Home care operators have had to work around plenty of new challenges since last spring, from sourcing personal protective equipment to securing Paycheck Protection Program loans. Yet an old operational hurdle remains the toughest to overcome: staffing.
Even amid the pandemic, most home care businesses have managed to grow. That growth has continued in 2021 for many, including the Roseville, California-based Always Best Care, a PE-backed home care franchiser with hundreds of locations nationwide.
To capitalize on current and future growth opportunities, home care providers will need to perfect the art of recruitment and retention, Always Best Care CEO Jake Brown told Home Health Care News. There’s no single silver bullet to doing that, but there are several common-sense actions savvy providers can take now to win the hiring game.
HHCN caught up with Brown for an inside look at Always Best Care’s recruitment and retention practices. Highlights from that conversation with Brown are below, edited for length and clarity.
HHCN: It has been a while since we last connected. What does the Always Best Care system look like as of April 2021?
Brown: As of this moment, we have 213 locations in 29 states. We’re in 100-plus markets overall. In our franchise model, we’ve traditionally had three possible offerings for owners to consider. Those three offerings are non-medical in-home care, assisted living referral services and home health care. I would say that the majority of our business, the core of our business, is the non-medical in-home care area. Assisted living referral services are a relatively small percentage — and it got even smaller last year with the onset of COVID.
I imagine that segment saw some turbulence last year.
It definitely took a hit. It’s slowly but surely rebounding a little bit. The home health segment is also a very small percentage of our overall network. We actually only have three of our franchise owners that have become involved in that. There’s nothing right now in terms of expansion in that category, just given the current environment.
It was an up-and-down year for a lot of health care providers, but many home care organizations have reported growth since last spring. How about Always Best Care?
It was a good-news story for us as well. We experienced solid growth in 2020. We ended the year system-wide at $171 million, which was an increase over the prior year when we did $163 million. So, yes, we saw solid growth in 2020, and it’s continuing to be even better in 2021, which is exciting. We experienced an even higher rate of growth in the first quarter. During Q1, we were at $45.5 million, which was up compared to the same period a year before, when we did $41.8 million.
We have every expectation that’s going to continue throughout the year in 2021.
What are the factors driving that growth? At HHCN, for example, we’ve reported on how more people are beginning to value non-medical home care for its ability to lower costs.
I think that’s absolutely an accurate statement. Some of the acute care organizations or facilities out there, they, all of a sudden, realized just how necessary it is to try to slow down the onslaught of patients into their facilities. It almost feels like overnight, they realized that non-medical in-home care is a good way to help accomplish that goal. At the same time, there have been a lot of issues with long-term care facilities, with clients and patients wanting to migrate out of those places.
There is just clearly a stronger emphasis on being able to be at home right now.
I know you said revenue was up in 2020 and in the early part of this year, but what about growth in the form of new franchise locations or territories?
We had a great Q1 in that respect, too. We actually added five locations in Q1 alone. If that continues, that’s going to put us at a better growth rate than in 2020. We’re excited about that, getting off to such a good start. If that continues, we could increase our number of units by 10% or more. So far, so good.
There’s no shortage of things that you could pick to answer this question. But what do you consider to be the biggest challenge in home care right now?
Without a doubt, the biggest challenge in home care is the availability of really good caregivers. It has obviously always been a challenge in our industry. The demand for care at home continues to go up at a sharp rate. The aging population that needs care continues to grow at a rapid rate. But the number of people who are available and willing to supply that care doesn’t match up. It’s your typical supply-and-demand imbalance.
Those factors already existed, but then you throw on top of that the whole COVID-19 situation, which had a significant impact on the availability of caregivers. Government-funded programs, including more robust unemployment benefits, moved some people out of the workforce. Meanwhile, many other industries outside of ours are vying for this same type of worker. They’re potentially willing to push up pay rates. It’s been a challenging 12 months on the workforce side. If you asked almost any of our franchise owners the same question, that’s it — they’d also say it’s the availability of caregivers.
A lot of providers are forced to turn away clients. Has Always Best Care had to do that?
I would say not so much, fortunately. We’ve mostly been able to care for everyone who needs our services, but not without a lot of pain. Our owners are pretty resourceful and tenacious. They’re always working to fulfill the demand for the services. Sometimes, it may be a difficult job. It could be costly. Sometimes, it may involve, “Okay. Now we’ve got to start paying overtime to meet the demand.” Or it may mean, “We’ve got to scramble just to find somebody.” For the most part, we’re able to manage the crises as they arise. That claim is supported by our growth. We have a significant percentage of our franchise owners growing, which they couldn’t necessarily do if they were turning down business.
