Driven by the ongoing pandemic and a labor crisis unlike any in industry history, average salaries at the nation’s skilled nursing facilities skyrocketed between 2020 and 2021.
That’s according to the Hospital & Healthcare Compensation Service, whose 44th annual report on nursing home salary and benefits trends remains the biggest in the industry.
HCS found hourly pay for certified nurse aides jumped 7.13% on average this year, with non-certified aides gaining an average of 7.98% in pay, and certified medication techs netting an extra 6.75%.
But they weren’t the only winners in a comparison of 2020 and 2021 pay rates.
Salaries for directors of nursing rose by 3.09% to an average of $105,104 at the same sites year-over-year, while assistant DONs saw a 3.36% increase for an average salary of $80,364.
“It’s pretty amazing, the increases for what we’re seeing in the past year,” Matt Leach, principal and senior consultant with Total Compensation Solutions, told McKnight’s Long-Term Care News. “There are jobs that are up 6%, 7%, even 8% year-over-year. It’s just wild. You don’t see that during normal times.”
The average salary for nursing home administrators at the same sites jumped 2.29% to $120,695 in 2021, while assistant administrators realized a 2.27% jump to $74,294.
The HCS Nursing Home Salary & Benefits Report is published by HCS with support from LeadingAge and the American Health Care Association. Published each August, this year’s full, 296-page report includes data from 1,613 nursing homes, covering more than 147,900 employees. It includes regional and national data points.
Of course, all the good wage news for employees in this year’s reports presents, if not bad news, at least a long-term financial challenge for most skilled nursing operators.
Overall, 45.4% of HCS survey respondents said they had to increase their merit raise budgets over the last year. And 79.4% said they had made pay adjustments for “key employees,” most notably through the use of hero or hazard pay.
Just 1.1% said they had tried to compensate by cutting back on employee benefits like paid time off or retirement incentives.
“Everything is going up. Literally every position we recruit for, the salaries have gone up,” says Julie Osborne, director of recruitment for LeaderStat, a national consultancy and executive search firm. “Anything in the clinical space has gone up significantly. Obviously, (providers) can’t keep the doors open without them, so they’re willing to pay high dollars to get the right person in, whether it’s temporary or permanent.”
Across the U.S., providers and recruiters are reporting massive investments in workforce strategies, along with record pay and bonuses.
Trilogy Health Services this summer announced it would pour $8 million into direct wages as a way to attract workers to its 100 locations in Indiana, Kentucky, Michigan and Ohio.
Sign-on bonuses in the hundreds and even in the thousands of dollars have been ubiquitous, with Osborne reporting a head-spinning offer of $18,000 for a management-level position at one facility she advised.
Minimum wage in rear view
Starting wages even for trainees and entry-level workers, such as maintenance helpers and security guards, have exceeded the $15 minimum wage push that has been long called for by some organizations representing industry employees.
According to HCS data, the 50th percentile paid to U.S. CNAs hit $15.23 by early 2021. Still, some providers are forced to go far beyond that: In one California market, operators reportedly were seeking CNAs at a rate of $85 per hour this summer.
But even with pay at those extremely high levels, filling positions remains the industry’s biggest burden.
“It just really speaks to the labor market right now and how there’s a shortage of employees, especially on the healthcare side,” Leach says.
“The hardest part about this is, with these salary movements, and with the current market, it’s almost that you have to pay these rates just to be able to play ball. If you’re looking to really retain people and attract new people, this is the starting point,” he adds.
Turnover for CNAs, already at nearly 40% in 2020, jumped to 51.4% in 2021 as the pandemic entered its second year. Across all nursing home employees, turnover was 38.7%, up from 35.4% in 2020, according to HCS.
After specializing in upper-level nursing home recruitment for decades, LeaderStat this year added CNA search help for the first time in recognition of the crisis its clients were facing.
But it’s a two-pronged problem, as Osborne also witnessed “significant turnover” among upper-level nursing staff and managers.
Operators may need to hire more CNAs, but they face the challenge of having fewer qualified candidates to choose from when it comes to luring nurse managers and executives. Those Osborne tries to recruit are largely uninterested in moving to another director of nursing position, for example.
“Very few are excited to go from one building to another,” despite typical offers at least 10% more pay, she says. “The grass isn’t greener.”
Osborne says one outlier, however, is the MDS coordinator.
Having been called to the frontlines too frequently during the pandemic, such a coding and payment specialist might take a lateral move for not too much more money. But that’s only with assurances that he or she will be given the time to focus on coding and reimbursement tasks, Osborne adds.
The HCS survey found pay increases for MDS coordinators largely mirrored those of other nurse managers, increasing 3.21% from an average of $71,779 to $74,084 in year-over-year numbers from the same facilities.
But across a broad spectrum of positions, employers who will not (or cannot) raise the stakes are in a tenuous position, especially if they want someone with training and experience.
“They might say they don’t want to go above $90K. But as we’re calling competitors in the market and we’re finding the nurses are making $95K or $100K, $102K, the (operators) don’t bat an eye. They say, ‘If this person comes with experience, we will pay what it takes for them to come join us and help with our current situation,’” Osborne says. “The clients that dig their heels in, and don’t do some of the increases, their positions are open for months and months and months.”
Most providers are willing to pay significantly higher starting salaries than just a year ago, even if the person they hire has little to no experience in the role.
Nearly 50% of providers responding to the HCS survey said they now offer free CNA training, a figure that was likely bolstered by state and federal waivers of some nurse aide training requirements during the public health emergency.
And Osborne says more are eager to hire novice leaders, too, including candidates who are just wrapping up an administrator-in-training program.
“The days of employers having three and four candidates to select from, those days are gone,” she counsels clients.
“It’s very much a candidate-driven market. If you’ve got someone and they’ve got the skill that you desire, don’t wait on making the offer because they’re typically looking at multiple options.”
To keep up, providers “need to keep pace, and they need to continually move their salary structure so it can accommodate the changing market, so they’ll be able to not only attract new people but also retain the current individuals,” Leach says.
And although the numbers of vacancies may be highest among direct caregivers such as CNAs, providers can’t assume that’s the only place they’ll need to bolster the payroll. Baseline increases are putting upward pressure on the entire workplace.
Trilogy CEO Leigh Ann Barney told McKnight’s her company’s investment was necessary to remain competitive in the market. Anyone hired moving forward is brought in under a new minimum wage scale, and a quarterly raise for existing employees has increased from 0.75% to 1.5%.
“We have continued in the past two to three years to look at our wage scale for our various categories and made some significant increases about a year ago in our caregiver workforce wages,” Barney says.
“This time, we looked at dining, nursing and other ancillary departments like housing maintenance … just to get more competitive. We felt it was time for us to look at our scale and make adjustments to raise it to market.”
All the work that’s being done now to recruit carries longer-term costs, as many observers predict providers won’t be able to completely walk back hazard pay or reduce the size of annual increases without some pushback.
At the time survey data was finalized — in March — many HCS respondents said they hoped to award annual raises around the 2.5% mark for common positions in 2022.
But then the delta variant hit hard, and another COVID-19 surge and an even tighter labor market may combine to make that goal unlikely.
“If COVID is what it is right now in another year, the expectation will be, ‘I’m still going into the burning building every day,’” Osborne says. “The expectation for that higher crisis pay will still be there.”