Conquering the Crisis: Money Matters More in Recruiting than Retention

Stephen Tweed | January 23, 2020 | Research & Trends, Strategic Business Coaching
By Stephen Tweed You know that the biggest barrier to growing your home care business is the caregiver recruiting and retention crisis. If you could get more caregivers, you could get more clients. So what are you doing differently in 2020 to conquer the crisis and find more caregivers.  Caregiver turnover is through the roof…

By Stephen Tweed

You know that the biggest barrier to growing your home care business is the caregiver recruiting and retention crisis. If you could get more caregivers, you could get more clients.

So what are you doing differently in 2020 to conquer the crisis and find more caregivers.  Caregiver turnover is through the roof – 82% in 2018.  We have learned that 80% of caregiver turnover happens within the first 90 days.  If all of your recruiting effort is going to replace the caregivers who have left you, you won’t be able to grow.

Conquering the Crisis involves two points of focus; recruiting more and better caregivers, and retaining them longer than 90 days.

Last week, I wrote to you about attracting higher quality applicants by writing better job ads.  We gave you a formula for writing more effective ads.  This week, I want to give you more insights on how to attract more applicants.

Money Doesn’t Motivate Caregivers to Stay

One of the questions we regularly get is, “How much does money matter in caregiver recruiting and retention?

Well, in our 2016 Best Caregiver Study, we learned that the best caregivers in top tier home care companies stay with their current company because:

  1. I’m doing important work – 81.97%
  2. I feel valued by my clients – 62.3%
  3. I have a flexible work schedule – 45.9%
  4. I feel valued by my supervisor – 38.52%
  5. I feel valued by our company owner – 22.13%
  6. Education and training provided – 11.48%
  7. I feel fairly paid – 4.92%

Only five percent of best caregivers stay with their current company because they feel like they are fairly paid.

Money Matters More in Recruiting

On the other hand, we have learned that on the recruiting side, money and money related benefits do matter more.  In one of our mastermind meeting discussions, the members were talking about recruiting methods and what works. One member told us later that a light bulb went on in his head during that meeting. He went back home and revised his job ads. He put more emphasis on pay rates, total annual income, benefits like health insurance and 401k plans, and most importantly “paid vacation.”  We have heard frequently over the years that caregivers want “paid vacation.”

Our member came back to the next meeting and reported that his number of job applicants went up over 400% when his ads mentioned money and money related benefits.  As you can imagine, there were many applicants who saw the money and applied. There were people he would never consider hiring, so he needed to pay special attention to the screening and selection process and make sure his team were hiring only the highest quality applicants.  He reported that he was able to hire  more caregivers, and was able to grow his business.

Since this is only one anecdotal example, we needed to test out this theory.  We discussed the example in the mastermind group and encouraged others to test out this idea. We also developed some new recruiting ads for some clients and helped them test those ads. Again, we saw an increase in the number of applicants.

Money Matters in your Employee Referral Program

Other research we have done shows that the most powerful recruiting tool you have is your own Employee Referral Program … encouraging your own employees to refer their friends and relatives for caregiver positions.  There are three key ingredients to making your ERP work:

  1. Promote your program regularly, and find unique ways to catch the attention of your people
  2. Pay a worthwhile incentive to reward your employees for making a referral
  3. Make it easy for the referred person to apply and be hired.

The 2016 Best Caregiver Study shed some light on this.

  • 16.67% of Best Caregivers said they were referred by another employee
  • 81.82% of Best Caregivers said they would invite their best friend to work here
  • 67.96% of Best Caregivers said they would be more likely to refer a friend if they were given a bonus payment
  • 46.74% of Best Caregivers said $100 would motivate them to refer a friend

If you have not created and implemented an effective Employee Referral Program, you are missing a wonderful opportunity

What do you think?

Does this principle make sense to you?  How can you test this out in your own company?  We’d love to hear from you as you test out new and different ideas attract more high quality caregiver applicants.

We’ll also be testing out how money affects retention, and how the other factors listed above impact caregivers staying with your company.  We’ll continue to study tools and techniques to improve on 90 day caregiver retention.  Stay tuned for more on that.

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Stephen Tweed
Stephen Tweed, CSP, began his journey as a business strategist in home health care in 1982. Today, Stephen is among the top thought leaders in Home Care strategy and management. He has worked with top 5% companies from across the US. He is a sought after speaker at from national and state association events.

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