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Private Duty Today
Welcome to Private Duty Today,
the bi-weekly electronic newsletter for Private Duty Home Care Leaders
from Leading Home Care ...a Tweed Jeffries company.
I'm Jason Tweed, Director of Business Development for
Leading Home Care, and Editor of Private
Duty Today.
Private Duty Today is published every
other Wednesday, and currently goes to over 7000 subscribers.
Private Duty Today is
a permission-based newsletter.
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Your single biggest overhead expense each month may
surprise you. It's not your rent. It's not the company
car. It's not your cell phone bill. It's probably not even
your health insurance premiums.
Your biggest overhead expense is the cost of someone that doesn't even
work for your company. Annually you will spend a huge amount of
money on recruitment, selection and retention of caregivers. In
fact, most of your work, most of your overhead, most of your staff's
time is not spent managing clients, acquiring customers, scheduling or
processing payroll. The most time and money intensive system you
implement is continually identifying and choosing quality caregivers,
and trying to convince them to work for you.
The best home care company in your marketplace is without a doubt the
one with the deepest pool of top-quality caregivers. The
companies with the best caregivers have to do the least management and
the least marketing. The company with the best caregivers spends
less on recruitment and retention. The company with the best
caregivers has the highest profit margin.
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There are the obvious expenses. Every month you'll
spend money on newspaper ads, radio spots, Internet directories, direct
mail and flyers designed to recruit caregivers and other staff.
Each successful applicant will have completed a pre-employment
assessment, passed a criminal background check, and made it through
your substance abuse screening.
Most of you provide introductory training and orientation, even to
those with a solid work history. This time may be paid, and the
persons conducting the orientation are certainly paid.
You may provide the caregiver with a printed employee handbook, a
uniform or scrubs, and an ID badge.
All of these things add up, but we haven't even begun to calculate the
true cost of a bad hire.
Unfortunately, most poor hiring decisions don't come to light on day
one. Wouldn't it be great if everyone that you had to fire or
that chose to quit would save us all some time and just do it on their
first day?
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The Life Cycle of a Caregiver
Most caregivers have a life cycle. In the beginning
they are enthusiastic, but inexperienced as they learn about your
company, your clients, and their duties. Even caregivers with
solid work habits and experience go through a learning curve when
working with a new company.
Productivity and, more importantly, profitability make up the middle of
a caregiver life cycle. This is the period where the individual
is doing their job, keeping their customers happy, making fewer
mistakes and contributing directly to your bottom line. They need
relatively little management and a baseline of administrative support.
The end of the life cycle is what I call the "decline".
I've experienced it as a customer and as a manager. This is a
period where something changes in the caregiver's attitude, life
situation, dedication or motivation that inhibits their work.
Sometimes it's a momentary dip, and other times it marks the
beginning of the end.
The end of this caregiver life cycle is the most expensive. It
requires the most management. It leads to periods of
inconsistency for your clients, both in quality of care as well as in
billable hours. At some point the caregiver resigns or you begin
identifying opportunities for termination.
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 I consider someone to be a "bad hire" any time
the productivity segment of the life cycle is less than one year.
My guess is that the majority of your caregivers could qualify as bad
hires. This doesn't always mean you made a mistake. Every
company and every executive hires people that make it through the
entire process and still aren't a long-term employee.
The key is simply to avoid as many of these potential bad hires as
possible.
Leigh Davis, in his newly published
e-book, identified three segments of cost that are quantifiable in
a bad hire scenario.
· Cost per hire
· Cost of orientation
· Costs of lost opportunity
Essentially this combines all the costs related to recruitment and
selection, the cost of initial training and orientation, then the costs
related to lost hours of service and profitability at the end of the
life cycle.
I also believe there are two other costs that are harder to
quantify. We know that most private duty home care companies rely
on word-of-mouth marketing. When your customers and their
families talk to others about your company it's the least expensive and
most effective advertising. Each bad hire taints a minimum of one
customer experience. Additionally, in extreme cases, a bad hire
can lead to increased liability. Even when your company isn't
legally liable, extreme cases can be a public relations nightmare.
Developing a solid system of selection, recruitment and retention is
absolutely essential for reducing the quantity of bad hires.
Improve recruitment for higher quality applicants, choose the best
among them, and then keep them forever! Your staff and your
balance sheet will thank you.
To learn more about how Leigh Davis grew his company into one of the
premier examples of quality home care, read the e-book he and Stephen
Tweed co-authored, Get the Best: Nine
Steps to Hiring Quality Caregivers and Improving Your Bottom Line and
Private Duty Home Care.
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How do
salaries, profits, and expenses compare to your competitors?
These are just some of the questions we are dedicated to
answering in our in-depth study of private duty companies. Last
week we started asking private duty owners and directors to participate
in the study, and many of you have responded. We want to thank
those of you who have taken the time to kick start our research, and
encourage the rest of you to participate. The only way we can
learn more about the non-medical home care industry on a wide scale is
to share information individually. The more unique companies that
participate, the better our ultimate understanding of critical
financial benchmarks.
Learn more about the survey process as well as the $900 incentive we
are offering home care companies to participate.
Visit the launch page at www.privatedutytoday.com/survey.
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Two Private Duty Academies
This Winter
Stephen Tweed will host the Academy for Private Duty Home
Care twice this winter. Wednesday, December 2 the Academy comes
home to Louisville, Kentucky and Friday, January 22, the Academy heads
south to the beautiful Gulf Coast beaches of South Florida.
Each Academy will connect owners and CEOs of home care companies from
across America in a powerful single day workshop. If you take
home only one great idea to implement in 2010, you'll be thankful you
attended the Academy for Private Duty Home Care.
Together we help executives grow and companies get ready for the
future!
Learn more about the Academy for Private
Duty Home Care.
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