Ep. 66: How Home Care Agencies Can Compete for Employees While Offering Lower Wages

Miriam Allred (00:08):

Without further ado I will introduce Gabby Hoing. She’s the Owner of Kore Cares in Sioux falls, South Dakota. She’s joinedd me on the podcast before, but she’s having a lot of success through the ongoing pandemic and recruiting challenges right now. So I wanted to bring her back on and I’m excited to have her join today with all of you. So Gabby, welcome!

Gabby Hoing (00:29):

Thank you for having me today.

Miriam Allred (00:31):

We’re going to talk about how we can continue to compete for employees while offering lower wages. So Gabby, let’s just start there, you know, how are you competing locally? Talk about, you know, who your competitors are and what you’re doing to kind of get ahead, even though typically in home care, we’re offering maybe a lower wage.

Gabby Hoing (00:54):

Yeah. So the landscape has changed a little bit. Our competition really has broadened as far as employees because we’ve got, you know, Walmarts, we’ve got Amazon moving into the market. We’ve got big industries like manufacturers moving into the market. South Dakota never really shut down during COVID. And so that attracted a lot of businesses here. So there’s been a ton of growth and a ton of need for entry-level positions. So our unemployment rate right now is 1.9%, which is the lowest it’s been in 21 years. It’s estimated there’s 7,000 job openings in Sioux falls. And just to put that in context, Sioux falls has a population of around 200,000 with the Metro. It’s about 275,000. So we can’t really have 7,000 job openings, but no one really to fill them. You know, McDonald’s started out the year and they said, we’re going to move us to just, shouldn’t say, start out the year, started out in like may and said, we’re going to move our starting wage from 11 to 13.

Gabby Hoing (02:04):

And now we’ve seen them go to 14 and some positions they’re starting at $15 an hour. You know, Walmart and Costco are between 15 and $17 per hour. And one of our biggest healthcare providers here in Sioux falls, I think it was around may timeframe. They said they were going to move their minimum wage to 15. And then in October they said, they’re moving it to 17. So that means they’re high. CNA is patient care techs, housekeeping at a minimum of seven to $17 per hour. So there’s been a lot of movement with wages in this market because there is such a huge need for entry level providers. And so, or workers I should say. So we’ve had to move our wage scale. Significantly we’ve moved at four times. We’ve just at four times in the last year. Wow. Trying to keep pace. Yeah.

Miriam Allred (02:56):

Four times you are raising client rates to help counter being able to offer your employees more. So you just mentioned that you raised your wages four times. What has been your take on raising rates in conjunction with raising wages? So,

Gabby Hoing (03:15):

So in, I think it was about July, June, July. We moved from around $29 per hour to around $32 per hour for client rates. So we made a $3 jump this summer and after the first a year, unfortunately we may need to make another jump. Just because we just continue to increase and it’s not just wages. You know, these employees can get benefits that a lot of these other establishments, they can get PTO, they can get health insurance, they can get dental and vision retirement plans. So at work here is we do offer PTO. We offer a retirement plan and we do offer health insurance. We don’t do family plans, but we do offer plans for individuals that work here just to stay competitive with others in the market as well and help retain some of those caregivers. Now it’s, it’s a big retention effort that we have going on here because once you get them in the door, you really want to keep them because it’s so hard to replace them. If they do turnover,

Miriam Allred (04:20):

Let’s talk a little bit about that. What, how have applications ebb and flow, you know, for awhile there, it was like, no one was even getting applications. It seems like there’s kind of an uptick in applications, but then, you know, maybe the challenge is getting people in for interviews and to show up what has been kind of your ebb and flow the last six months with applications and bringing on new staff.

Gabby Hoing (04:42):

Yeah, it really does fluctuate. We try to be really good at refreshing our job ads. I constantly going out there and see, you know, what does everyone else have in their job ads? How can I tweak mine? I get on webinars to kind of figure out what, what can we do to tweak our job ads a little bit to make them a more enticing. So I do notice that every time I tweak them a little bit, you know, we get another little uptick in applications. So I guess that’d be one piece of advice if you’re not regularly editing and updating your job ads, you probably should be taking a look at that.

