What’s up everybody. It’s Steve, “The Hurricane”. And on today’s episode, of A Drink With The Hurricane, we’re going to talk about how to get more caregivers. So, raise your glass and let’s toast to your success. Cheers.
So folks, I know that the biggest concern and challenge that you’re facing in running your home care business is caregiver recruitment and retention. It is no secret. This is what we get calls all the day, all the time about every single day. It’s the reason why I developed a program called Momentum, your recruitment and retention solution. It’s literally a six week certification for your recruiter. And I recruit and train. I’m sorry. I train 100s of recruiters every single year on improving this because it’s the biggest challenge that we’re all facing.
Straight from the Home Care Pulse report. There is nothing that will improve your ability to recruit a caregiver more than giving them more money. It is as simple as that. Look at this graphic from the Home Care Pulse report I’m going to show you. See this. Over here, the first one represents the people who are paying in the bottom 25% of the industry average an 80% turnover ratio for their caregivers. What does that mean? That means if they hire 100 caregivers, 80 of them will quit and leave that organization before the year is out. This is a terrible figure.
On the flip side, this purple graph over here represents people who are in the top 25% of what they pay caregivers. And while the number 57% is not anything to, you know, write home about, it is significantly better than 80% turnover. That same agency, just by pay alone, being in the top 25% has a 57% turnover ratio. Which means they hire the same 100 caregivers, 57 leave before the end of the year. But you’re still left with 43 working for you. In this case here, literally for every dollar per hour, more you pay a caregiver, reduces the annual turnover by 5%.
I’m going to repeat that and I want you to write that down. For every dollar an hour more I pay a caregiver, it reduces the turnover rate by 5%. That’s significant. So, I say this because I, I speak to owners every single day who have caregivers. And I still see people paying $10 and $11 an hour and $12 an hour for a caregiver. And I’m like, if you were to give a caregiver $16 an hour would you be able to hire somebody? And they’ll say, oh yeah, absolutely, definitely. I’m like, great. Give them $16 an hour. And they’re like, what? And I’m like give them $16 an hour. If you can guarantee a caregiver will work for you at $16 an hour, give them that much money. Then they’re like, but, but, but, but, but then I’m not charging enough. And I’m like, right. In order to pay $16 an hour to a caregiver, you still have to maintain 45 to 50% margin. Which means you have to be charging $30 to $32 an hour to pay $16. It is as simple as that.
Now I know the next challenge that you’re going to have. Well, but, but, but I don’t know if I can sell it because everybody else is charging less than that. This is why you need inquiry management training to get better at handling the inquiries on the phone. Because really it’s not about the price. It’s about being able to get the case staff and get it done right in a timely fashion. Everybody’s having a hard time getting workers right now.
Everybody. Restaurants, supermarkets, everywhere, Amazon, Walmart. They’re all having a hard time getting employees, not just caregivers, right? Everybody is. The people who are paying more, are getting their workforce to work for them. In order to pay more money, you have to charge more money. It is simple economics, 101. Keep a 45 to 50% margin. Whatever you’re charging, double it. I’m sorry, whatever you’re paying a caregiver, double it. That’s what you should be charging. And if you need help closing, you need help with inquiries, I can help you with that. If you need help in that area, your sales process is not strong enough for you to raise your rates so that you can do what you have to do in order to grow your business. That’s why you pick up the phone, give us a call so I can help you blow away the competition.