When talking about your organizational goals, is every department within your company on the same page? Have you shared or even included all departments in goal setting and strategy development? Does your Human Resources department act as part of the strategy team for your community and your company or do they perform as an auxiliary function?
People can make or break your organization. The front-line employees who interact with the public. The CNAs and nurses who care for your residents. The receptionist who greets everyone who walks into your office or facility. The marketing team who puts out the marketing material and branding that can draw in new business (or not). Your top management and executives who define and plan the company brand and strategy. So, don’t you think the department responsible for recruiting all these people need to be an integral part of the company strategic plan? Absolutely!
Think about what your Human Resources Department is responsible for: • Recruitment and Hiring • Orientation/Training/Development • Compensation • Benefits • Payroll • Health and Safety (Risk Management and Worker Protection) • Employee Engagement (Retention) • Equal Opportunity Employment Compliance
In addition, each of these activities can be broken down into multiple tasks. Your HR department is responsible for your staffing, the performance of your staff, legal compliance for your organization and keeping your employees happy. No small task!
So, while you expect your HR department to perform in this way, they can sometimes get boxed in to just performing task after task, putting out fires day after day. Do they know what you expect of them? Do you truly know what to expect out of your HR department? Do they understand the strategy of the organization in order to hire the right people for the job? Can they explain your brand, culture and goals to potential employees to be sure they understand the job expectations? If you are experiencing high employee turnover, you really need to explore the answers to these questions.
Make sure you include your HR manager in strategy development. Coordinate efforts between organizational goals and the people who must perform to achieve these goals.
Kim Jimenez has been a regular contributor to the MDS website and MDS blog for the past 15 years. Kim holds a supervisory position in a Fortune 100 company and has experience with a multitude of employee, training and leadership issues. She obtained her Bachelor’s Degree concentrated in Human Resource Management from Southern New Hampshire University
How Often Are You Recruiting For New Top Human Talent?
It is easy to form a perception that talent should only be recruited when there is a position vacant in your company, but unfortunately, that kind of thinking is not very helpful to your company. You should always be recruiting and finding top talent so that they are ready when positions open up for any reason.
Don’t Rely on the Internet Alone
The advent of the internet and job boards was thought to be the end- all- be- all for recruiting. But, it has proven to be a double edge sword when it is the only method used. The great thing about internet job postins is that you can cast a wide net by broadcasting your current job openings to many individuals that may be looking for employment in your town, or even across the country. The downside is that you can be flooded by many applicants that are not anywhere close to being qualified for an opening in a specific position.
Now, relate this to your community’s marketing department for new residents. Can your community just post an advertisement saying “We have rooms available”, and the right person shows up and there you go, you have a new resident? Not quite, or there would be no need to have a sales and marketing team. It should be considered the same with community staffing. It takes a lot of work and effort to find the right fit for the community, both for residents and staff.
Always Be Recruiting
It’s important to augment the posting of job openings through portals such as Indeed, Career Builder, or others in this category. Talent Mangers must actively recruit to find the best employees available for the many different job functions within the community/company. This includes giving talks throughout the community at different functions and gatherings of people like civic clubs, high schools, junior colleges, colleges, and other professional organizations throughout your operating region. It is very important to educate as many people as possible about the existence of your community/company, that it is a great place to work with many opportunities besides those of just direct caregivers. Target programs and organizations can include, but are not limited to, those affiliated with business, nursing, culinary, and hospitality.
LinkedIn is also a great place to gather potential contacts for professional level jobs. LinkedIn should be used to identify individuals with skills that will be beneficial to your team now and in the future. Don’t limit yourself to just those that may currently hold positions in the Senior Living industry, but look in other industries for transferable skills as well. Establish casual relationships in the beginning and watch how they interact with others in their peer groups. Do they post timely and relevant material? Do they have original thoughts? How many connections do they have (a peek at how good they might be at networking and recruiting prospective residents)? Do they seek out and participate in continued education opportunities? LinkedIn will also let you glance into the individual’s employment past. With this feature, it is easy for an individual to write anything they want with little to no cross-checking by others, so proceed with caution. Trust, but verify. Once individuals are identified as potential employees who could be an asset to your team, then it is prudent to reach out and make a connection with them.