Miriam Allred (05:19):

And yeah, just analyzing your competition’s job ads, you know, what are they offering? You guys are offering what sounds like pretty good benefits, PTO and medical. You know, some agencies may not be offering that, but just knowing what your competitors are offering, you know, shopping their job ads so that you can improve your own ads and be offering something that’s, that’s competitive. That’s great to hear. Let’s, let’s get back a little bit to the rates. So you mentioned, I’m just kind of regrouping. You had mentioned you went from 29 to 32 on the client side and remind me what you raised your wages to, you know, you raised them four times. What were you starting at and where are you guys at now?

Gabby Hoing (06:00):

I can’t even remember what we started at. I think we were maybe around 13. Might’ve been that last fall. I want to say maybe we were around 13. And now we’re in the 15 to 17 range depending on experience. So definitely have moved the needle quite a bit in the last.

Miriam Allred (06:23):

Sure, absolutely. And I had asked you this before you, your agency specifically has always hired people without experience, correct?

Gabby Hoing (06:32):

Correct. And we do, we have a training room here with a mannequin, so we can do hands-on training right in our office. And then we have online learning courses that we used to train people with. And then we also go to the client’s homes and do introductions and hands-on training and home, which has worked well for us. And in this environment you have to be able to hire people that maybe not have all experience. I always clients always get nervous. They’re like, oh, we had a bad experience with another home care agency that didn’t have trained staff. And I, so sometimes, you know, they don’t take the time to train the staff and that’s part of the problem, but a lot of our great caregivers, you know, just have a heart for caring. If they have the heart for caring, we can train them to give baths and help people with personal cares. As long as they have good intentions and have the passion for

Miriam Allred (07:23):

Pre pandemic, maybe some of our agencies we’re hiring people with past experience, but we are to the point where, you know, a lot of agencies have had to shift gears and have had to change their narrative of, okay, we’re going to hire people that don’t have experience, but we’re going to do all that training. And I think you’re right. It just kind of comes down to their heart and their intention. If, if it’s something that they want to do and training can also become, you know, a value add some of these other big box corporate stores may not be offering training that’s above and beyond customer service. And so giving them training that they can take with them into potentially another medical career or, you know, wherever they’re headed, it’s it can be kind of a value add. Have you seen that at all?

Gabby Hoing (08:08):

Oh yeah. You know, and, and for the college students that maybe need a little experience and, you know, a flexible schedule, that’s perfect for them because then I can get that experience and put that on that resume, you know, they have had that hands-on experience. And then, yeah, like you said, use it to further their career down the road

Miriam Allred (08:28):

And I’m kind of jumping around here, but I want to talk about, so your agency is maybe about 60% private pay and then 40 Medicaid VA back to kind of the rate concept, you know, what has been your overall approach pre pandemic and during the pandemic raising your client rates? You know, I think we hear a lot from providers that they’re, they’re hesitant to raise rates, but, you know, with the recruitment challenges, the way they are, we almost have to raise our rates to be able to meet the growing demand. So what’s just been your approach in general to raising rates. And what has the response been from your clients as you have raised rates?

Gabby Hoing (09:07):

So I’d say this is the biggest jump we’ve had in a while, you know, $3 an hour from 29 to 32 this past year. And I was nervous about it and I’m, I worry about myself in the future. What is home care rates going to look like? You know, when I need it someday. So I hate to see them, you know, for the future generation that needs home care, get out of control, but also for our clients today, you know, we want to remain affordable. So I was pretty nervous about moving that far. And we didn’t lose any, a single client over raising rates. They seem pretty understanding you know, that, that this is the way it needed to be and with inflation and what the job market, you know, they were, they were very understanding with our rate increase.

Miriam Allred (09:59):

And I think that’s just, it, a lot of times we’re nervous or really hesitant, but I hear that a lot from providers, you know, okay. We decided to raise our rates, you know, maybe we have one client reach out and complain or one client leave, but it’s pretty minimal. So I think it’s worth looking into and deciding what’s right for your agency. Anyone want to come off new and share their experience?

