As the aging population continues to grow, so does the need for home-based care services. But supply isn’t keeping up with demand when it comes to the caregivers required to provide those services, creating fierce competition for workers.
To win over prospective employees, at-home care providers must differentiate themselves. For BrightSpring Health Services, that means offering daily pay to caregivers, whose profession is often characterized by low wages and demanding labor.
“Traditionally in our organization, we’ve paid people in a semi-monthly cycle, and that’s the way we’ve always done it,” Rexanne Domico, president of home health care services and neuro rehabilitation at BrightSpring, told Home Health Care News. “The idea really came up when we started talking about how do we pay more frequently? How can we crack that code?”
Louisville, Kentucky-based BrightSpring, which was formerly known as ResCare, is one of the largest providers of home and community-based health services in the United States. Its home care services line alone employs about 20,000 caregivers, Domico said.
“The problem sometimes for this workforce is the ability to access pay when they need it,” she said.
With one in four caregivers living below the poverty line, that could discourage prospective caregivers and force them into different, more lucrative lines of work. For example, candidates could receive immediate money waiting tables or earn higher wages working for Amazon (Nasdaq: AMZN), which raised its minimum wage for all employees to $15 last year.
“We fully believe that the companies that are able to attract and retain caregivers are the companies that are going to see the growth in the coming months and years in the space,” Domico said. “The ability to solve [for pay challenges] for this workforce is … a huge answer to this problem.”
Digging into daily pay
BrightSpring began exploring its daily pay initiative about a year ago. The program, which is called “Pay Out,” went live at the end of 2018. It allows employees across the organization — not just caregivers — to access pay as it’s earned.
Already, about 9,000 employees are using Pay Out, Domico said, and the program is achieving what it’s meant to: attracting employees and improving retention.
“We are seeing a lot of interest when we’re talking with our applicants about Pay Out,” Domico said. “We see caregivers saying they’re picking up additional hours because they can get paid for those hours quicker than working somewhere else. We also see some early impact on retention with the people who are engaging in daily pay.”
New York City-based DailyPay, a financial solutions company, helps BrightSpring provide the benefit to employees.
DailyPay serves a number of companies in the health care space, including home-based care providers, such as BrightSpring and Menlo Park, California-based home care provider Care Indeed. Vera Bradley, Sprinkles Cupcakes and hundreds of other companies are also clients.
“It is not uncommon for a home healthcare company using DailyPay to see 30% to 50% of its caregiver population enrolled in this benefit,” DailyPay CEO Jason Lee told HHCN. “These same companies have seen on average a 50% reduction of annualized turnover among the population of DailyPay users. The story is very clear: DailyPay is a benefit that caregivers are willing to stay for.”
To take advantage of daily pay, caregivers must first download an app on their phones. After employees complete a shift and BrightSpring confirms the hours, workers can access their wages immediately. When payday comes around, employees are given the remainder of their paycheck.
“It’s very new for us, so some of the results are pending, but I think what’s important in highlighting the program is just the actual determination to do something that’s different and see what the results are going to look like,” Domico said. “Through doing that, we’re likely to be able to attract more people to work, which attracts more opportunity for different types of contracts and relationships with different payers. That’s really what we’re after.”
While BrightSpring is under private equity ownership of KKR, with an affiliate of Walgreens Boots Alliance (Nasdaq: WBA) holding a minority stake, home-based care agencies don’t need deep pockets to pursue daily pay opportunities, Lee said.
“DailyPay is a no-cost to the employer benefit,” He said. “It is free to enroll into the service, and there is only a fee when an employee transfers money on the platform. There is a flat ATM-like fee of $1.99 for next day transfer or $2.99 for an instant transfer. This is usually employee paid, but it can be employer subsidized as well.”
Meanwhile, for BrightSpring, daily pay is a commitment to both industry disruptors and caregivers.
“You can either spend more money trying to attract and retain caregivers — or you can just try to do it better,” Domico said. “That’s where we really landed.”