs, particularly CNAs, RNs and LPNs, are getting more complex as the average resident acuity rises at assisted living and skilled nursing facilities. Operators, if they find the skilled labor to fill these roles (a big if), will have to contend with increases to the minimum wage, which is projected to the rallying cry of “$15 per hour” in a number of states. And that doesn’t only affect those earning under that mark, since most employees don’t want to be left out of a pay raise. CNAs may not want to be paid the same as a food server either. Increased competition, particularly in the assisted living market, also puts pressure on operators to competitively compensate their employees, lest they head over to the brand-new community. Many communities, however, just will not have the funds to maintain the same work force with these wage changes. But as the new expenses begin to seriously affect the bottom line, how much will a community’s value drop? A market average price of $100,000 per bed for skilled nursing facilities and $200,000 per unit for assisted living communities may be a thing of the past.
We can go on about the potential ill-effects of a labor shortage, but what should operators, owners and investors do to prepare? We will be hosting a webinar discussing that very subject on July 13, 2017, titled “The Coming Labor Market Shock to Senior Care.” Panelists John Gonzales of SDG Senior Living, Lori Porter of the National Association of Health Care Assistants, and Glenn Barclay of Quality Senior Living will bring their own experiences to the conversation, and will recount a number of best practices by successful companies on how to find and retain staff, utilize technology to relieve labor pressures, tackle these problems from the perspective of a mid- to low-market operator, and deal with minimum wage hikes. Plus, listeners will be able to pose their own questions to the panel. Tune in this Thursday at 1PM!