Susan (10:24):

We raised our rates at the beginning of 2021. And we did not have a single complaint from any client.

Miriam Allred (10:32):

Thanks for sharing Susan. You said at the beginning of 2021, you’ve just raised them once in the last two years.

Susan (10:38):

We do plan to, again at the beginning of 2022.

Miriam Allred (10:42):

That’s great to hear. Thanks for timing. Let’s talk a little bit about the, the Medicaid side of your business, Gabby. What does that look like? Is there, has there been many changes on rates on that front and is there anything that you’ve done to adjust accordingly?

Gabby Hoing (10:58):

So I had to think back when I started in the management side of home care in 2009, our Medicaid rates were around $18 an hour. And then they, in 2016, they were only at $20 an hour. So what is that little less than 10 years? They hadn’t really raised much. And then something really interesting happened in 2016. The department of justice said that South Dakota was not doing enough to keep elderly or the disabled population in their homes. They were forcing, they felt like they were forcing people into nursing homes and not giving them enough options to stay in their home. So we’ve seen a big shift in the mindset of our caseworkers in keeping people in their homes. So we’ve also seen huge rate increases to, for us to be able to do that. So from 2016 to today rates Medicaid rates have steadily increased to $32 an hour. So we’ve seen a pretty nice jump in our, in our Medicaid rates.

Miriam Allred (12:08):

That’s great to hear that that shift has happened over the last, what is that five years now? I think we’re seeing that ripple effect nationwide. Does that mean the Medicaid side of your business has picked up you’ve you’ve, I’m assuming accumulated more Medicaid clients over the last five years intentionally, or maybe just naturally that happens

Gabby Hoing (12:26):

Just naturally. I’d say our business has always been a little bit more private pay than it has Medicaid. But yeah, and, and we like it that we liked the mix the way it is the 60 40 split. So it’s a good mix of both pair sources.

Miriam Allred (12:45):

And I know you had mentioned, you know, advocacy on the state level, obviously top down, you know, I think things happen, but then there comes a time when we need to advocate for in-home care. So that changes do happen on the state level. What has been your mindset around advocacy and what have you done to help, you know, bring people more home?

Gabby Hoing (13:08):

I think in 2016, it was actually consumers that pushed the department of justice, the federal government, the state to say, Hey, we don’t want to be in nursing homes. Like we want to stay at home and like, how do we do this? And that’s when the department of justice really got involved and started analyzing how much the state spent on long-term care, Medicaid, like, so nursing home stays versus home care and found out 80% of the Medicaid spend in South Dakota was spent on nursing homes and only 20% was spent in home care. And they said, that’s just, that’s not right. We need to do better by the people South Dakota, and really help them keep them in their homes. And so that’s when we saw that, that nice rate increase. But I think in some states it’s going to take the home care leaders advocating.

Gabby Hoing (14:05):

We can’t, we got lucky in South Dakota that there was consumers that had a voice and said, Hey, this needs to change. But I think in some states it’s the home care agencies they’re going to need to get together and have a voice and say, Hey, this isn’t right. We want to be able to provide services for the Medicaid population, but at when you’re reimbursing us 18 or 20 bucks an hour, and we have to pay people 15, we’re losing money. We can’t serve that population of people. So I’d really encourage people to meet maybe other home care owners in your state, maybe start a home care association of America chapter, where you could get together and advocate together. And I think home care, associates, America even has some, it should say cloud, and they’ve been very involved politically with everything that’s going on.

Gabby Hoing (14:58):

And now’s the time for us to advocate for better Medicaid rates throughout the country, because it’s really on the radar of Washington on our president. There is, I think COVID has really heightened everyone’s awareness of home care. And so we need to build on that momentum and advocate for the race that we need to actually properly care for our caregivers. You know, if we don’t have caregivers, we can’t provide home care and people are going to be forced into settings that maybe aren’t appropriate for them or that they don’t want to be in.

