Franchise owners deal with many factors that affect profits and abilities to grow market share in today’s business environment, including changing economic forecasts and issues related to overtime pay and minimum wage rates.
One significant factor that hinders the long-term growth of a franchise is employee retention and
turnover. Recent statistics indicate that full-time employees receive, on average, a 10 percent pay increase when they change jobs. Retaining employees is crucial for businesses.
The costs of replacing employees continue to increase in accordance with these trends. The Society of Human Resource Management reports the cost of replacing, hiring and training a full-time employee is equivalent to six to nine months of an employee’s salary. These costs — and shortages of available workers — are an increasingly serious issue for those in the health care industry.
Health care worker retention
The turnover rate for employees in health care is one of the highest across all industries, leading to crisis-level demand for workers. About 70 percent of home health care administrators identified shortages in available caregivers as one of the biggest threats to growth of their businesses, according to a 2016 study by Home Care Pulse.
The state of home health care
FirstLight Home Care offers innovative programs to retain caregivers. An average of 10,000 people each day turn 65 years of age; the number of Americans 65 or older will increase to 18 percent of the United States population by 2030. The demand for employees to care for this population will grow exponentially.
While the home health industry is one of the strongest employment sectors in the country (expected 2010-2020 according to the Department of Labor), turnover rates in the home care industry are often cited between 50-70 percent and higher.
Improving retention rates
Caring for others requires dedication and commitment. Reductions in staff turnover occur when businesses invest in their employees. Training programs, higher compensation and flexible scheduling reduce churn and allows retention of the best employees.
Investments in employee-retention programs save money in the long run by removing costs associated with recruitment, hiring and training. Other ways include:
- Hiring employees instead of using contractors
Many home health care companies fill a need for caregivers by using 1099 contract workers. We have found that these workers often feel they are not a part of a team. Hiring them as employees cultivates a feeling of teamwork within the company.
- Health benefits for employees
Compensation for home health care workers is often at the lower end of the pay scale. Providing health benefits for employees, many of whom are often motivated by a desire to help others, can add value and assist retention programs.
- Offer a living wage, not a minimum wage
The debate on minimum wage vs. living wage should be monitored by franchise owners. Offering living wages, instead of just minimum wage, helps franchisors retain top talent. A bonus program based upon your success also will drive more talent to your team.
- Internal recruiting
Highlighting the work of your most exceptional employees is an important step to retain employees and promote loyalty. The opportunity to apply for, and be rewarded with, higher positions within the company is used as an indication of the value placed on our franchise employees.
- Continuing education and training opportunities
Employees that are given the opportunity to grow and deploy their skill sets are often the most loyal members of your team. Training your employees and updating their knowledge will add value to your business. Additional training will help employees manage new responsibilities within your organization. They will also be able to meet more complex work requirements, adding additional value to your company.
- Flexibility for employees
Home health care workers often provide care for their own family members, as well as clients. A lack of schedule flexibility is often cited as a reason why home health care employees leave positions. Offering flexibility for employees to meet their personal obligations builds loyalty to your business.
- Work-life balance
A career as a caregiver can be extremely difficult. Workers in the industry are often susceptible to physical and emotional burnout, which is why it’s important to help your employees manage their work-life balance. Allow your caregivers time away from work to tend to their own emotional and physical needs. Provide counseling services to manage emotional stress and encourage them to take time off. This will help foster trust with your employees, and encourage a sense of belonging.
- Plan their career paths
Workers often change companies when they encounter barriers to their professional growth. Help your employees plan and define paths to career goals within your business. These goals can be finance-focused, or management-based, and should be designed to plan a future with your company.
The results of the initiatives put in place for our franchise locations have been exceptional. Last year FirstLight Home Care had an average turnover rate of 15 percent for our caregivers — one of the lowest rates in the home health care industry.
While your own industry may not face the same turnover rates as the home health care industry, finding ways to make your employees feel valued, important and a part of your team can offer outstanding results for your franchise — and your bottom line.
Bill McPherson is the executive director of franchise development at FirstLight Home Care, which has been awarded Forbes Top Franchises; Top 500 franchise by Entrepreneur; and Top Franchisee Satisfaction and Top Veterans Franchise by Franchise Business Review. Contact him at email@example.com to learn more about the senior care sector.