Caregiver Turnover Rate Falls to 64% as Home Care Agencies ‘Flatten the Curve’

Home care agencies have spent the past few months doing their part to flatten the COVID-19 curve. It now appears they’re having success flattening the caregiver-turnover curve, too.

Historically, home care has been an industry plagued by sky-high caregiver turnover rates, a challenge largely attributed to agencies offering low pay, weak benefits and few training opportunities. In fact, the problem came to a head in 2018, with the industry’s turnover rate hitting an all-time high of 82%, according to Home Care Pulse, an Idaho-based market research and education firm.

That all changed in 2019, Home Care Pulse CEO Erik Madsen told Home Health Care News.

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“Home care owners knew they had this tsunami coming toward them and that they needed to [take steps] to mitigate the challenges of caregiver turnover,” Madsen said. “About three years ago, that started to happen. As a result, we’re starting to see a flattening of the curve with turnover.”

“It’s a terrible but very effective analogy right now,” he added.

Home Care Pulse reports on industry turnover and other trends in its annual Home Care Benchmarking Study. It released its 11th edition looking at the state of home care in 2019 on Tuesday.

After 2018’s all-time high, the median caregiver turnover rate plummeted to 64.3% last year, according to the benchmarking study. In addition to being a drastic improvement over two years ago, that figure is also lower than median caregiver turnover rates in both 2017 and 2016.

There is no single reason why caregivers are now staying at their agencies more frequently now compared to recent years, according to Madsen. In reality, it’s a combination of factors, some of which are far broader than the home care industry itself.

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One likely explanation is better pay.

Pay rates for live-in caregivers have increased by roughly 30% over the past three years, the Home Care Benchmarking Study shows. Meanwhile, pay rates for personal care attendants and certified nurse assistants (CNAs) have similarly increased by about 14% over the past four years, with companion pay up 13%.

“There were things that agency owners started to do with increasing pay-rate numbers a few years ago that I think have helped mitigate the turnover curve,” Madsen said.

More readily available training opportunities and stronger benefits are other explanations for the improvement.

Of the nearly 900 home care organizations that participated in the 2019 benchmarking study, about 64% reported using a professional training program to support caregiver development. Nearly 81% of participants reported providing employee benefits, with some of the most common examples being travel reimbursement, paid time off and 401(k) matching.

Perhaps unsurprisingly, as caregiver training, benefits and other perks became more commonplace in 2019, overall job satisfaction, in turn, improved to record levels, Madsen noted

“To me, the thing that was most impressive in 2019 was that caregivers felt the greatest increase in their satisfaction when it came to training received,” he said. “[More] agencies started investing in their caregivers, helping to make sure they had the qualifications, the skills, the tools they needed to go out and do this job.”

Economic impacts

Macro-level factors have likely lessened turnover as well.

In the past, home care turnover was often exacerbated by the strong U.S. economy, low unemployment rates and rising hourly wages in competing sectors, including retail and fast food. Essentially, caregivers had the choice of either sticking it out in a demanding, high-stress job — or cutting bait for a chance to work a possibly easier job at an Amazon warehouse or McDonalds.

On June 8, however, the National Bureau of Economic Research (NBER) officially declared that the United States had entered into a recession in February, ending 128 straight months of economic growth. On top of that, more than 40 million Americans are now unemployed due to disruption caused by the coronavirus.

In other words, the hiring market has shifted away from job applicants and toward employers.

It’s a shift that likely started happening even before February, according to Madsen.

“I actually think the downturn started in the middle of last year at some point,” he said. “As a result of that, we maybe saw more people being available, maybe not jumping from company to company, as they were before.”

While it’s difficult to predict exactly how a recession will affect home care agencies moving forward, Madsen expects caregiver turnover rates to continue improving for the foreseeable future.

That’s particularly true when it comes to the home care agencies that invest in their company culture, treat their workers with respect and double down on their mission of caring for seniors.

“I think you’re going to see caregiver turnover actually trend downward, at least for the next 18 months,” he said.

‘A $13,000 painting’

Recruiting new caregivers has also, at times, been a challenge for some home care agencies.

And it turns out that it’s closely related to turnover.

For the most part, internet-based services are the most commonly used recruiting tools for home care agencies, with existing employees being the next most widely used tactic. Despite the popularity, caregivers sourced from internet-based recruiting methods are typically the most likely to leave an agency, according to the benchmarking study.

“A lot of recruiting is internet-based,” Madsen said. “I think technology definitely has a place in the recruitment and retention of caregivers, but I also know that this is a people business. … It still requires a human touch to be to be the most effective.”

If home care agencies are debating the value of investing in retention strategies, they should also consider this: In 2019, the average median revenue generated by each caregiver was over $13,000.

Madsen hopes more home care owners will see that statistic and start appreciating the value of their caregivers, treating them more like precious heirlooms or pieces of art as opposed to commodities.

“Too many people treat caregivers like a gallon of milk instead of the priceless assets they are,” he said. “If you knew [a caregiver] was more like a $13,000 painting versus a $3.50 gallon of milk, you’re going to treat them differently, right?”

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