Miriam Allred (15:34):

That’s amazing to hear that the consumers voice was heard, maybe the loudest in South Dakota. I think in my own experience, you know, I’ve seen that it does need to come from the providers, but you know, all the better if it’s coming from the actual consumers, but I think it takes a joint effort and you’re right home, you know, the pandemic has shown this light and, you know, Capitol hill is finally hearing, I think the combined voice, but really whatever we can do to keep that, that heard and to make sure that the dollars are allocated accordingly based off the people’s needs. So that’s, that’s great to hear yeah, I’m just kind of jotting down some notes here. The 80 20, you know, 80% of the dollars there in South Dakota were going to facilities nursing homes and only 20% going in home care. Do you know by chance what that looks like now, percentage wise,

Gabby Hoing (16:31):

I don’t, I tried to find it. I, I couldn’t find online, you know, what it’s switched to. But I, I can just feel it from the social workers we work with at the department of human services, you can, if a consumer says, or a client says we want to be in their home, they really go to bat for those people and, and get the dollars they need to keep them in their home. You know, there is a cap, you know, at some point in 24 hour care, Medicaid is really rare to see because that does get pretty spending at $32 an hour. But if they’re young you know, I’ve seen Medicaid do 24 hour care if needed, but we really, we can fill that. I could just really feel that shift in the mindset of the leadership in South Dakota and the social workers and working together with the home care agencies and their consumers to really meet the needs in the home. Well,

Miriam Allred (17:26):

Kind of put, you know, our audience here on the spot, Chris, and I know you had submitted a question actually ahead of time about raising rates to stay profitable. Do you want to elaborate on that question here?

Chris (17:38):

Well I I’m just basically just starting out, so I didn’t, I wasn’t sure as to if I should raise raise rates because I already had a set bigger coming in or if I should wait. And so this was very helpful for me to know that it’s important to go ahead and raise the rates if I want to keep my, the caregivers that I do have

Miriam Allred (18:02):

Gabby. What about when you were first starting out? What was your approach and what have you learned since then?

Gabby Hoing (18:09):

You know, I’ve always, I’ve always tried to be competitive with my rates. And you know, everyone saw, well get a competitor in the market that will just undercut everybody just to try to get done they’re new. So they will try to be the lowest. They’ll try to be competitive on being the lowest price. And I’ve always seen it burn those people. You know, unfortunately a lot of times clients don’t have a great experience with those agencies because they’re not doing what they need to, to care for their caregiving staff. They’re not paying them appropriately. They’re not, they don’t have a great company culture. And it’s always seemed to backfire. So stay competitive and with your rates. And then also it’s okay to charge a little bit more than your competition if you’re offering the best. If you’re training, what we see in South Dakota is like, people really want well-trained caregivers. And like I said, you can do that well internally and then market it, you know, market that you train these caregivers and market, what you do to get them ready to be successful in people’s homes. Because a lot of home care agencies don’t take the time, unfortunately, to properly train their caregivers. So I think you could capitalize on that, the training piece of it and that, you know, you’re going to send well equipped caregivers in the home and yeah, you might pay just a little bit more for it, but it’s worth it

Miriam Allred (19:34):

Well said. And I love what you said about just being confident. You know, if you, a lot of home care agencies can say, you know, I’m providing the best care, but if you have the, the data and the hard skills to back that up, then you can, you know, market yourself as that, you know, we are doing X, Y, and Z to train and prepare our caregivers. You know, we have this great culture, you know, use all of your differentiators as your competitive advantage and be confident in that. If you really do think you are training your caregivers, you know, better than your competition, explain why. And then use that as a selling point.

Gabby Hoing (20:10):

And we use home care pulse to survey all of our caregivers and Arbor all of our clients. And we make that known in orientation. And we make that known when we sign on clients. And then we make it known that the last two years we’ve been employer of choice, provider of choice and home care and an excellence. And we’re in the top 10% of home care agencies in the country. I think that provides a lot of confidence in us from both the employee standpoint and the client. Like we care about your satisfaction. We care that we are doing the best job that we can, and that’s why we’ve hired home care Paulson. I know I’m not probably put a plugin for you today, but I really believe in it. I believe it’s helped with instilling that confidence in our agency and that we know what we’re doing, and we’re gonna fight to do what we can to make sure our employees are satisfied and our clients are satisfied with their care.

