How Caregiver Wage Increases Will Impact Care Organizations in 2019

Right now, the caregiving industry is having problems meeting the demand for care. There are not enough caregivers or people going into the field of caregiving, which pushes up the wages for the entire industry.

Why are caregiver wages increasing?   

The most commonly covered reason as to why caregiver wages are increasing is because of the combination of wage regulation and the limited supply of caregivers. It is simple economics that higher demand for a job will to some degree command for higher wages for that job.

Caregiving is a tough job and requires a compassionate person with a good heart.

Caregivers are also expected to know a unique combination of specialized skills to get the job done. Similar to nursing, caregivers are required to complete continued education and are expected to work difficult hours. As a result, caregivers are moving into different industries and choosing different career paths.

At the same time, we are also seeing that the cost of living is going up, especially in the most popular retirement locations like Orange County, California. Just recently, in 2017, Disney faced criticism surrounding its employee wages. Located in the heart of Orange County, the company was surprised to find out that many of its employees were dealing with homelessness and needed to sacrifice holidays gifts to pay their bills.

As an employer, you need to strike the right balance of providing the right pay and benefits to employees while keeping healthy profit margins. One of our Senior Care clients went through the exercises of asking for honest feedback from their employees. Which helped them become aware of the fact that three caregivers were homeless (living out of their car, couch surfing, etc). Which goes to show that the wage increase should not be ignored!  

“A caregiver can only provide good care when they are able to care for themselves first.” – Keith Freeman, Strategic Consultant at Sixth Sense Solutions


What wage should Caregivers in California get?

In California, the current average wage for In-Home Supportive Services (IHSS) providers is a little over $11 per hour, $0.50 above the current statewide minimum. The minimum will increase to $12 per hour and above (depending on the region) at the beginning of 2019. At which point the Legislative Analyst’s Office of California projects that these costs of the scheduled minimum wage increase will begin to affect business profits negatively.

Looking at the bigger picture, business owners need to put their ego aside and ask themselves what they SHOULD be paying their caregivers. Figure out how it translates to your profitability as an organization and determine what is the appropriate amount is to keep your talent.

How does the caregiver wage increase impact healthcare organizations?

Caregiver wages will influence, to some extent, your client retention, client conversion, marketing spend, return on investment, quality of care, and many more things. As a business owner or administrator, you should shift your focus away from the bottom line and consider how much profit your business will get in future returns for investing in your caregivers today.

“When the well’s dry, we know the worth of water.” – Benjamin Franklin

Anticipating the costs is going to be critical this year. Both because you will need to spend more to hire quality caregivers, as it is more competitive, and because caregivers are more likely to leave your organization for another healthcare agency if you cannot meet their expectations. If you want your business to make it through 2019, you need to begin thinking about ways to keep your caregivers happy and your pipeline of new hires full.

What are ways to provide caregivers what they want to and to become an employer of choice?  

We understand that not every Home Health agency and Assisted Living facility has an endless reserve to pay for the caregiver wage increases and costs associated with the changes in the industry. Which is why we have cost-effective programs to keep caregivers happy and help these agencies and facilities attract new staff.

3 Ways to Keep Your Caregivers Happy

1. Communicate With Your Caregivers

Caregivers are high-touch people. Leadership needs to provide an open channel of communication to keep your caregivers engaged. As a leader, your communication with your employees sets the precedent for the whole organization. Mastering the art of communication can help grow your business, make your team more effective and also attract new employees and clients to work with you

2. Provide On-Going Performance Evaluations

Organizations will benefit from a methodology of on-going performance evaluation and feedback. These evaluations are also the perfect time to communicate regulation changes with your caregivers, to maintain your mission of providing quality care, and help you uncover hidden deficiencies to be able to fix something you cannot see is broken.

3. Offer Training & Development Programs

Effective training that translates into the field to fulfill the true purpose of quality-driven patient outcomes is difficult for many healthcare businesses to provide. If you can provide QUALITY training and development programs to all your current employees and provide detailed training programs for all your new staff, you will have a competitive edge.

Let’s Discover Your 2019 Strategy

Healthcare businesses have a different set of inefficiencies and therefore need different strategies to help their business grow. By engaging your “sixth sense”, you will find creative ways to ensure your caregivers have what they need to be successful in their jobs. Most importantly, your unique offering will ensure that they are happy with their job and will stay with you for many years to come.

Get a FREE Strategy From Sixth Sense Solutions

We are currently offering a full strategic analysis for business owners who are serious about providing quality care and employment. Our strategic consultants will meet with you for a complimentary Discover Meeting to learn about your business. From there, you will be given a full strategic analysis of business improvements spanning across your recruitment, internal operations, finances, and communications.

Learn more about this offer here.


About the Author

Keith Freeman, MBA

A dynamic thinker with a great sense of humor, Keith Freeman, MBA, is a Strategic Consultant offering unique solutions to transform healthcare organizations such as hospitals, hospice/palliative, home health, and home care, RCFE/assisted living and skilled nursing facilities and professional healthcare staffing services that support them.

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