Speaking of investing in the home care worker, that’s something that President Joe Biden has talked a lot about — how all Americans should be able to receive care in the home if they want it. It’s more than just talk at this point, too, with the American Rescue Plan and the American Jobs plan both including home-based care provisions. What’s your take on all of that?
It has been interesting to follow. I’m on the board of directors for the Home Care Association of America (HCAOA). Just before talking to you, we scheduled some time to get together as a board to talk about this topic. We’re working to develop our position.
Putting details aside, the one thing I can say is that it’s great to see. It’s great to see home care front-and-center on a national level. But before we get too excited, we have to really understand what these new policies look like. We have to weigh the pros and cons. The American Jobs Plan’s language presents maybe more opportunities for home care workers to unionize. That proposal offers up $400 billion for home- and community-based care, but we need to know exactly how the money would be funneled and directed. But again, it’s nice to see home-based care is coming to the forefront and being recognized as a core component of the continuum of care. And, you know, it’s great that home care professionals are actually being recognized.
The non-medical home care industry is largely private pay. Is there a way to direct the money where private-pay services are truly recognized? Is there a way to maybe set aside funds to directly reimburse those services? This industry is an essential part of the overall care continuum that allows for aging in place. Whatever needs to be done to support private-pay home care organizations, let’s figure it out and do it. I also want to note, though, that a lot of our franchise owners are involved in state Medicaid programs. So, in that regard, we’re not totally unhappy with what we’re seeing.
Circling back to the recruitment and retention point, what is Always Best Care doing to attract and keep its employees?
All of our home care franchise locations are independently owned and operated businesses. As such, they apply their own techniques to achieve that. Corporately, we try to do what we can to drive success in that area. There’s no silver bullet. It’s a function of doing many things consistently. But we’ve tried to assist our franchise owners by driving some lead generation. Our marketing department invests both time and human resources. We use various platforms like Hireology and Indeed. We have a focus on social media, whether it’s Facebook, Twitter or Instagram. We have monthly newsletters that we generate for our franchise owners that we direct toward home care professionals and potential home care professionals. We’re constantly working with our franchise owners to take a look at what they’re doing locally to maximize recruitment — just all the little things that ultimately add up.
Equally important to getting the lead is figuring out how to convert that lead to a hire, so we’re also constantly working with franchise owners on things like timely follow-up with candidates to securing appointments and interviews. From lead generation and conversion, the question is, “Great. We’ve got this person hired, but how do we retain them?” We actually developed an entire caregiver-centric training program.
What we know helps retain caregivers is understanding what their schedule wishes are. The No. 1 item is flexible schedules and convenient assignments. The No. 2 item is ongoing training and certification. You have to have an education program. It almost goes without saying, but the third item is competitive wages. You’ve got to be able to compete and understand what’s going on in your market. Under that, there can be multiple things like maybe a daily-pay option or possible performance bonuses. Lastly, you have to look at what benefits you’re providing. Do you have a recognition program? Do you have a caregiver-satisfaction program? Do you offer health insurance or 401(k) programs?
Let’s shift gears entirely and talk about a big topic over the past couple of weeks: private equity in health care. What has your experience been with private equity?
It has been a very excellent experience. I have thoroughly enjoyed working with Gemini and Plenary. Our deal was done in April 2016. It has just been a great experience since. It has been, I would say, a value-add to our organization. They bring a fair amount of strategic value.
Another thing that we’ve been reporting on pretty frequently here has been the M&A activity that we’re seeing in the home care space. A couple of major deals have happened in 2021.
I did see the two big deals that I think you’re talking about — Seniors Helpers and Home Helpers. I actually communicated with both Peter Ross and Emma Dickison after I heard about them. We’re a pretty close-knit group. I haven’t heard anything else. But, of course, you never know. There was obviously kind of a flurry of activity back in the 2015-2016 timeframe. You may see a cycle again. I think typically these things are held close to the vest until they actually come to fruition.
Any other predictions for home care this year?
I think there’s probably going to be increased regulatory emphasis on non-medical home care. States or governmental bodies may try to increase rules and regulations around licensure requirements. From our perspective, we embrace that. We think that’s a good thing. We believe that helps bring even greater credibility to our industry. Always Best Care is in 29 states. There are a lot of differences from state to state, and we think stronger consistency would be beneficial. Beyond that, I think telehealth is going to continue to play a huge role, with its usage probably growing even more. We’re actually right now doing a pilot test on a telehealth platform. I think the Medicare Advantage plans will continue to evolve. I think non-medical home care will carve out a more prominent standing in that space.