Start an HR newsletter to keep current employees and those interested in working for your company informed of current happenings within your company/community. Not necessarily resident-focused, but more about job openings, training, and highlighting employee accomplishments. The added communication will go a long way in both employee retention and recruiting efforts. While this form of communication usually will not lead to instant gratification in the recruiting of other professional individuals, it will build a pattern of contact that over time will lead to candidates keeping up with your company. If they like what you have to say, it will leave them with the sense of wanting more information about company activities and available openings.
So get out from behind the desk and computer screen, and endeavor into the community, market yourself, your industry, and your company for great talent. A great side effect is that while you are getting the word out of your community/company, simultaneously you just might accidentally uncover a prospective resident or family member looking for a loved one.
Make your company an employer of choice, not an employer of last resort!
Roy Barker is Director of Special Projects at Moore Diversified Services, a Fort-Worth, Texas-based organization specializing in Senior Living operations analysis, marketing development, and investment advisory services. Roy is an authority in the field of employee turnover analysis and retention strategies.
Recruiting talent should be more than a post on an internet job board.
Are you proactively or reactively recruiting and hiring employees? Is your company one where prospective employees are calling you, or are you just picking through whatever the internet sends you? Employee recruiting must be more than a post on Craigslist, or some internet job board. It should be about developing relationships- selling your industry and your company to future employee prospects. Your efforts to market for human talent shouldn’t be any less proactive than the way your community markets for prospective residents.
Credentials are Not Enough
Credentials, training, skills, and education can only go so far. There has to be the right attitude and the right fit. The right attitude towards caring for residents, a “servant’s heart”, and fitting in or blending in well with your existing staff. You can teach someone the important components of the job, but it is hard to teach or recreate an attitude that has gone bad. Not that it cannot be done, but is it worth the damage it can do to both residents and existing staff? I once heard that attitudes are catchy…so you have to ask yourself when you’re sitting across from someone, would I want my staff catching this attitude?
We must remember in this business how important the “servant’s heart” feature is in being a successful employee. We aren’t manufacturing widgets on a factory floor or dealing with inanimate objects that are indifferent to how they are talked to or treated. In senior living, it’s the total opposite. We provide love and care to other humans, like ourselves, and it should always be done with dignity.
Take Your Time
When hiring reactively, there is usually some amount of pressure to fill a job, like having a deadline to meet yesterday! This is when there is not enough time to spend with, interact, and observe a prospect to see the real person. There are things you can do before the hire, but these take time, and they are still limited in uncovering potential problem areas. Sometimes we have to slow down to speed up.
When proactively recruiting future/potential employees, you have more time to invest because you are not on the clock. There is no rush to fill a suddenly vacant position. This gives you more time to see how these prospects act over a longer period of time and in different environments or situations. There is also more time to talk to the recruits’ current or former colleagues, bosses, etc. Since you are not asking hiring questions, but you are just having a general conversation, there is a much greater chance those you are speaking with will give you more information. More information instead of the usual simple details such as the standard date of hire, date of separation, and if they are available for rehire or not. You are feeling the pressure to make hasty decisions that you may regret in the very near future.
This isn’t to say that the internet and job boards should never be used, that is nowhere close to what should be done. It should be an integral part of any recruiting process, but it should be a smaller part of a much larger integrated and dynamic human talent marketing plan. There will always be pressure to fill jobs, and those emergencies where you do not have someone waiting in the wings. It would just be prudent not to rely so heavily on the internet and job boards. But there has to be a good balance between different methods of recruitment.
Build Relationships
In order to attract the best employees, you have to build relationships just the same as attracting residents. There is no difference. Great companies with great human talent management do not have to do a lot of advertising for job openings. They have candidates lining up at their door.
Why don’t we consider trying to find the right employee candidates as important as finding residents? Although it is true that the residents pay the bills, we have to consider the fact that if we have a terrible staff, or one that turns over every year, we will not continue attracting and keeping the residents we desire. It does not take long for word to get out that your residential property is not the place to live in to age well.
