While wage increases are believed to overwhelmingly be the best way to recruit and retain staff, labor markets in the long term won’t respond well, according to Reginald Hislop III, managing partner at national advisory group H2 Healthcare LLC.
“Throwing money at the problem,” as Hislop put it, is a very short-term solution and unreliable in gauging how many people will enter and stay in the skilled nursing industry. Hislop spoke during HCPro’s post-acute webinar on Wednesday.
“We get folks jumping, jumping, jumping for economic incentives that tie nothing towards productivity in real work value,” explained Hislop. “We got to be careful as to what we think the real value of just simply jacking the wages will be, beyond somewhat of an initial movement into the market.”
During his presentation, Hislop referenced a graph compiled by the National Investment Center for Seniors Housing & Care (NIC) showing 63% of surveyees believe increasing wages will help attract new staff. Data was collected between June and July 2021.
Hislop added that a sign-on bonus will have minimal impact on staffing overall, and that this particular incentive is tied to very low retention.
“Bidding wars dislocate labor, and they only move the needle a small amount,” said Hislop. “They also have a tendency to have an insidious back bite … we run the risk of disenfranchising existing staff.”
Understanding where pay fits into the overall market and organization is key, Hislop added, placing emphasis on variability of the reward, the type of reward, other than monetary, and frequency of economic incentives.
“In economics, we also go through this philosophy … known as the principle of advancing consumption. Once that dollar is assumed and consumed, it no longer has much relevance. Most people will say, I need more money to live the next lifestyle pack,” noted Hislop.
What does work long-term, according to Hislop, are internal referral programs, job shadowing, and perhaps surprisingly to some, no commitment, agency opportunities that could translate to long-term career choices.
Agency staff are generally more expensive to bring on when factoring in agency fees, and residents aren’t familiar with temporary staff. Dan Suer, administrator at Cincinnati, Ohio-based Hillebrand Nursing & Rehabilitation Center, previously told Skilled Nursing News that agency staff was “…not reliable, not good at the position and generally non-caring.”
Recruiting from agencies and job shadowing fall into the same boat, Hislop said, in that these methods are all about “test driving” a position before jumping in. Agency fees can be cheaper than referral bonuses and marketing campaigns too.
“I’ve got clients that are doing this right through temp agencies … they’re willing to allow the temp agency to do the majority of the work in terms of recruiting and finding people and so on, giving them some extra money,” explained Hislop. “Those temp staff come and work for [an operator, with] a smaller buyout if those temp staff actually join the company. Overall, it’s much cheaper than throwing out referral bonuses and doing a variety of different things on social media.”
Staff that like working for a particular organization will bring in people they want to work with, Hislop said, adding referrals may help more in some cases than human resources interviews.
Referral bonuses especially, rather than sign-on bonuses, are better for retention and recruiting.
Another big one is company culture, regardless of industry, Hislop said during the presentation. He even went on to say that culture matters as much if not more than pay.
“74% of employees believe that company culture is probably the biggest contributing factor to job satisfaction. Think about that. Three quarters of everybody who’s working values job satisfaction — it’s being the biggest contributor to whether they stay or go. More so than money,” Hislop said, referencing data from Apollo Technical, a recruiting source for the tech labor market.
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