How Much Do People Matter?
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When I speak with senior living operators about what keeps them up at night, most of them talk about the regulatory environment, five star ratings, operating expenses, mergers and acquisitions, EBITA and NOI. Typically, it surrounds profitability and narrowing margins. We dive deeper from there and touch on the topics of occupancy, workers’ compensation, payroll and benefits. You can imagine that the conversation is almost always around cutting these costs.
The question is: How? What’s the common denominator? What’s the easiest way to cut cost, drive occupancy and ultimately generate more NOI? Some say its marketing efforts across all vendors, others say it’s a more robust safety program, and even more say it all depends on how nice your real estate is. And while all of those are essential, what’s typically not discussed is culture…aka people.
People matter! More specifically, your line-level caregivers matter. I would argue that they matter more than anything mentioned above. Not that safety programs, insurance costs, real estate location and insurance programs aren’t extremely important, but rather people are what drive everything that has to do with them. They’re coincidently also the ones driving payroll, workers’ comp claims, safety and most importantly the “feel” of your location and occupancy. They’re your common denominator. They’re your most valuable asset. They set the tone of the building and engage with your residents.
There are a variety of ways to attract and retain talent, assess motivation and find the best line-level caregivers. Spending time and money improving your culture and everyday lives of your employees now will ultimately translate to cost savings and an increase in NOI. How much do people matter? Quite a lot.
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