Labor accounted for more than half of nursing home expenses in 2021, so managing them now in a climate tighter than ever should begin with a comprehensive review of the hiring and staffing processes, operations experts emphasized Thursday.
But providers first must truly understand what’s relevant for a useful analysis, said Ezedube Eze, regional director of operations with Hill Valley Healthcare in Virginia.
The recommendations came Thursday during a webinar discussion on managing labor costs in SNFs hosted by consulting firm Health Dimensions Group. Advice flowed freely on what is considered by many to be the most pressing topic in long-term care management today.
“You have to really take a microscopic approach to your numbers,” Eze said. “Moreover, you should know where you’re trending — are you trending up, down, or are you neutral? A lot of times when we see lots of numbers, this ‘white noise effect’ comes in and we’re overwhelmed.”
Eze added that providers need to intimately understand drivers behind staff and agency overtime, the costs and effectiveness of bonuses and other incentives, as well as how internal relationships affect costs.
With the current workforce crisis in nursing homes, staff retention is especially critical, said Julia Eiland (pictured), vice president of Consulting, People, and Culture for Health Dimensions. Also vital is conducting a comprehensive analysis of labor costs, starting at the beginning of the hiring process and going through either termination or an employee voluntarily leaving. Hiring managers, schedulers, and Human Resources should be “joined at the hip,” she said.
Eiland added it’s important to know how long it takes to bring new employees onboard — not just the hiring process, but what’s involved in training, showing new hires around facilities, and when someone will begin working. The longer it takes to make an offer and bring somebody onboard, the more likely it is that person will decide to accept another job.
‘In a crisis’
“If we’re able to retain our staff, we’re able to keep our labor costs under control,” Eiland explained. “We are in a staffing crisis — finding the bodies to be able to hire people is a challenge.”
She advised facilities to conduct a SWOT analysis to understand their — Strengths, Weaknesses, Opportunities and Threats — and use that analysis to build a “concrete” plan for managing costs.
It’s also important to utilize technology, Eiland, adding that it’s to the detriment of providers if they are still using spreadsheets or other rudimentary paper products to manage staff and scheduling.
Software, websites and apps that allow employees to view their schedules, and even tap buttons to pick up shifts, can save schedulers valuable time since they don’t have to call around for replacements. Technology also can predict overtime shifts that will be needed and adjust for it, as well as report Payroll-Based Journal hours more efficiently. All of this saves in the long-term, she pointed out.
Chris Krebsbach, chief operations officer at RM Management in Minnesota, said it’s important to celebrate when facilities lower agency costs — which are often among an operator’s most troubling costs. Contract labor costs increased by 64% from 2020 to 2021 (from $2.2 billion to $3.6 billion), according to Centers for Medicare and Medicaid Services data presented during the webinar.
But contracted help for laundry and other support functions such as dietary can be a smart move, Krebsbach added. Food vendors can help develop menus that are easier for slower staffing times such as over weekends or offer assistance with training and dietary knowledge.
“They’re in it with us, too,” he added.