Mission and margin are not incompatible, and operators that can find harmony between the two stand to attract new residents and capital opportunities.
From connecting staff to an organization’s mission that boosts retention and recruitment, to partnering with capital on new business opportunities, there’s a true return on investment within the senior housing industry by promoting a company’s overall mission according to Sunrise CEO Jack Callison.
“Mission and vision translates into tangible value in the real world,” Callison said during a session at this year’s NIC Spring Conference in San Diego.
The senior living industry faces a rising interest rate environment and persistent headwinds on labor and expenses, in addition to a sea change in labor trends and worker perceptions. Those challenges all put pressure on margins. But it’s not all doom and gloom with demand strong for the product and favorable demographics giving operators some optimism for the industry’s future.
By pursuing purpose-driven, mission-oriented goals, operators will “be on the winning side” in the face of those challenges, according to Avista Senior Living CEO Kris Woolley.
“We find ourselves here talking about why now more than ever we need to find harmony and alignment between mission and margin,” Wooley said during the NIC session.
Improving workforce and care through mission
Operators finding ways to drive mission into their workforce are already seeing beneficial results, according to Home Care Pulse President and COO Todd Austin.That can be seen in Fortune’s list of 100 Best Companies, which are being outperformed by aging services companies, he said, based on 20 million surveys conducted worldwide.
While it’s okay to have point-operated individuals and investment-oriented outcomes, operators need to understand that financial metrics and goals don’t always inspire employees to do a better job..
Callison said senior living operators have a “unique ability” to attract new talent as the industry grows. But that can’t just be through pay increases, something Callison said was a “race to the bottom if that’s your only weapon of choice.”
To promote staff buy-in, Callison said Sunrise strives to change the traditional mindset of employer-employee as a transactional relationship with more creative and flexible options.
“It has to be able to connect with your workforce,” Callison said. “Team members are part of a mission contributing to the broader good.”
Sunrise implemented a daily pay option for employees, with 41% of staff at Sunrise opted into that program.That is just one way employers are getting more flexible to meet staff needs.
Callison said Sunrise was “inverting the paradigm” of senior care and going big on hospitality integration and lifestyle programming, with lifestyle and wellness more important to the company than perhaps ever before. Callison believes that will lead to Sunrise residents leading longer, healthier and happier lives.
Purpose helps tie together intergenerational workforces, Callison added, connecting younger generations with middle-aged and older staff. Contract labor hurt operators’ ability to form culture and build cohesive teams, something that Callison called a “cancer in the business” that can destroy margin and culture faster.
While the pandemic has led to high contract labor usage and overtime costs, Callison said labor pressures were improving at Sunrise because the company “leaned on our mission and we leaned on our purpose coming out of the pandemic to draw people back into the workforce.”
Understanding a workforce and the group dynamics within a labor pool is crucial to unlocking future potential, Austin said. By having a mission-driven organization, Austin said operators would be able to dramatically improve employee turnover.
Mission as ‘a starting place’ for capital investment
Building a strong culture among employees and having a defined mission are key to fostering an environment where a senior living operator can thrive with margin growth, said A2I Partners Managing Principal Nick Gesue.
“And so having a strong, live culture, live mission is a key part of instilling that in an organization,” Gesue said. “I think that culture and mission drives behavior in any organization but especially in an organization like senior living.”
Gesue said the difference between an organization that has a strong mission and an organization that doesn’t is hard to see.But times of high stress and difficulty — like what happened as part of the Covid-19 pandemic — it becomes apparent which companies are fully-bought-in with regard to mission and which are taking a more transactional focus.
“The return back to profitability or back to normalcy will be faster and hopefully easier,” Gesue said. “Mission and strong culture is more of a differentiator in a positive way. You can feel that from the corporate office to a frontline executive director.”
Lending and investing should be operator-driven, Gesue said, meaning that capital partners should consider the strength of an organization’s culture and mission when making equity commitments.
“It’s an x-factor that is hard to quantify,” Gesue said. “But if you map enough properties, you will see a correlation between the quality of the staff and the culture.”
At Home Care Pulse, Austin said the company was able to co-align on its mission with capital partners.
“In order to get a return, we’ve got to think about the unit dynamics that exist in our workforce and the data behind it is the new currency,” Austin added.
Woolley said finding like-minded capital partners that were mission-driven could lead to better collaboration and future opportunities for growth, rather than fighting with a misaligned capital partner.
Gesue said that the “smartest capital providers” were those most attuned to quality of care, strength of mission and culture.
“The smartest capital knows how to assess not just the quantitative elements of what [operator] do, but the qualitative elements of how you do it,” Gesue said. “I think how you attract and find capital partners comes down to mission.”
Articulating an operator’s mission, vision and principles helps better align capital partners with operators for success in the future, Callison said.
“We’re not trying to be everything to everyone and we put our money where our mouth is,” Callison added.
The post Mission Not Impossible: How Sunrise Senior Living, Other Companies Balance Mission and Margins appeared first on Senior Housing News.
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