Another thing to consider is how you provide care. Some of the best agencies are asking themselves the question “If this was my family member, would I be satisfied with the level of care we’re providing?”
#3: Be willing to spend a higher percentage of income on caregiver wages.
On average, Masters are spending 5% more of their total revenue on caregiver wages than other home care agencies. While 5% may not seem significant, it’s enough to offset their competitors and act as a differentiator.
Additionally, about 60% of revenue is used for caregiver wages, and caregivers are receiving about $13/hour. While this is the average for the Masters, the amount paid to caregivers will vary based on state and region.
So, why have the Masters opted to pay their caregivers more?
The agencies we’ve talked to are very passionate about this question. Not only are they striving to increase their revenue, but they’re also focused on providing the best care possible – and in order to do that, they knew they’d have to pay more.
When you’re viewing caregivers as priceless assets instead of replaceable commodities, it’s natural for wages to increase – but along with that is also an increase in the quality of work.
In addition, when agencies are able to pay their caregivers more, they’re also limiting the cost of hiring new caregivers. Typically, there is a direct correlation between increased pay and reduced turnover – and based on the data, the cost of replacing a single caregiver is about 2,600 dollars.
While some agencies have leaders that are keen on budgeting, we’ve heard from others that they don’t have the skills necessary to fill that function. In this scenario, we’d suggest looking for outside help.
Hiring someone to take over your budgeting can be a huge weight off your shoulders, but also allows more time to be spent looking at every dollar used on cost per care. When you’re able to take a closer look at this, you’ll be able to decide where to raise client rates so that you can pay caregivers an attractive rate.
With $15 minimum wages being the new norm, it’s becoming more and more difficult to pay competitively without raising rates. While it’s not always feasible to simply pay a couple of dollars more, there are other things you can do that coincide with caregiver wages and can have a similar effect on satisfaction.
These would include benefits like recognition, ongoing training, and mentorships.
While not every benefit you provide has to cost money, there are some that do; however, they have a high ROI.
One agency told us that their caregivers were repeatedly asking for more ongoing training. Now, after offering and paying for training for all of their caregivers completely, it’s their number one benefit and their employees are more satisfied than ever.