Marketing for Talent
How do you accomplish this? By putting in a lot of hard work! Through developing an awesome company culture, referrals, marketing the company to specialized industry programs, educational institutions, and most importantly, building relationships in and out of the industry. Developing these relationships will also allow you to be selective and choose talent only from the best these programs have to offer. There are many different methods in which communities can raise their visibility in the education community. These might range from employees speaking and/or lecturing, to using communities as practicum locations, to providing internship opportunities at the community level.
If recruiting the right people was as easy as posting a job listing on Monster, I could be an elite talent manager, but the reality is…it is not that way at all.
Great talent managers work as hard as any other marketing managers. They are out days and evenings in meetings with any group that will have them.
For example, here’s an idea: Start a CNA training program in your community. This would give you access to the top talent in the class and they would already be familiar with your community. If that’s a little too ambitious, there are CNA training programs in most areas. It is imperative to develop relationships with these and other nursing-related programs in the areas in which you operate. These will not only allow you to develop relationships with the programs and the students, it will also give your community/company exposure to these students and instructors. This will help in the development of a pipeline of viable candidates.
If you can start to market for talent, you will be able to see a change in the quality of prospects that you come across, and in no time, top candidates will start seeking out your company.
Watch for Part 2 of “Do You Market For Human Talent?”
Roy Barker is Director of Special Projects at Moore Diversified Services, a Fort-Worth, Texas-based organization specializing in Senior Living operations analysis, marketing development, and investment advisory services. Roy is an authority in the field of employee turnover analysis and retention strategies.
In a proposed plan by the White House, more exempt employees will be eligible for overtime compensation.
Not long ago I wrote a piece on the impact of increasing wages through both higher minimum wages and entry level wages in Is Your Business Prepared for the $15-An-Hour Entry Level Worker? Now, you should not only consider the impact of rising wages for hourly workers, but also potential wage impacts related to exempt employees. The proposed plan by the White House would raise the threshold of wages in which exempt works are eligible for overtime compensation.
The Proposal
A recent White House Proposal will increase the number of exempt employees eligible for and entitled to compensation for overtime work beginning in 2016. The new regulation increases the minimum pay for overtime-eligible exempt employees from $455 a week to $970 a week, or $23,660 to $50,440 on a yearly basis.
Currently, hourly and salaried employees making under $455 a week or $23,660 a year are generally eligible for overtime compensation for hours worked in excess of 40 per week. If this proposal goes into effect, it will increase the eligibility for salaried employees making up to $50,440 a year to be eligible for overtime compensation. This will more than likely have an effect on most department managers and some administrative personnel currently employed at senior living communities who have previously been ineligible for overtime due to their exempt status.
Changes To Be Considered
If the proposal is approved, this will create a need to start doing a few things differently for the exempt employees making under $50,440 per year. The first thing would be to start tracking these newly eligible employees’ time closely, even if they work off-site or from home. If the employee consistently works overtime, the changes that can be considered will include: whether to institute a no more overtime policy, increase the employees pay to $50,500, or convert them to an hourly rate and adjust for overtime normally worked.
Policies for communicating with these employees during off hours by phone, text, or email will also need to be evaluated. It would also be prudent to consider the impact of employees who might cover for others due to no-calls, no-shows, or other absences. If the coverage situation happens at the end of the scheduled work week, then this employee would more than likely have already worked enough hours to be eligible to an overtime situation.
Definitive Action is Needed
It may be tempting for management and employees alike to take a laid-back view on this emerging situation. If you don’t get anything else from this article, the one piece of information you should remember is this: I can assure you that you will be better off planning ahead for the proposed rule change. Don’t be tempted to procrastinate, and don’t simply make a handshake agreement with an employee and think that nothing needs to be changed because everything will work out in the long run. Unfortunately, it doesn’t always work out, and the cost can add up. The cost of the overtime work, penalties, time other employees will spend on this, and possible litigation will cost you more than it would have to initially just do be prepared from the start. Not to mention the hassle of having the Labor Department in your business for goodness knows how long.
