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Three things you need to know about staffing your AL/MC facility

March 7, 2016 Article 4 min read
Christy VanDeWater Dana Wollschlager Plante Moran Living Forward
Assessing your staffing levels by comparing them to benchmarks is just the first step to a healthier operating margin, satisfied residents, and happier staff.

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As an owner or operator of an assisted living/memory care facility, one of your biggest concerns is balancing your staffing levels to reach three conflicting goals: effectively meeting your residents’ needs, providing adequate staff support, and controlling operating costs.

To help you manage this careful balancing act, here are a few things you should know about staffing your assisted living/memory care facility.

1. Benchmarks are available to guide your decision-making.

You’ve probably noticed that the federal and state governments — our usual go-to sources for data and information — don’t offer staffing benchmarks for assisted living and memory care facilities. And unless you own a large, multisite assisted living or memory care provider, it’s unlikely you have huge in-house data stores gleaned from hundreds of sites. Ultimately, this leaves you with one option: making an educated guess based on what worked for your facility in prior years. However, given the fluidity of both large-scale factors like industry trends and technology and small-scale factors like resident acuity levels, this is not the best option.

The good news is that benchmarks for staffing your assisted living/memory care facility do exist, although they are admittedly hard to pin down. Industry seminars and conferences are often good resources, as are national senior care affiliations. These kinds of groups may have subgroups or committees with data taken from samples of their member organizations. You also have the option of engaging firms like Plante Moran Living Forward, which have access to strong national and regional data in addition to the expertise to analyze and recommend the best staffing levels for your unique situation.

2. Staffing levels and wage rates should change with the times.

Staffing levels must be monitored and assessed quarterly, perhaps even daily. This is the only way you can be sure your residents are receiving adequate care and your staff have the support they need to effectively do their jobs.

The biggest factors here are acuity and number of residents: As acuity levels change within the facility, so should staffing levels. As number of residents change, staff counts should too. Too few staff could mean resident care suffers and stressed staff take flight. Too many staff and you find their productivity plummets and your operating margin flinches under the added weight of their wages.

Despite its importance, staffing levels are easy to overlook. Existing providers often don’t assess their staffing levels until too late: costs are going up, the organization is running at a negative operating margin, and they wonder what’s going on. So they hire a consulting firm like ours to assess the problem. Often the first thing they want us to do is compare staffing levels and wage rates to benchmarks so they can determine if adjustments are needed. Since salary expenses account for approximately 50 percent of your organization’s expenses, regular assessment of your staffing levels and wage rates are key to controlling costs and remaining competitive in the market.

Providers across the country face added cost concerns as minimum wage rates increase and extending overtime pay to currently exempt workers becomes a possibility. Maintaining pay competitiveness with other senior housing providers in the area — as well as organizations in other industries — is vital to preserving a stable work force. Performing an analysis under different wage rate scenarios can help your community plan accordingly so you do not have to absorb all of the costs.

3. Staffing levels may not be the only issue if your margins are low.

While labor is a significant line item and adjustments to inappropriate staffing levels may mitigate this cost, sometimes you’ll find your facility is already in line with established benchmarks. At this point you may want to consider a deeper dive into the facility’s operations before you make staff adjustments in case the problem lies a little further under the surface. Perhaps the right staff aren’t doing the right jobs or there’s a procedural inefficiency tying up a portion of their time.

When a consulting firm like Plante Moran Living Forward is engaged to assess staffing levels and salaries, it is usually done as part of an operations review.  We can also take a deeper dive by measuring the service offerings against the costs to perform the services with our Price Point analysis. These kinds of analyses take into account every aspect of your organization — from staff levels to services offerings — to see how they play into each other.

What are you waiting for?

Assessing your staffing levels by comparing them to benchmarks is just the first step to a healthier operating margin, satisfied residents, and happier staff. Implementing the appropriate staffing levels and regularly monitoring them as your organization changes are next. Don’t wait to start the process.

We’ve helped many assisted living, independent living, memory care, home health, and skilled nursing facilities assess their staff levels, operations, pricing, and cash flow. We would be glad to help yours as well. Let’s start a conversation today.

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