By Stephen Tweed
Last week’s Caregiver Quality Today newsletter article “Money Matters More in Recruiting than Retention” got more attention and feedback than any article I’ve written in years.
We received a number of responses ranging from “Right On”, to a connection on LinkedIn who wrote “You continue to make this not about wage. With all due respect, the wage offered is simply not sustainable. Think about if you were trying to feed your family on this wage …. Not.”
Another long time newsletter subscriber wrote, “This is funny. I have been reading surveys for years that say money is not the most important thing to caregivers. Of course, when you survey members of the “choir” this is the response you might expect. How about somebody survey employees outside of our industry to find out what we need to do to get the Walmart, Macys, restaurant workers, and etc. into our industry?”
What are the Advantages of Paying More?
A recent article from Home Care Pulse addressed this question of paying caregivers more. Connor Kunz wrote this:
In any discussion on caregiver turnover, there’s an elephant in the room: the fact that one of the most effective long-term strategies to increase retention and hire better talent is simply paying caregivers more. While it’s not in the cards for most agencies to simply start paying caregivers significantly more without charging clients more, it’s important to track what competing agencies and other sources of competition are offering and frequently evaluate whether it’s time to increase your wages to stay competitive.
The 80th Percentile Concept
A few years ago, I was working with a client on their Strategic Business Growth Plan, and we were discussing being the premium provider of home care in their local marketplace. We came up with what I have now called “The 80th Percentile Concept.” This means studying the bill rates and pay rates of the other leading companies in your local marketplace, and setting a goal to be at the 80th percentile in both. If you charge more, you need to provide more value. One way to do that is to have better quality caregivers, and one path to better caregivers is to pay more. If you can pay at the 80th percentile in your local marketplace, you have the potential to hire the best quality individuals. You can also afford to invest more in your caregivers in terms of training, on-boarding, employee benefits, and retention strategies.
Discuss Your Pricing and Pay Scales with Other Home Care Leaders
While there is no simple answer to pricing and pay, one way to get more insights on what is right for you is to have an in-depth conversation with other owners of similar sized home care companies who do not compete in your local marketplace. You can only do that by being a member of a Home Care CEO Mastermind Group.
To explore membership in a home care mastermind group, visit us at https://ceoforum.leadinghomecare.com/mastermind-groups/