Chris (21:04):

So yeah, I wanted to, I wanted, I did once I asked too, how, how did you go about in regards to setting up, like with the Medicaid and accessing them or speaking to them about increase in it? Because I know too that you said that for ours home cares that we sh home care owners, that we should also look into having a home care association chapter. I don’t believe that there’s one in my area. So I’m curious as to how, if there isn’t one, how would we go about setting one up?

Gabby Hoing (21:38):

You could, if you want a formal home care association, America chapter, you can just reach out to them and they will give you guidance on how to set up a chapter in your state. But you could also just start with, you know, calling other home care owners. I know that’s scary because you’re, they’re your competition and you’re new. But there everyone’s in the same boat right now. Like we need the proper reimbursement to retain our caregivers. And everyone is feeling the pinch right now. So calling other home care owners and saying, Hey, I want to advocate that we increased Medicaid rates. And I’d like to have a meeting about this. And maybe you’re the one that organizes the meeting and gets a bunch of people together and say, okay, Hey, what do we need to do to have a voice here on state level and say, our Medicaid rates are not cutting it.

Gabby Hoing (22:26):

We need more in order to care for people. And then also talk to consumers. I think every home care agency is going to need to talk to consumers as well and say, Hey, you have a voice. And I know that you want, it’s really important that you stay in your home and it’s important to us too. And the Medicaid braids are a bit low. They’re not keeping pace with inflation and what we need to pay our caregivers to retain them. And we really need your help to increase the Medicaid rates. You know, please write your legislators, please. Talk to the department of human services because their voice is probably even going to speak louder than the home care leaders in your state. You know, they’re going to take consumer’s voices pretty seriously. And if you Google like South Dakota treatment of people with disabilities, let me think of, or department of justice find South Dakota unnecessarily relying on nursing home facilities. If you Google those two things, it’ll bring up some articles on how South Dakota the findings department justice found with South Dakota, and that’ll kind of spur some ideas as well as, okay. This is the process of the Koto, went through to get their rights where they needed to be. And maybe this is the process we need to follow as well.

Miriam Allred (23:48):

We all need a Gabby us, you know, you’ve done it. It’s amazing and easier said than done a lot of

Gabby Hoing (23:55):

Our home care leaders kind of, or home care owners know ish of each other. And in 2016, it was really the consumers that push the change. Not, not a Gabby, not any like one specific person that I know of. It was consumer saying, Hey, this needs to change, but I think you can’t wait. We got lucky. We got really lucky in South Dakota that that’s what initiated the change. But I think some of these states, you can’t wait for that to happen. You can’t wait for consumers to decide. They need to have a voice. You need to help move this along. Because I know in some states, reimbursement is still around 20 bucks an hour, and there’s no way you can make that work in today’s employment, climate

Miriam Allred (24:37):

Sorry. I misspoke. I did think there was a chapter there in South Dakota, but I guess not. So it’s, it’s true. You guys were lucky to have the consumers advocating, but like I was saying, you know, it’s just a combined effort of everything that we can do. So, so Chris, we can, yeah, you can maybe connect with Gabby after we could send you some of those resources to give you kind of an idea of what can be done initially, as you’re getting started. I want to just open it up. We want to make this, so any other thoughts or questions?

Fernando (25:09):

Here in New Jersey, I’m the recruiter is the same all over the country. You know, you get a couple of caregivers to quit the jump to other agencies because they pay 50 cents more. You know, we are in that sense. So we are I think it’s not different anywhere in the country right now about that. We are blank. The real trying to improve our offering for caregivers, like including benefits. And we, we increase pay recently about 90 days ago, we increased our rates for the caregivers about 21% which put us in the 10 percentile of the highest pay agencies in the area, which have helped us in the recruiting process a lot. We, we, we are consistently hiring people and and but we get more applicants because to that come into the, you know, applying and interested in working as far as Medicaid in our state the ma the reimbursement is extremely low.

