How Senior Living Communities Can Plan for Financial Stability in Uncertain Times
The senior living industry is continuing to face financial challenges and uncertainty as baby boomers enter retirement and cost of labor, operations, and construction continue to climb. Our experienced senior living financial professionals at KSH Consulting are here to support your organization through challenges, transitions, and periods of strategic growth by setting up procedures and creating strategies that promote long-term financial sustainability.
Here are a few key items we focus on to support this sustainability, especially in uncertain times.
Diversify Revenue Streams
Nowadays, offering multiple care levels is more than just an extra benefit, it’s becoming standard practice. It provides residents and families with the peace of mind that they won’t have to move to another community if their care needs change, and it means that your revenue isn’t tied to one specific type of care. If assisted living occupancy rates dip, you can supplement income with independent living or memory care so that it all balances out. Otherwise, if the single care level you offer is experiencing a low occupancy period, your organization will take a significant financial hit.
You can also offer programs and services that aren’t levels of in-house care, like wellness programs, home health partnerships, or extra hotel-style amenities to generate additional, flexible income without a massive up-front cost.
Invest in Technology
Whether through automations that increase operational efficiency or through emerging health and wellness technologies that lead to higher resident interest and satisfaction rates, investing in technology can help you reduce costs and increase revenue.
As with any investment, thorough research is needed to determine which technologies are right for your organization. What works for one organization won’t work for every organization, so it’s important to focus on how the specific technology will fit into your existing systems.
Maintain Competitive Staff Wages & Benefits
As labor costs continue to rise, it’s important to incentivize existing, high-performing employees to stay with your organization. While spending more on labor to save money may seem counter-intuitive, retaining employees is better in the long run both operationally and financially.
A skilled, committed, compassionate workforce is the heart of any senior living community. As the labor market becomes more competitive, maintaining desirable wages and benefits for staff will help reduce turnover – a very costly endeavor including recruitment, screening, interviewing, onboarding and training. When it comes to your top-performing staff, it’s in your best interest to keep them on board.
Establish & Curate Strategic Partnerships
The opportunities for strategic partnerships in the senior living industry are endless and can lead to long-lasting, genuine relationships that are beneficial for both parties. Consider partnering with health care providers to improve resident care and open new revenue streams or educational institutions that can provide research and resources for training.
Additionally, partnering with local businesses or community organizations can improve the resident experience and foster a strong sense of connection and belonging in the broader community, as well as potentially offering co-marketing opportunities that increase awareness and drive referrals, interest, and tours.
Adopt a Resident-Centered Approach
Of course, in senior living, no matter which sector, residents are at the center of all our efforts. Prioritizing the comfort, care, and satisfaction of your residents can help you stand out in a crowded market and position your community as the best in your area. Ultimately, the financial success of your community depends on its ability to attract and retain residents. Talk to your current residents and listen to their thoughts on the care, programming, and if any of their needs (or wants) are going unmet to see how you can work to continuously improve.
Planning for financial stability doesn't mean eliminating threats or predicting every bump in the road. If that were possible, no senior living organization would ever face challenges. It’s about building a strong organization that can withstand challenges without sacrificing resident care or operational efficiency. Financial resilience is a trait that senior living organizations should be prepared to learn and continue to focus on as the industry’s future continues to appear complex.
If your senior living organization is looking for support creating sustainable financial strategies that will offer stability for years to come, get in touch with KSH Consulting to see how our financial advisors can support you.