Be Proactive
Let MDS help you evaluate the possible impact of wage increases in your community. I can work with you and your team to calculate your financial expose based on potential changes in over-time regulations for exempt employees. A proactive approach will allow us to develop alternative pay plans and work schedules to minimize the financial and service impact on your organization.
While we don’t know where minimum and entry level wages will eventually land, I will also help your team run “what-if” scenarios based on several factors to estimate the impact of multiple levels of increase. Putting this all together will help guide management’s approach to evaluating and setting monthly service fees, and service packages designed with minimal impact to the organization, its residents, and staff members.
Don’t procrastinate on these important wage-related issues. There is still plenty of time to design a well-rounded solution that has minimal impact to your organization.
Roy Barker is Director of Special Projects at Moore Diversified Services, a Fort-Worth, Texas-based organization specializing in operations analysis, marketing development, and investment advisory services. Roy is an authority in the field of employee turnover analysis and retention strategies.
Is your company or community ready for the financial impact of rising entry level worker pay? While $15 an hour is the new “rally cry” for the minimum wage, whether it will happen nationwide can be debated. But it still begs the question, “Can your current financial structure handle entry level wages increasing to $14, $12, even $10 per hour?” Reality is there are a lot of communities that struggle even with current entry level wages somewhere between $8 to $10 an hour. A recent Wall Street Journal article indicated U.S. wages were on pace to increase at rates not seen since 2008. So while we don’t know where entry level wages will land ultimately, it is certain that wages will continue to increase, and more than likely increase at a faster pace than over the last few years.
Minimum Wage verses Entry Level Wage
An important point to note is that while minimum wage and entry level wage are used interchangeably, they can be very different. Minimum wage is mandated by a governing body of some type, such as federal, state, county, or even cities in the case of Los Angeles as mentioned in an article referenced below. Entry level wages are what companies decide is a competitive wage for new employees in entry level jobs such as dining services, housekeeping, and direct care. Most Senior Living communities pay over and above prevailing mandated minimum wage levels by an average of $.75 to $1.50 per hour.
Wage Pressures
The increase in entry level wages is due to many factors. First our economy has improved and unemployment is significantly down over the last few years. Secondly, retail giant Wal-Mart and fast food giant McDonald’s have both made commitments to raise their minimum starting salary over the next few years. In fact, the Mayor of Los Angeles, CA just signed a bill setting the minimum wage in that city to $15 an hour by 2020, making it the largest city in the country to mandate a $15-an-hour wage. Thirdly, adding to the already mounting wage pressure are predictions of a looming labor shortage in some geographic areas and industries.
On the other side of the coin we can argue that with the talk of a labor shortages, immigration reform could be on the horizon to add more labor to the pool. There is also the view that if McDonald’s entry level wages rose to $15, automation would step in and replace a large portion of their entry-level workers. Even if you take the actual dollar amount off the table for just a minute, and let’s say that you were still able to attract workers in the $8 to $10 an hour range, are you and your residents willing to settle for the leftovers? Those who couldn’t make it anywhere else? Because while wages generally don’t make it in the top 5 to 10 reasons why employees leave employers, when talking about a differential of $.10-$.50 an hour, if the difference was $2, $4, or $6 an hour, a 20% to 60% increase over current pay, this would be a game changer. Regardless of your point of view on the actual dollar amount, the uncertainty should be enough to take action to off-set wage related financial pressures, even if they are not as extreme as mentioned.
Impact To An Average Community
Jim Moore, founder and president of Moore Diversified Services, published an article in January 2015, which highlighted what a modest increase of a $1.50 per hour might mean to an average 110 unit assisted-living community. This included the payroll increase of over 10%, total expense increase of 4.5%, approximately a 12% decrease in net operating profit margins, and $2 million of decreased community value at a conservative capitalization rate of 8%. You can only imagine the impact to your bottom line if the increase was in the $4 to $6 an hour range instead of the $1.50 per hour used in the example.
Do You Have a Strategy?
