The senior living industry is thriving thanks to its popular consumer-driven model serving the needs of the nation’s growing population of older adults. But like all industries, senior living providers face pressure in certain areas of business operations subject to dynamic economic drivers rippling throughout the nation. One of those economic considerations is the cost associated with labor.
Labor is a complex issue, one that requires considerable attention in the effort to manage operational costs. Many factors can affect how a company or community handles the “people” cost; after all, people are the very heart of the senior living industry.
As workforce development and labor management issues are significant focus areas for Argentum, we have developed a white paper that analyzes the trends and forecasts of key U.S. economic indicators with a focus on the senior living workforce. The analysis highlights national, regional, and state data related to assisted living and continuing care retirement communities based primarily on sources from U.S. federal government agencies.
Some key highlights include:
- The American economy is still climbing out of the Great Recession, but economic growth has been positive in recent years. The nation has been experiencing steady employment growth and a declining jobless rate. Most of the fastest-growing states were located in either the western or southeastern United States.
- Positive factors outweigh the risks in 2018, and the economy is projected to expand at a moderate pace in 2018 with job growth remaining steady at 1.5 percent, due primarily to a tighter labor market for employees.
- Although the relative growth rates will vary, the economy in each of the U.S. regions is projected to expand in the year ahead. Greater differences are expected in demographic changes, as some regions are expected to experience little or no population growth in 2018.
- Higher-income households make up a larger share of total households than they ever have before. There were 50.5 million households with an annual income above $75,000 in 2016—the highest level on record.
- Although the national economy is projected to add more than 2 million jobs in 2017, the overall rate of growth is on pace to be the slowest in six years partly due to the difficulty that many businesses are having finding qualified employees. Although older adults still represent a relatively small proportion of the senior living industry workforce, this demographic likely will offer the greatest opportunity for labor pool growth in the years ahead.
- The senior living industry has been one of the strongest job creators in the U.S. economy for many years but its 18-year streak of outpacing the economy appears to be in jeopardy as job growth slows. Employers are making up for it by increasing the number of hours worked by their employees, with growth in employee hours strongest at assisted living communities.
- The senior living industry will continue to face stiff competition for foodservice and hospitality employees, as those industries will remain among the fastest growing in the economy in 2018. Senior living communities are expected to see higher labor costs in 2018, as competition for employees is expected to become more intense.