Many home care agencies miss out on profits by over-hiring office staff or sacrifice quality by under-hiring. Here’s how to find the sweet spot.
In last week’s Letter From the CEO, Aaron Marcum discussed the importance of finding the right people and getting them in the right seats within your organization. This time, we’re shifting gears a little bit. Instead of talking about what qualities to look for, we’re tackling logistical questions:
How many office staff should you hire?
Which positions should be filled first?
Is your staffing efficient or could it be done with fewer people?
When should you hire for additional positions like staffing coordinators?
While the answers may vary a little depending on your agency’s circumstances and needs, benchmarking data and a decade of helping home care agencies grow has provided us with plenty of insights to point you in the right direction.
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How Many Staff Members, and Which Roles?
Most positions with your agency can be conveniently divided into four functions: executive management, marketing/sales, finance, and operations. Depending on your agency’s size and capabilities, it’s generally best to have each member of your team concentrate in one of these areas so that they can specialize.
For example, it goes without saying that the skills required for a sales rep are going to be very different than the skills required for a care coordinator. Creating roles specializing in one area will you help you maximize your team’s effectiveness.
Generally, the roles needed in a home care agency fit into the following structure:
Executive Management: Owner or executive
Financial: Office Administrator (payroll, billing, secretarial)
Marketing/sales: Outreach Director
Operations: staffing coordinators, schedulers, and care supervisors
Obviously, agencies of different sizes have different capabilities when it comes to filling positions. This staffing summary from the 2018 Home Care Benchmarking Study gives an idea of which positions agencies are able to fill depending on their size. Numbers represent the median number of individuals who occupy each position in an agency within that revenue range.
Note: More detailed information, including median salary ranges for office staff, can be found in the 2018 Home Care Benchmarking Study. It should be noted that the staffing summary above uses 2016 data.
A few other points that may be useful to you:
Many agency owners wonder how many staffing coordinators to hire. According to our most recent data on the topic, the median ratio of caregivers to staffing coordinator is about 50. In other words, you should plan to hire one scheduling coordinator for every 50 caregivers you employ.
Over the last two years, staffing has becoming much leaner—the average agency today has about one less office staff member than it did two years ago. If you’re feeling stretched, you’re not the only one.
Not Too Many, Not Too Few
As you go about filling your office staff team, it’s important to keep the balance between having enough staff to provide high-quality service, while remaining as lean as possible to maximize profits.
One very useful metric to identify this balance is sales per full-time employee. This number is just what it sounds like: how much revenue is your agency generating for the number of staff you employ? By calculating it and benchmarking it against other agencies in the industry, you can get a good general idea of whether you are operating in the optimal range of staff or not.
To calculate sales per full-time employee, simply divide your annual (or 12-month trailing) revenue by the number of full-time employees you have, excluding caregivers. Include active owners in this calculation, and count part-time employees as .5.
If you’ve come this far, you’re ahead of the curve; in a 2016 poll we conducted during a webinar, less than 25% of agency owners surveyed knew their sales per full-time employee ratio.
Once you’ve calculated yours, compare it to this data from the 2018 Home Care Benchmarking Study to see if you’re in the same ballpark as other agencies:
A number that is significantly lower than the median for your revenue range would be a strong indicator that you need to become leaner by concentrating responsibilities with the people best able to perform them and cutting out unnecessary positions.
A number that it is significantly higher than the median for your revenue range might be a cause for concern as well, as it might indicate that you are sacrificing quality for efficiency. Seek a good balance.
More information, including median sales per full-time employee by region, is available in the 2018 Home Care Benchmarking Study.
A final note: if your agency is anticipating strong growth in the near future, you may hire more office staff than you would need at current levels and thus end up with a very low sales per full-time employee. If this is your deliberate strategy, this may justify a low ratio, but be very cautious hiring more employees than you currently need.
Home Care Isn’t One-Size-Fits-All
It’s important to remember that while benchmarking data provides strong indicators of what works for most home care agencies, it rarely provides blanket solutions for every agency. Use the data as context for your own decisions, but make those decisions based on the needs and circumstances of your own agency.
What challenges have you faced with staffing? What helped? Let us know in the comments below!
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