I'm drawing inspiration this week from two conversations I had. One of the conversations was with the two gentlemen named Scott and Jeff who are starting a home care agency on the East Coast. They recently purchased our Private Duty Policies and Procedures Manual and are wrapping their arms around all the things they need to do before they hire their first caregiver and recruit their first client.

We were talking briefly about startup costs and revenue expectations for the first six months, one year and two years. They were a little disappointed that I didn't have national averages and analytical data off the top of my head.

I tried to explain to them that it's less important how much money you spend in the first six months and more important to lay the foundation for a great company going forward.

My father and I frequently use the illustration of a three-legged stool for private duty home care. The legs are sales and marketing, operations, and staffing. While they need to stay in balance, the staffing leg of the stool will be the one that limits your growth or helps you reach your maximum potential.

Staffing will be the limiting factor in growth for the foreseeable future. The fact is that the demand for non-medical home care is increasing at a faster rate than the supply of quality caregivers. The companies that win in the long term will be the companies who can recruit and retain the best quality caregivers.

It's my belief that you can be mediocre at marketing, mediocre at office efficiency and operations, and extraordinary at staffing and still become the leading agency and your marketplace.

If you're mediocre or worse at recruiting and retention, no amount of marketing or office efficiency will make your agency the community leader.

Better yet, companies who are extraordinary at recruiting and adept at retention and also have honed their skills in marketing and operations will not only become the premier agency in their community but should make so much profit that they have to deliver cash in dump trucks.

When I mentioned dump trucks to Scott and Jeff, they immediately became uneasy. It may have been because, while they desired profits, they were uncomfortable telling this to someone in a wheelchair who uses home care daily. I assured them that I love companies who are profitable! Profitable companies will be here next year. Profitable companies who deliver great products are critical to the success of our economy. And lastly, if the home care agency I use is highly profitable, and I am one of their important clients it gives me greater power and control over my own life. I love highly profitable companies.

The second conversation I had this week was with a woman I met who is a professional caregiver. I spoke to the woman at a family party.

The caregiver was a young married woman with two children. She was attractive and articulate. She approached me with charisma and comfort. At first glance, she would be an excellent candidate for the job of a certified nurse's aide at any of your agencies.

She received her CNA two years ago. She was currently "between agencies" but mentioned that she is accepting jobs for several different companies. I started asking her about her work experience, and counted five separate companies she's worked for in the past two years. Intrigued, I started asking her for very specific details about why she left each agency, and the difficulty she had finding new jobs with such a spotty work history.

She later confided in me that she had worked for no less than 12 different companies in the past 24 months. She worked for up to five of them at one time. During this period of time she never got more than 30 hours per week. She claimed that she was canceled frequently by agencies, and many of the agencies never fired her, they just simply stopped calling.

What I rapidly realized is that this woman had virtually no work ethic, no loyalty to her clients or companies, and was completely focused on the next job rather than her current job. She was a $10 per hour employee who has probably cost those companies more than $100,000 in the past two years. The time they spent recruiting and training her was minimal compared to the amount of damage she probably cost them in terms of customer relationships. She was a blight on the business of providing care in people's homes, and yet no less than 12 different human resources executives hired her.

I started to realize that there was no way she could have kept up her certification. Additionally she likely had zero work-related references. I questioned whether the HR people had even bothered to check that her certification is still valid or had called any of her references.

She told me the list of companies that she's worked for. The sad truth is that every one of the most respected organizations in our community was represented on her list, every single one.

In my community it's clear that home care companies are hiring bodies when they should be hiring people. They're fighting fires when they should be doing construction. They are failing miserably at selection.

Here's the rules, from a guy in a wheelchair whose life depends on the people who care for him. Please try to follow these rules when selecting your next caregiver.

• Dedication is more important than availability.
• Integrity is more important than charisma.
• Continuity is more important than promptness.
• Loyalty is more important than personality.
• Persistence is more important than experience.
• Quality always beats quantity!

We talk about recruitment and retention over and over and over, but recruitment is useless without selection and retention is irrelevant without quality. Focus your HR efforts on finding the absolute best caregivers you can find, then focus your management on keeping them as long as humanly possible.

This week, Leading Home Care is proud to announce our newest e-manual, The Private Duty Caregiver Selection System, by our own staffing expert Kathy Clater and our CEO, Stephen Tweed.. This new manual describes how to use our selection system to choose the most competent caregivers possible.

What can this process do for you?

• Reduce turnover rates by 10-50% in first year
• Reduce cost per hire
• Reduce workers compensation costs
• Reduce liability for negligent hiring
• Increase productivity due to better job fit
• Increase customer satisfaction
• Improve employee morale
• Increase effectiveness and efficiency of staffing process

The process includes a detailed description of new cutting edge pre-employment assessment technology, behavioral interview questions based on assessment results, and core performance indicators already benchmarked for successful caregivers in the homecare industry.

For more information on the downloadable e-manual, including a preview of the table of contents, visit our website.

The Institute for the Future of Aging Services reported on a 2004 study of the impact of turnover on long term care providers (including nursing homes, home care, and community based care facilities). They found the average cost of replacing one caregiver is $3,500. Based on a conservative estimate of 45% annual turnover, the nation-wide cost of caregiver turnover is $4.1 billion.

If you think your cost per turnover is less than that, consider the following studies that looked at turnover costs for $8 per hour workers: Society for Human Resources Management - $3,500; American Management Association - $4,000; Hay Group - $8,000.

Better yet, calculate your own actual costs. Be sure to include the costs of recruiting, selection, training, caregiver learning curve, lost opportunity costs, low caregiver morale, and decreased customer satisfaction/quality of care. Also consider what Human Resources calls “turns”, or how many times did you fill the same job?

Taking a hard look at these actual costs is not a pleasant task, but there is good news! In most cases, for less than the cost of one caregiver turnover, you can begin to turn that ship! Improved retention really does begin with proper selection.

For more information regarding our new caregiver pre- employment assessments, contact Kathy Clater (email Kathy@leadinghomecare.com) or phone (502) 339-0653.

You've heard us say that state and national home care associations are the grass roots of home care in America. We're committed to working closely with all of the associations in our industry to serve their members.

On March 12, 2007, Stephen will be in Orlando, Florida for the National Private Duty Association Annual Conference. Stephen has spoken at three of the four previous NPDA conferences.

This year, Stephen will be presenting the results of our research on selling to and working with Long Term Care Insurance companies. You won't want to miss this program if you do any work at all with clients who have LTC insurance.

Private Duty Today! is published every other Wednesday by Leading Home Care . . . a Tweed Jeffries company. We invite you to pass this newsletter along to your friends and colleagues in Private Duty Home Care by clicking on the link below.

• Publisher - Stephen Tweed, CSP
• Circulation Manager - Diane West
• Editor - Jason Tweed
• Recruiting & Selection Editor - Kathy Clater

Permission to Reproduce: Permission is granted to home care companies, home care associations, and home care related publications to reproduce articles from this newsletter as long as appropriate credit is given as follows: "Printed with permission from Private Duty Today! Copyright 2006 Leading Home Care ... To sign up for your FREE Subscription, log on to www.privatedutytoday.com."

You may also sign up for your FREE Subscription to Stephen Tweed's Leading Home Care Report. This bi-weekly electronic newsletter is written for home care company CEOs and senior executives who want to grow their businesses and multiply their performance.

email: jason@leadinghomecare.com

phone: 1-888-668-9333

web: http://www.privatedutytoday.com