According to Senior Housing News, nationwide efforts to increase the minimum wage and extend overtime pay may have senior living providers bracing for a labor cost surge.
If a recent White House proposal goes into effect, salaried employees making up to $50,440 could become eligible for overtime compensation. City and industry-wide minimum wage increases in Los Angeles and New York also add momentum to national initiatives.
Moore Diversified Services (MDS) conducts sensitivity studies that profile real-world assisted living communities. Moore offers actual projected expenses, as well as potential win-win outcomes.
Roy Barker, director of special projects at MDS highly recommends that communities calculate the outcomes of different wage scenarios to assess how they’ll handle various incremental increases.
Increases in rent are the typical outcome, passing the expense on to the consumer. But affordability then becomes a concern, which might ultimately harm occupancy.
Moore proposes a three-pronged solution that includes reducing overall operating expenses, enhancing revenues, and realizing organic growth through increased occupancy and expanded services within the community.
A diversified approach to solutions seems best since senior communities will need to address wage increases creatively in order to stay competitive with other industries, keep consumer costs affordable, and retain qualified staff.
Sources: Senior Housing News. Senior Living Providers Brace for Labor Cost Surge. Moore Diversified Services, Inc. Senior Living and Housing Strategy.