The next question is, do you have a financial strategy to combat rising wages without compromising your Income Statement, significantly reducing cash flow, or greatly reducing the future value of your community? If not, now is the time to begin formulating one. In the past wages have generally risen at modest rates and changes in revenue structures could be made to accommodate or off-set the increases without much impact on residents. Unfortunately, with all these dynamics converging to create tremendous pressure on entry level wage, you may not have the luxury of time this go around.
It’s important to start the process and begin to manage change immediately. Three initiatives to help accomplish this would be to 1) reduce overall operating expenses, 2) fine-tune existing revenues, and 3) realize organic growth through increased revenue and expanded services.
How MDS Can Help You
Entry level wages will likely increase in the near future, although how much can be debated. We at MDS believe this can be a Win-Win for communities and their workers. This will make strides in the effort to pay everyone a living wage, and with proper planning it doesn’t have to devastate your income statement. This will have a significant increase on the labor intensive Senior Housing industry; especially assisted living and memory care with heavy entry level labor concentration. There are practical strategies that can be implemented to enhance revenues, reduce overall operating expenses, and create favorable organic growth in individual communities or portfolios for multiple communities.
Now is the time to take a hard look at each and every line item of expense. Good economic times can cover excessive expenses very easily. It’s always a good practice to stay on top of changes that can be made to reduce expenses, while not compromising resident care and service to help off-set any future wage increases. A full-scale operations review and benchmarking would be recommended.
Performing competitive pricing analyses, evaluating ancillary and tier charges will insure that you aren’t leaving any revenue on the table. Make sure that units are priced according to the true value they provide residents.
Finally, don’t let 93% stand in the way of 100% occupancy. Seems that there is a mental block when communities reach 93% occupancy. Then it’s time to reduce the marketing budget or just operate under the 93% cloud. On the contrary, it’s time to push harder. The financial rewards for those next few units is what sets great performing communities apart from the good ones.
Don’t wait till it’s too late and put your communities’ financial health in jeopardy. Let’s get started planning for the future of higher wages for entry level workers today!
Roy Barker is Director of Special Projects at Moore Diversified Services, a Fort-Worth, Texas-based organization specializing in operations analysis, marketing development, and investment advisory services. Roy is an authority in the field of employee turnover analysis and retention strategies.
I recently completed a two-webinar series on employee retention/turnover. If you did not have a chance to watch those in person, please visit our YouTube channel at MDSseniorliving to view any of our past webinars. Probably the most asked question after each of these webinars was “How do you measure employee turnover/retention?” I thought this would be a good space to go into employee turnover/retention measurement a little bit further.
Defining Employee Retention and Turnover
It might be helpful to define retention and turnover. There are multiple definitions and different ways to measure each of these so I will discuss the generally accepted standard definitions. Measuring employee retention usually means picking some time frame to measure what percentage of employees have been employed with the company that long. I generally use a year as a base for retention, but the time period can be adjusted to suit your specific needs. Employee turnover is anyone who separates from the company, either voluntarily or involuntarily, and must be replaced. This could be due to retirement, being a stay-at-home parent, other self-induced separations, and forced separations.
Attainable Employee Turnover Rates
Due to the definition of employee turnover, it is highly unlikely that any company would ever have a 0% employee turnover rate. While it may sound somewhat counter-intuitive at this point, actually having 0% employee turnover rate in larger organizations would not be a good thing. It seems there will always be those in which we have to ask to leave our employment and those that move-on on their own. Additionally, bringing in new people to an organization leads to fresh ideas and new perspectives on old methods. Generally a 10% – 20% turnover rate is acceptable and attainable.
While not a lot of people measure it, job vacancy can be a crucial workforce indicator. There is an inherent cost to vacant positions, which are somewhat more difficult to calculate but it can be done. Vacancies can have a toll on workforce morale due to the added load it puts on other employees, as well as affecting customer relationships through poor service. If employee overtime is at an escalated level or has been steadily increasing and/or customer satisfaction ratings are dropping, it may also be a good idea to look at the position vacancy ratio.
To calculate this measure, divide the average number of vacant positions over a specific time frame by the total number of authorized positions in the company or department.
