It is hard to look at the news or read a business-oriented magazine these days without seeing the word bailout…usually screaming in large, bold type.  While today’s bailout discussions involving the financial services markets are current events, the article below describes a potentially even more massive bailout of Medicare in the not-too-distant future. 

http://www.dallasnews.com/sharedcontent/dws/dn/opinion/columnists/wmckenzie/stories/DN-mckenzie_07edi.State.Edition1.b82bce.html

Though the scale is enormous, at least this bailout is far enough in front of us to plan for an orderly workout of the situation.  Here’s hoping there is enough political fortitude in Washington DC to make this happen in a manageable way, since the ramifications are wide reaching.

Here is an interesting analogy that is used to illustrate the main reason why government-funded healthcare expenses rise so high and so fast:

http://www.detnews.com/apps/pbcs.dll/article?AID=/20080617/OPINION01/806170311/1008

Now imagine if the industry in which you work were primarily funded by a source that, it can be modeled with accuracy, is scheduled to run dry.  Where would that leave you as a service provider?

Recruiting is already enough like three dimensional chess that it sometimes makes it a challenge to set aside the time to absorb industry information such as this.   However, it behooves us to pay attention to the macro picture since the results of whatever changes Medicare goes through will substantially affect the entire healthcare industry.  Indeed, those changes will likely affect ALL industries since the painful and inexorable rise in the costs of medical coverage affect every employer to one degree or another.

I read a news story today that caught me off-guard.  It concerned the impact of the soft residential real estate market on the senior care industry.  The story profiled several Florida-based operators of life-care communities, commonly known as Continuing Care Retirement Communities or CCRCs.  These communities provide a range of care that runs from activities for active seniors to assisted living and skilled nursing for those who need it.  The cost to join one of these communities is steep; the article quoted buy-ins ranging from $75,000 to $500,000 which typically involves the sale of the resident’s home.  However, in this soft market homes aren’t selling according to a predictable schedule which has led, at best, to some pretty creative marketing techniques (accepting what amount to IOUs for the home sale that have due dates as far as six months out) at some facilities to, at worst, vacancy rates as high as 20% at many CCRCs that are accustomed to vacancy rates of 0-3%.  Anytime revenues slow due to declining occupancy, staffing cuts typically follow, though the same challenges can open opportunities for truly creative marketing and sales people.  This will be an interesting phenomenon to track from a recruiter’s perspective.

Sometimes the simple rules are the best.  For example:

Do Unto Others As You Would Have Them Do Unto You.

I was thinking about the Golden Rule this morning as I reflected on the dynamics of our market right now.  For some of our job categories there are way more candidates than there are opportunities, which results in a surplus of candidates…anxious candidates at that. 

At first glance it might seem too time consuming and inefficient to get back to each individual candidate and apprise them of the status of the search.  The dealmaker inside us says that is not how we make our money and the time manager says that there are more productive things we can be doing with our time.

I disagree.

We are so fortunate to have so much enabling technology at our fingertips that there is really no excuse, in my view, for not keeping candidates in the loop as a search progresses.  When I started in the search business personal computers didn’t exist; mag-card typewriters were state of the art, the only ATS we had was legal pads and the only computing power at our disposal was service bureau services not far removed from the punch card days.  Today, however, it is so simple to create an engaging email template and advise people of their status, and recruiting professionals who ignore this simple fact do so at their own peril.  After all, treating candidates professionally and respectfully is a key factor in how reputations are built, which should be especially valuable to anyone who has been around a while and has seen candidates evolve into clients.

So remember, if during the course of your searches you are treating others the way you’d like to be treated then you are on the right path.

The headlines are all around us:  inflation is rising at the highest rate in 17 years, the stock market is losing value on inflation fears, consumers are spending less causing the economy to slow down, deep trouble in the real estate finance markets is placing a drag on broader financial markets.  What does that have to do with healthcare recruiting?

Right now we are seeing among our clients in Southern California the lowest number of active searches in more than two years.  Our market started to slow down in November last year and it has not picked up as I thought it would after the first of the year.  And it is not just our local clients; the California Association of Healthcare Facilities job posting board has an uncharacteristically low number of job postings, and many of those are either for out-of-state positions or else for government jobs.

