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Already cited as the No. 1 challenge plaguing home care agencies across the country, the median caregiver turnover rate skyrocketed to 82% in 2018, according to this year’s Home Care Benchmarking Study by market research and education firm Home Care Pulse.
That mark — a new all-time high — is a 15% increase over the previous year.
“I knew [turnover] was going to go up based on some of the factors we’ve seen over the last year or two,” Home Care Pulse founder Aaron Marcum told Home Health Care News.
Nearly 700 home care providers operating across 1,148 locations participated in the 2019 Benchmarking Study, released Wednesday. Combined, the participants represent more than $1.6 billion in annual revenue.
The home care industry has exploded over the past decade, partly thanks to private equity interest and older adults’ overwhelming preference to age in place.
But it’s not just new entrants struggling with turnover, according to Marcum.
In actuality, he said, the bulk of providers that participated in the 2019 Benchmarking Study had been in the industry for 10 or more years.
“I think a lot of people look at that [82%] number and they think, ‘The participants this year must be a lot of inexperienced providers or agencies,’” he said. “It’s actually the opposite of that. How many years you’ve been in business can impact [turnover], but overall it’s how you operate the business.”
Turnover explained
Of the roughly 700 providers that participated in the Home Care Pulse study, more than 63% operated within franchise networks, with 28% operating as independents and the remainder standing as part of a home health agency, hospital system or membership network.
Turnover was so severe in 2018 that more than half of the participants had to turn away new clients because they didn’t have enough caregivers.
“That’s an alarming fact,” Marcum said. “They’re not able to grow their companies because of the shortage.”
Throughout the industry, home care providers have taken several measures to curb turnover rates and keep their caregivers on staff. Some of the most successful approaches have focused on better onboarding processes and more widely available training, particularly when it comes to older adults living with Alzheimer’s disease or other forms of dementia.
In general, experts say, specialized training programs help with turnover because they offer caregivers a career ladder and, in theory, opportunities to make more money.
Different hours, better management and new clients are among the top reasons caregivers leave their agencies, according to Home Care Pulse. More money is also a top reason, with an increasingly larger share of caregivers shifting into retail and food service positions that offer higher pay.
In October, for example, online retailer Amazon (Nazdaq: AMZN) moved to raise its minimum wage to $15 for all full-time, part-time, temporary and seasonal employees, regardless of where they work or what their position is.
Up to 12% of caregivers say they have interviewed or worked for Amazon over the past year, research from online job board myCNAjobs suggests.
“What we’re hearing is they’re competing not just against other home care providers — but against Amazon and even the Burger Kings of the world, companies that are paying more than they’ve ever paid before,” Marcum said.
In some places, home care providers have been forced to raise their wages, making retail competition somewhat of a moot point. On the state level, more than two dozen states and Washington, D.C., had wage floors higher than the federal minimum as of Jan. 1, 2019, according to the Department of Labor Department.
“We as an industry, are going to have to find the balance of what we bill and what we pay,” Marcum said. “We may lose some margin in this effort, but we’re going to have to pay more. In some states, it’s a forced issue. But even when it’s not, providers will have to get ahead of the curve.”….(readmore)
