While staffing and inflation continue to challenge senior living leaders, there’s a new hurdle on the horizon: studies show that COVID-19 increases the likelihood of dementia.
That’s troubling, given that the majority of the US population has now experienced at least one COVID infection. In the near term, it suggests that senior living will continue facing a skew toward higher-acuity residents.
Let’s take a look at how this could impact the industry in an environment where investors and developers are increasingly embracing the era of active adult.
1. Demand for Higher-Acuity Care Will Outpace Supply
The industry has been preparing for the Silver Tsunami for years now; by 2030, when the youngest Boomers turn 65, the country will be home to 73 million “older adults” (compared with just 55 million today).
Much of that preparation, however, started before COVID-19 hit – and certainly before last year’s study that found that half of older adults who contracted the virus displayed persistent memory problems after.
Responses to the latest NIC Wave survey illustrate the potential mismatch in supply and demand: 54 percent of operators plan to expand their operations in independent living in the next year, compared with just 33 percent for memory care and 31 percent for assisted living. What’s more, while just two percent of operators plan to decrease IL portfolio holdings, five percent plan to shrink MC.
Then there’s the growth in active adult. While that sector is still finding its footing, 36 percent of operators plan to grow their holdings and 61 percent plan to hold steady.
Given the current labor crunch, these numbers aren’t surprising: operators can staff active adult like any multifamily building while charging something like a 20 percent rental premium. Those numbers are compelling. With higher acuity comes greater staffing needs and, of course, margin compression.
Still, the reality ahead of us is that more and more residents will require high-touch care. Communities that can make the margins work will have a massive opportunity to serve this group. Key to doing that will be solving the labor puzzle.
2. Communities that Develop Staffing Pipelines Will Win
As of April, 89 percent of senior living operators consider attracting staff one of their biggest challenges. In fact, 75 percent of communities are still relying on agency staffing to get by. This model has never been sustainable; as residents increase in number and acuity, it will prove disastrous.
So how can communities recruit and retain workers better to break the cycle of agency dependence? Senior Housing News recently highlighted some compelling models:
Florida-based continuing care community Westminster Oaks established partnerships with local high schools and Florida State University to fill entry-level positions. Westminster also partnered with Lutheran Services of Florida to hire Afghani refugees who have resettled in the US.
Boston-based 2Life Communities is attracting employees by extending its talent search to diverse job networks and offering competitive benefits. These perks range from retirement benefit contributions to a company advisor who handles all employee health insurance inquiries.
The staffing crisis won’t resolve on its own. Communities that want to meet labor demands moving forward will need to build and nurture their pipeline for the long term.
3. Marketing Must Compensate for Higher Resident Turnover
Senior living residents’ average age today is 84. With acuity likely to rise in the coming years, we can expect turnover to increase as well, meaning operators will have to invest in multichannel marketing efforts that keep the top of the funnel full.
What might this look like?
- Building referral relationships with physicians, physical therapy offices, skilled nursing facilities, and anyone else who serves a customer base of older adults.
- Making sure website collateral is updated and accurate (e.g., videos, brochures, and website copy should address COVID safety protocol).
- Reaching potential residents and their families in new channels. Advertising on social media, for example, can help communities build positive brand associations with adult children who have a say in their parents’ next home.
- Building a brand in the larger community – and especially its older residents (including those in nearby active adult communities). This might look like opening to community attendance for certain events.
Curious about active adult communities in the works in your metro? Get in touch and we’ll pull the data.
An Opportunity to Anticipate Emerging Needs
The last two years have redefined “normal” – multiple times. As research emerges about how the long tail of COVID might manifest, there’s a good chance senior living will see even more “new normals” in the coming years.
For operators prepared to adjust and adapt, the opportunity will be significant.