Why is this occurring?  I believe that candidates are hunkering down in their current jobs and are nowhere near as interested in considering making a change.  They seem more willing to accept the status quo as opposed to exposing themselves to any risk.  And when people don’t move there is no need to fill in behind them.  A slow economy is a good thing for senior care operators since it allows them to manage a more stable internal labor pool that is less subject to turnover, but it is not as good for senior care recruiters.

What can we do?  Well, it is more important than ever that we as recruiters do an exemplary job of explaining our clients’ unique value propositions and truly understand what a candidate seeks in order to provide and display value.  Clients, too, will need to make sure that they are as competitive as they need to be to attract talent for key positions.  Plus, we have to make sure that we do not have all our eggs in one basket.  If there are other regions of the country that are active than where we’ve focused our efforts then we need to be working there.  If there are other market segments that hold promise we need to be there as well. 

I believe we are seeing a shift in the market that may last for a while, and it will require of us a higher level of skill and professionalism.  We will need to be more diverse in an interdisciplinary way and more effective at our jobs, since in this market there are no easy searches.

Every so often a study comes along and validates what you already believe to be true.  That just happened to me with a study recently published in the 2007 Seniors Housing & Care Journal, and the results seem absolutely congruent with anecdotal evidence of the same phenomena.

The study says that turnover will remain high (40%) for Nursing Home Administrators (NHAs) nationwide.  More troubling, though, is the observation that an alarmingly high number of NHAs, three in four, are considering leaving the industry.  The chief culprit in this implied lack of job satisfaction is the ever-increasing burden of legal and regulatory pressures as well as corporate pressures for those who work for large chains.  NHAs see their responsibilities and stresses expanding at a rate that tends to overwhelm their “calling” to their profession and they are upset that their time with residents and families is becoming increasingly limited.

Just today I spoke with a NHA who shared an alarming observation with me.  She graduated from college about 11 years ago and of the 50 or so members of her class who focused on healthcare administration, about 30-35 went into long term care or assisted living.  Of that smaller group, only a handful is still in the industry!  She observed that regulatory pressures were a key ingredient with decreasing job satisfaction for those who left the industry.

What does that mean to us?  For one thing it means that the structural imbalance between demand for talent and supply of talent may be more extreme than ever over the next several years.  It probably also means that our job will become more difficult as we will have fewer candidates for a market that will continue to grow based on demographic realities.  Our clients can count on our help, though, to make sure that they have the talent they need to provide a consistently high level of care.

Welcome to Senior Care Notes, an informal blog that will pay special attention to recruiting issues and trends affecting the senior care market.  Since my mother is from North Carolina and drilled the importance of polite behavior into me from an early age, please allow me to introduce myself in a way that will give you some perspective on my observations about the industry and the evolving role of recruiting in moving the industry forward. 

My name is Richard Detoy and I have been a recruiter and management consultant since 1980.  On the corporate side of the desk I have worked for Fortune 500 employers in both division- and corporate-level executive staffing roles for roughly a dozen years.  I have spent a similar amount of time as an outside recruiter in firms ranging in scale from a large, international retained firm to my own solo practice.  The balance of my career has been spent as a management consultant, primarily involved in organization analysis and design.

I entered the senior care market in 1993, which means I have seen a number of industry cycles ranging from Medicare reimbursement rate change shake-ups in long term care to speculative real estate developers over-building retirement facilities resulting in wild swings in supply and demand in that segment of the senior care continuum.

On a more personal level, witnessing first hand the important difference quality skilled nursing care made in the final days of my father’s life caused me to rededicate myself to senior care markets.  While I have neither the temperament nor the training to be a care giver, my daily goal is to staff my clients with the most talented professionals available.

Our firm, Executive Search Solutions, is tightly niched in the senior care markets which include independent living, assisted living, skilled nursing, home health and hospice.  Our clients own and operate facilities throughout the country and this allows us to pick up on emerging trends.  In upcoming blog entries you can expect to hear about those trends and also read commentary on broader issues related to recruiting.  I sincerely hope that my observations will stimulate thought and inspire you to provide feedback and valuable input.  In that way everyone can benefit!