In September, Commonwealth Senior Living recorded its sixth straight month of relatively steady occupancy growth. That trend continued into October, culminating in a new monthly record for move-ins.
All told, the Charlottesville, Virginia-based provider has added about 5.5% of occupancy since its pandemic lows earlier this year in March. With occupancy recovery at hand, CEO Earl Parker believes the next big hurdle ahead is staffing, so that the provider can deliver on its promises to new and existing residents.
“Our biggest challenge is building the workforce,” Parker told Senior Housing News. “We can’t just be recruiting people that are already in the workforce — there’s not enough of them — so, we have to find people and bring them into the industry.”
To that end, the operator has made several moves to try and attract new workers. Commonwealth’s two-pronged approach to staffing is to target colleges and technical schools as well as other industries for workers looking to join the industry. Commonwealth has also hired two new leaders to help manage hiring, something that other providers are also doing, as well.
Looking ahead, Parker sees many signs that the company can maintain its momentum, and he is optimistic about looming demographic trends. Supply trends are also favorable in Commonwealth’s markets. Indeed, NIC Chief Economist Beth Mace believes the industry is in the midst of a “window of limited inventory growth” that senior housing leaders should take note of.
Commonwealth currently has a portfolio of 34 communities and the company is looking for selective growth opportunities, with Toronto-based real estate investment company Invesque (TSX: IVQ.U) behind it.
Staffing is the lynchpin
In the fall of 2020, Parker was nervous about what the coming months would bring. Fast forward to now, and he is feeling much more optimistic about the company’s immediate future. That view is bolstered by the fact that Commonwealth has seen such positive growth in move-ins and occupancy.
“We continue to feel like we’re going to have positive momentum,” Parker said.
Now, Parker and Commonwealth have turned their greater focus to staffing, a longstanding industry issue that intensified sharply during the Covid-19 pandemic.
One problem for some operators now is that, while demand for their services and communities is robust, finding workers to provide those services and staff those communities is harder than at any time in recent memory.
“The [occupancy and supply] numbers are going to balance out, but we’ve got to have the staff to be able to deliver on our promises,” Parker said.
Commonwealth has also had to be cognizant of staffing shortages when planning for new technology. When exploring new tech, the company weighs options that can help improve its operations without adding more tasks or hours to workers’ days.
To help overcome staffing challenges, Commonwealth hired a director of career outreach to work with technical schools and colleges in August, a new endeavor for the operator.
“We have to be focusing on getting those people who are coming out of school and young people who don’t really know about senior housing,” Parker said. “Hopefully, we get them versus having them go to Target or Starbucks.”
The company also in September added a talent acquisition specialist to help drive recruitment from outside the senior living industry. Commonwealth’s in-house recruitment program is called “Hire for Heart,” and it’s aimed at identifying people in other industries who might have a passion for senior living, recruiting them and then paying them to get trained for a new position.
The operator also employs some unique practices to help drive retention among workers. For instance, the company has a practice of buying gas for workers at communities that achieve certain licensing milestones. The practice of buying gas for employees started about 15 years ago with the company’s founder and former CEO, Richard Brewer, and Parker said he has carried it over into his tenure as the company’s leader.
Commonwealth also gave away two brand-new cars and doled out about $100,000 to employees since the start of the pandemic, and the company also offered sign-on and retention bonuses in some situations.
Putting the pieces together, Parker believes that these and other initiatives can help the company grow without relying on workers who circulate from one provider to another.
“I think we can have an impact not only at department head levels, but at frontline levels by bringing in folks out of culinary programs, maintenance programs, caregiver programs, and then providing a career path for them,” Parker said.
Regional aspirations
As the name implies, Commonwealth has its roots in Virginia, one of the four “commonwealth” states in the U.S. along with Kentucky, Massachusetts and Pennsylvania.
Though most of the company’s communities are located in Virginia, Commonwealth also has communities in Pennsylvania, Tennessee and Maryland. And looking ahead, Parker said he believes the operator is best suited as a strong regional player.
“We believe in regional focus,” he said. “You stay closer to the business and you know the people.”
Commonwealth is just one mid-sized regional senior living provider on the rise right now. Some companies are gaining so much scale in one region that they have ascended to “super-regional’ status.
While Parker has no particular number in mind for growth, he does believe that there will be opportunities to scale up in the coming months and years. But he is also mindful that too much growth at once can be prohibitive. For example, he said he was aware of a mid-size senior living provider who had plans to more than triple the size of their portfolio in just a month.
“I worry some of them might be a little too rapid [with growth],” Parker said.
Parker and Commonwealth know a thing or two about rapid growth, too. The company went from 22 communities to 32 communities during its $340 million Invesque acquisition in 2019. Commonwealth had the infrastructure to handle such rapid growth — and Parker cautions any provider looking to grow in a similar way to examine their own operations for scalability.
“There are a bunch of those [deals] happening out there,” Parker said. “I’m not being critical — you have to strike when the iron is hot, and if there’s an opportunity, then you have to ramp up and say, ‘All right, how do we scale our structure to be able to be ready for this?’”
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