Calculating Employee Turnover
So let’s start off by looking at employee retention of one year or more. You would take the number of employees who have been employed at your company for one year or longer and divide that by the average number of current filled positions. In measuring retention and turnover, if the number of filled positions fluctuates during the time periods you measure, it would be best to take an average of filled positions. This could be done by taking the filled positions at the beginning of the month and those at the end of the month and running a simple average.
When measuring employee turnover, there are a few more steps that we may want to go through. This can be done over any time frame in which you desire. The only thing you’ll need to remember is that you will need to annualize for any time periods that are less than a year. Because the number of separated employees will more than likely continue to grow throughout the year and the number of filled positions will remain fairly constant, the number should be annualized for consistency.
If you’re comparing one month to one month or one quarter you can use the raw number, but to measure employee turnover for one month and to use that rate to speak in general terms of employee turnover would be incorrect. A good general measurement to start with is to take all the people that separated within a specific time and divide that number by the average number of filled positions during the same time period.
There are many variations of detail in which you can measure employee turnover. While the general overall turnover of a company or department is a good place to start, if it’s a small company a large number can be misleading because there are not a lot of total employees. Therefore, each employee who leaves will appear magnified. In just the reverse, if you’re within a very large organization, a generally low number may cover up hot spots within departments or divisions within the company. For these reasons there are a few more steps that I would recommend.
Length of Employment
Probably the most important secondary measure of turnover would be the factor of time. Usually a large amount of employee turnover happens within the first year of employment, with most of that coming within the first 60 days. Selected time periods should be looked at in depth in order to find problem areas within the system. I would recommend looking at 30 day, 60 day, 90 day intervals as well as 180 day, 270 day, and 365 day increments. In order to measure this segment of turnover you would take the number of separations during the specific time period divided by the total number of separations. This should help you isolate any troubled spots.
Some of the other areas that you may want to measure would be voluntary and involuntary separations, high achievers versus low achievers, male versus female, turnover by department, and other variables that may be important to your company. These sub-measures will help you isolate any problem area to allow greater focus of developing targeted solutions.
Employee Turnover – A Runaway Locomotive
This has been a very simplistic view of employee retention/turnover measuring and I hope it has help you in some way. When I speak of other Income Statement and Cash killers such as “Cost Creep,” I call it the silent killer, but Employee Turnover is just the opposite. It is the runaway locomotive barreling down the tracks through the middle of town with everyone running and screaming to get away from it, but very few addressing the large looming issue head on. It’s difficult, there are no doubts about it, but the cost to your organization is extremely high where measurable, and damaging in areas that are unmeasurable.
If you are experiencing high employee turnover, I would encourage you to give me a call. We can work together to solve this issue. It is not one that can be solved overnight, but it is one that can be solved. Think about each employee and the cost associated with them when they walk out the door. The cost is astronomical when you assign a dollar figure to it. And there is also the toll it takes on your residents, those who need change the least.
Next Webinar — “Professional Sales: Back to Basics”
My next webinar is “Sales: Back to Basics—Lessons from Mystery Shopping.” Join us on Thursday, June 25, 2015 at 1:00 p.m. CST. Register here. We look forward to you joining us!
Roy Barker is Director of Special Projects at Moore Diversified Services, a Fort-Worth, Texas-based organization specializing in senior living operations analysis, marketing development, and investment advisory services. Roy is an authority in the field of employee turnover analysis and retention strategies.
Moore Diversified Services presents Plug-In and Prosper Webinars:
Part 2 of 2: 10 Critical Steps to Increase Employee Retention Thursday, April 30 1:00-1:30 p.m. (CDT)
At Moore Diversified Services your success is our goal. We are committed to equipping our clients with tools and strategies to make their businesses successful. MDS would like to offer a special, COMPLIMENTARY webinar on Employee Retention.
Join Roy Barker, Director – Special Projects at MDS, for Part 2 of 2 – “10 Critical Steps to Increase Employee Retention”, steps 6-10, as he provides various ways to increase employee retention. Topics will include:
Create opportunities for advancement
Challenge employees
Praise employees
Develop an awesome company culture
Really get to know your employees
Space is limited. Don’t miss out on this special opportunity to learn from a company with over 40 years of experience.