Fernando (26:18):

I think right now we don’t do Medicaid, but I believe it’s the went from 1950 to a $22 an hour. And many of the private duty [inaudible] touch Medicaid because it’s, it’s it doesn’t make sense financially for the agency. And also the main problem is the, the insurance companies are managed to Medicaid, take forever to pay you back. So there’s a financial cause when you do all the maths, if you’re making 50 cents an hour, maybe it’s too much, you know, so that’s why it doesn’t make any sense for us until they increase the rate in your state to 31, 30 $2 an hour. Then it makes sense. Also, we are, we are gearing up for for an increase for our clients. We usually, our practice has been throughout the years to, you know since we opened doors where we, you know, they sign up for a certain rate when we will, you know, we do open doors, are willing to sign up and the conditions change.

Fernando (27:29):

We can tend to keep them at the same rate forever, you know, and don’t increase them every year. But considering all the changes in the labor market, and I believe the labor inflation centers are going, gonna continue to grow. We are gonna, we are in, in, in including language, in our service agreement to, to have this I was getting up to maybe twice a year increases, you know, as far as percentage wise for our clients to, to, to pay, you know, to pay more money, because the way we can pay our caregivers, the right amount of money to attract them to work is it comes to that. You know if you don’t pay them enough, I want to work for you. So to pay them enough, you have to charge more and to come back, you know, I’ll try to get away from you know, that agency’s pain is pain.

Fernando (28:28):

I mean, it’s charging this much. Are we charging this? And we are the most, we are, we’re not cheap. We are one of the, like I said, again in the 10%, 15% of the higher charging agencies in the area, but we offer a lot of value to our clients and we give them a lot of value when they become our clients. So that comebacks, the perception as that we are expensive. So that’s how we tried to convince them, listen, you want to, do you want to go with a cheaper version? Fine. you more, most sometime I would say 75% of the time, those people that sign up with the other agency, Colombia 30 years later and say, Hey, can, can we sign up with you? You have any caregivers available. Yeah, sure. So we take them back and let them experience, you know, the dark side and I’ll come to our site and we’ll show them the difference and why you’re paying three or four more dollars for the service. That’s it? Pretty much.

Miriam Allred (29:28):

Yeah. Thanks, Fernando. It’s really interesting to hear the similarities and the contrast, you know, you’re out in New Jersey, Gabby’s in South Dakota, obviously there’s a lot of shared challenges across the board, but you know, the nuances look different state to state. And so it’s really interesting to hear, but it’s great to hear that you, you know, are looking to charge into pay in that 10th percentile and that you’re seeing an uptake in applicants. So, you know, today’s topic just kind of bringing it full circle is this is kind of the less flashy way of talking about recruitment challenges right now. I think obviously we want to talk about recognition and rewards and incentives and motivating caregivers and new ways to attract. But this is kind of a, you know, like I said, less flashy way of talking about how we can solve the issue, which is raising client rates to then be able to pay our staff more so that we can actually compete on a local level. So thanks for kind of bringing that full circle, Fernando. So I would just say in closing Gabby, you have learned so much, you know, in your years running core cares and it has been a challenging couple of years. But what would you say leaving this call? Just any piece of advice or anything that you’re looking to implement in 2022, that you would recommend providers keep their eye on?

Gabby Hoing (30:48):

I think we really just need to listen to our employees, survey them, whether it’s through home care Paul’s or Google form or whatever you need to do to survey your employees and figure out what’s important to them. So we need to listen to our employees to keep them, but we also have to be competitive with our pay, you know, when we’re recruiting new employees. So don’t be afraid to raise rates. You’re going to pique people’s interest with your pay, and you’re going to keep them with your culture. So make sure that if you do get people in the door, that you have a really good company culture, and you have really strong strategies to retain those awesome caregivers that you recruit

Miriam Allred (31:26):

So well said, peak their interest with your pay, and then keep them with your culture. If, if all else that’s, that’s, today’s takeaway, thanks Gabby for taking the time out of your busy, hectic schedule. And we hope that everyone has learned something today and can take it back to their business. And then we hope to see you again in future. Thank you.