The Advantages of Paying More
With many home care agencies operating on thin margins already, raising wages can be a tough proposition. However, agencies that fail to pay competitively will run the risk of not having enough employees even to staff their existing cases.
According to a poll we conducted of over 400 agencies during a webinar earlier this year, over 60% of agencies have turned down a case in the last 90 days because they didn’t have the caregivers to staff it.
Not only does paying more help you attract more applicants, but it makes your current employees more likely to stick with your agency. According to the 2019 Home Care Benchmarking Study, every $1/hour increase in pay for your caregivers results in a 10% decrease in caregiver turnover. A year ago, a $1/hour increase only resulted in a 5% decrease in turnover.
In other words, paying more has twice as much impact on retention as it did just a year ago.
And with the average cost of replacing a caregiver at $2,600 once you factor in hidden and indirect costs, the cost of not paying competitively adds up quickly.
What the Competition is Paying
So, how can you tell whether the wages you’re paying are in the right ballpark? Let’s turn to the 2019 Home Care Benchmarking Study.
Here’s what home care agencies in the study reported paying their caregivers in 2018, split up by role: