It’s no secret that home-based care providers are struggling when it comes to recruiting and retaining employees. In 2018, turnover in the home care industry hit an all-time high of 82%, while home health saw an average turnover rate of about 21.23%.
Some factors contributing to the problem — such as the tight labor market — are out of agencies’ control. But others — like ill-fitted compensation and benefit plans — can and should be addressed.
“We’re competing with Walmart and Amazon,” said Carolyn Flietstra, executive vice president of home- and community-based services at Grand Rapids, Michigan-based Holland Home and Christian Living Services (CLS). “We use … three compensation methodologies throughout our community services. … Benefits need to be flexible. What works for you, may not work for [someone else].”
Flietstra’s comments came last month during a panel discussion at the National Association for Home Care & Hospice (NAHC) Financial Management Conference in Chicago.
CLS owns several post-acute care companies in Michigan, including Holland Home, which offers home care and hospice, in addition to a variety of other services for seniors.
When it comes to home- and community-based services across CLS, the organization has a patient census of about 1,200 in those areas, Flietstra said.
So far, CLS’s creative approach to compensation and benefits for employees serving those patients has paid off.
For example, its home health companies Atrio Home Health and Atrio Home Health Lakeshore have turnover rates well below the industry average, at 9.86% and 11.11%, respectively. The same is true for its home care company Atrio Help at Home, which has a 37.5% turnover rate.
Doug Himmelein, who was also on the panel, is largely to thank, Flietstra said. Himmelein serves as vice president of HR at Holland Home.
“He’s done all sorts of cool things for our employees,” she said.
Beyond basic benefits
One such change Himmelein helped with is the implementation of cafeteria-style benefits at CLS about 19 years ago. In other words, the employer gives a fixed amount of money to employees to use as they wish on different benefit options.
“The traditional fixed benefit plan does not work,” Himmelein told attendees. “It does not give the choice and options that are needed.”
On the other hand, cafeteria-style benefits plans are designed to offer employees flexibility, allowing each person to hand-pick their own benefits.
“We actually have three different kinds of health insurance, two different types of dental insurance, vision, disability, life insurance, short-term disability and a flexible spending account,” Himmelein said. “It’s a choice based on individual needs.”
And that’s not the only area where CLS employees have a choice. They’re also able to cash out vacation days at the end of the year rather than use them — an attractive point of difference for many lower-level employees and a cost-saver for the company itself, as it saves money when employees take advantage of the perk.
“In today’s environment, I’m paying overtime [to another employee] when someone goes on vacation,” Himmelein said. “A lot of our entry-level staff actually look forward to the end of the year payout because — to be realistic — they don’t have the dollars to go off on vacation. They’re working … two jobs possibly, so this is really of value to them.”
If they choose, employees can also save their unused vacation time and carry as many as 40 hours over to the next year, he said.
On top of that, Himmelein touted CLS’s mobile-optimized human resources information system (HRIS) and wellness program as recruitment and retention boosters.
Having a mobile HRIS is key for home-based care providers to capture new employees, Himmelein said.
“A lot of times when people apply, it’s spontaneous, so you need to have a short application that can be completed with your mobile phone,” Himmelein said. “If you don’t have an application that is very short, simple and easy to do, you’re going to lose out on the opportunity of people applying because they’re going to go to a different company where they can complete the application in five minutes.”
Meanwhile, CLS’s wellness program helps employees succeed financially, physically and socially. On a basic level, it’s a calendar of community events for employees compiled by an intern.
“I thought, ‘How are we going to come up with all these activities?’” Himmelein said. “But there’s a lot that usually takes place in the community — you just need someone to go after those ideas.”
The program also includes access to a success coach for those who need it. The coach helps entry-level employees address barriers such as transportation, utilities and day care.
“It pays for itself over and over,” Himmelein said, noting that the retention rate for those who work with a success coach is 97%. “It’s a hidden secret that’s been very beneficial for us.”
While Himmelein praised what the benefits have done for CLS, he recognized they’re not feasible for all employers.
“Sometimes it’s harder to change your benefit programs, but there are subtle things you can change,” he said.
Some examples include dress codes, vacation time, holidays policies and company culture.
Regardless of the change, he advised attendees to implement them slowly.
“In today’s workforce, we don’t have the option or luxury of having 10 people waiting in line to come workforce … so don’t come in and take a sharp turn,” he said, “Take time to evolve.”
The home-based care industry is notoriously low-paying, meaning agencies must compete with companies such as Amazon for entry-level talent.
While tight profit margins make it hard to raise wages across the board, it is possible to change the way pay is delivered to better attract and retain staff.
“Just because a payroll system is currently used in an hourly way doesn’t mean it can’t be flexed over to use a different model,” panelist Pat Laff — managing principal at home health care consulting firm Laff Associates — told conference attendees. “It’s just a matter of getting the people who run it to understand how to use it.”
While most hourly and salaried pay are most commonly used by home-based care providers, the compensation structures have their weaknesses, Laff said.
“Most of the staff feel short-changed when they’re more productive than somebody else and everybody’s being paid the same,” he said. “There is absolutely no incentive for these clinicians to be productive at all. They’re being paid for the time they put in, not for what they do.”
Instead, he suggested home-based care providers look into incentive-based payment structures for certain employee groups. In this structure, employees are given targets and receive bonuses for exceeding performance thresholds, increasing agency productivity while also boosting employee earning potential.
“If you have staff that you know are just not going to measure up, the best thing to do is to recognize that situation and to help them become productive somewhere else,” Laff said. “And then replace them with staff that will be.”
However, there is no one-size-fits all compensation plan.
For example, CLS uses all three compensation models among its staff.
For the most part, home health medical social workers (MSWs) and speech-language pathologists (SLPs), hospice chaplains, and home health and hospice aides are hourly non-exempt employees.
Hospice extended care RNs and MSWs and management staff are generally salaried exempt.
Meanwhile, home health and hospice RNs, home health PTs and OTs and hospice MSWs have an exempt, incentive-based compensation structure.
“Certain disciplines — and depending if they’re therapists or assistants — are eligible for exempt models, and some are not,” Flietstra said. “After that, we really focused on the [employees] that we had larger concentrations of that probably made the most impact on quality and that were most difficult to hire. These models do tend to attract the kind of clinician that’s efficient and focused on quality. That worked well for the RN, PT, OT.”
Another creative pay strategy CLS is looking at is daily pay, a practice Louisville, Kentucky-based BrightSpring Health Services is already using to boost caregiver recruitment and retention.
“We’re looking at cost and the payout: Is it going to retain the staff?” Himmelein said. “My thought right now is maybe we do weekly pay to start with and then you can actually expand more using this third party I’m looking at to partner with. If I partner with them, I don’t have to hire another person to complete it.”