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6 Strategies For Reducing Labor Costs In Senior Care

reducing labor costs in senior care

Providing high quality care is long-term care and senior living organizations' number one priority. But providers must also be mindful of their bottom line. So, how can they achieve both? By taking a strategic approach to staffing.

With the right scheduling practices, senior care providers can meet staffing requirements while eliminating excess labor costs caused by unnecessary overtime, clock-riding and more. Here are six actionable steps for achieving the perfect harmony between cost and care.

1. Set Realistic Overtime Goals

Reducing labor costs in senior care by even 1% leads to significant savings since overtime can easily account for 6+% of labor costs.  To do this, you must set achievable overtime targets and manage to them daily. What’s an achievable overtime goal? Take a moment to compare your staffing requirements against the employee utilization of full-time, part-time and per diem employees to determine a reasonable target.


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2. Be Proactive, Not Reactive

The only chance you have in reducing unnecessary overtime is to look at projected data, not just historical reports. When managing the schedule, analyze employee scheduled hours with worked hours to identify overtime risks. Having this insight helps schedulers make more cost-effective decisions when assigning shifts.

3. Eliminate Overtime From The Master Schedule

Having overtime built into the schedule puts you at an immediate disadvantage. Schedulers must remove overtime from the schedule before posting to staff. If open shifts remain, schedulers should first recruit non-overtime employees to fill those shifts or better yet, provide a method for those employees to request them.

4. Create A Cost-Effective Call-Off Management Process

Even the perfect schedule can be quickly derailed by employee call-offs. Call-offs put schedulers in a tough position, often leading them to rely on employees known to pick up extra shifts. The problem? Overtime implications are often not considered. And in the event an internal employee is not available, organizations find themselves relying more and more on costly agency staff.

To combat this, implement a process where open shifts are communicated equally to all qualified and available staff. Prioritize assignments based on an employee’s risk for incurring overtime.

5. Stop Clock-Riding Before It Goes To Payroll

The excess costs that result from an employee punching in early, punching out late, or in some cases, both, can really add up. Having a real-time view of punch data can help you address clock-riding before it goes to payroll, saving significant costs.

6. Eliminate Overstaffing

Consistently staffing to resident needs, without overstaffing, can drive significant savings. For example, a 100-bed community that overstaffs by .1 hours per patient day can save $75,600/year with tighter staffing level alignment. This is another reason proactive labor budget management is critical to an organization’s success.

“I can get a real-time view of where we are when it comes to hours and overtime. This is our biggest cost in the company and seeing it in real -time allows us to intervene before it becomes a problem.”

–Scott Unverferth Director of Operations HCF Management, Inc.

The Staffing Advantage: Strategies To Reduce Labor Costs dives even deeper into staffing hacks that reduce labor costs like strategies for managing clock riding and eliminating agency usage.

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