Compensation has long been a barrier to recruiting and retaining clinical staff to post-acute organizations. Low reimbursement rates, driven by Medicare Advantage and Medicaid, in addition to an increasingly financially unfavorable payer mix, make for razor-thin profit margins. Those profit margins in turn have made it difficult for employers to increase their labor costs, resulting in staff compensation often not being competitive with other settings.

But today’s intense competition has finally made compensation increases possible. Since March 2020 providers have been pushed to increase baseline compensation, in addition to offering retention and sign-on bonuses, to stem the exodus of clinical staff.

These increases were particularly noticeable at SNFs and assisted living facilities, which raised total compensation for all employees at a much faster pace (6%) across 2021 than the health care sector more broadly (4.6%).

Leaders of post-acute organizations focused this rise in employee compensation primarily on unlicensed staff, including CNAs and home health aides, for two reasons:

• While wages did keep pace with inflation, average hourly wages for both nursing homes and home health organizations are far below the U.S. national average of $31.56 in January 2020. This highly motivates staff to leave roles for relatively small increases in base compensation, creating a compensation arms race between employers that accelerates staff turnover.
• Both SNFs and home health agencies employ primarily aide-level staff who may not be required to hold licenses, who can switch between industries with relative ease (and without feeling the opportunity cost of not using education they invested significant time and money to get). Because many post-acute sites operate on tighter margins than both other care settings and out-of-industry competitors, they are at a disadvantage to match competing offers.

Despite the rapid growth in base compensation over the past two years, many post-acute leaders believe that these increases are reaching a ceiling given current reimbursement rates.

Opportunities for post-acute employers to address workforce challenges

Historical challenge

Pay all employees a competitive market rate …

Prior to the pandemic, the labor market was employer-centric enough for post-acute organizations to mostly sustain staffing levels even with deflated base compensation. Though staff turnover was high, employers were able to recruit and train enough individuals to keep beds open.

Today, paying market rate (and ideally a living wage) is nonnegotiable. Any post-acute organization that isn’t matching market rates for this labor pool risks losing their workforce entirely.

Emerging challenge

... while defining the post-acute employee value proposition beyond competitive compensation

But even a market-competitive wage won’t be sufficient to retain staff in the long term, especially in a tight labor market. Nor can post-acute employers outcompete Amazon, Target, Starbucks, and other out-of-industry employers with large profit margins.

To retain staff in the long term, post-acute providers should communicate and reinforce the unique (or at least differentiated) qualities that their top talent values in a work environment, including a connection to mission, team environment, and flexible scheduling.

It’s hard to overstate the toll that the Covid-19 pandemic had on health care workers, particularly those in post-acute care. Infection control measures, such as halting visitation in facilities and time spent donning and doffing PPE, increased the already high workload of clinicians. Many in post-acute settings cared for patient populations most vulnerable to severe complications from Covid. Staff in post-acute settings who were not accustomed to significant infection control measures often didn’t have adequate PPE on site. In addition, many patients and residents of post-acute facilities have cognitive challenges and are difficult to keep masked or separated, leading to moral distress among staff who felt unable to protect their charges. And nursing home employees died from Covid at nearly twice the rate as hospital employees.

Recent data indicates that over 50% of nursing home and home health workers are burned out, especially those who worked directly with Covid patients and had patients die of Covid.

With Covid-19 rates down significantly from their 2020 peaks, employers may expect that the worst of clinician burnout is behind them—and what remains will decrease as staffing levels stabilize.

But rising burnout will stay the rule for the post-acute workforce, not the exception. The work of clinical care delivery itself is becoming more challenging. The pandemic greatly exacerbated a trend that began well before 2019: patients in post-acute care are becoming more complex, while staffing models stay the same.

Unless employers intervene, this rising complexity will fall squarely on the shoulders of clinicians struggling to heal from the pandemic—threatening both workforce integrity and patient outcomes.

Opportunities for post-acute employers to address workforce challenges

Historical challenge

Redesign the care team to reduce clinician burnout …

Rather than attempting to recruit additional clinicians in short supply, leaders should consider re-scoping their existing team to ensure clinicians are practicing at top-of-license—while adding additional roles only as necessary.

For example, LPNs at Country Meadows Retirement Communities in Pennsylvania were overburdened with medication distribution and administrative tasks while their increasingly complex patient population required additional time and attention. To allow LPNs to practice at the top of their licenses, Country Meadows added new staff roles dedicated to medication management and documentation. With a reduced medication and administrative burden, LPNs spend more time on tasks such as rounding, checking for symptom exacerbation, and receiving additional education.

Emerging challenge

… while embedding emotional supports to heal pandemic trauma

Health care organizations have long provided emotional support resources for staff, such as employee assistance programs (EAPs) or debriefs following major emotional events. But staff often don’t use these emotional supports, instead relying on individual coping mechanisms so they can prioritize patient needs over their own well-being.

To move beyond this long-standing “I’m fine” culture, organizations need to provide a baseline level of emotional support resources. At a minimum, organizations need to provide at least one formal resource for each of the following:

• Major events that could lead to emotional distress, trauma, grief, or PTSD
• Moral distress
• Routine stress related to frontline care that can contribute to compassion fatigue

For strategies to build baseline emotional support with staff, access our report.

Providing frontline career development is uniquely challenging for post-acute employers relative to other care settings. High turnover disincentivizes employers from investing in staff training and skill development. And even if employers were to do so, it isn’t always clear what the frontline staff would want them to provide. For example, many staff see CNA and aide roles as a low-barrier opportunity to start their careers, but may not be interested in working as a clinician permanently. Others drawn particularly to health care’s mission may be enticed by pathways to licensed roles.

As a result, post-acute care organizations often fail to reward clinicians for additional skills and responsibilities—or motivate employees to grow their careers within the organization.

Maintaining this status quo is a key missed opportunity for employers, for two reasons. First, development provides motivation for staff to acquire the skills necessary to care for the highly complex post-acute population. Second, the promise of future reward can give post-acute employers a much-needed edge over out-of-industry employers wooing staff with compensation bumps.

Opportunities for post-acute employers to address workforce challenges

Historical challenge

Create career development opportunities within roles …

To provide career development within roles, employers will need to stratify role responsibilities and rewards (e.g., offer tiers of CNA roles). Ideally, this can support top-of-license practice in addition to engaging employees.

There are two approaches to creating intra-role development. Employers can either stratify roles by skill level and experience, or create a variety of career paths that align with needed areas of specialization (e.g., CNAs trained in caring for patients with behavioral health needs).

Emerging challenge

... while creating an interprofessional career ladder

Out-of-industry employers like Amazon are focusing on tuition reimbursement as an in-demand benefit in a competitive labor market. Yet career pathing has always been one of health care employers’ greatest opportunities. Most settings of care employ a variety of clinical roles with concrete educational pathways to advance to each one.

But empowering employees interested in these pathways to achieve them will require a more intentional effort by employers. Educational programs may be incompatible with typical shift options or they may be too costly for employees to afford. By strengthening collaboration with local colleges and offering tuition reimbursement benefits, post-acute employers can recruit and retain existing staff in addition to building a future pipeline of quality candidates.