Home Care U - 2023 Pay Trends: How to Set the Right Compensation For Yourself & Your Employees

Episode Date: July 2, 2023

How much should you be paying, how much should you be taking in compensation as the owner, and how should you go about setting pay scales? In this special episode with a panel of experts from the Home Care Association of America, we discuss all these questions and more. Enjoying the show? Send me a text and let me know!Learn more about Careswitch at: careswitch.comConnect with the host on LinkedIn: Miriam Allred This episode was produced by parkerkane.co

Hey, welcome to Home Care U, a podcast made by the team at Care Switch. Nobody went to school to learn how to run a home care agency, so we're bringing the education to you. Join our live audience by going to careswitch.com slash homecareu or listen on your own time wherever you get your podcasts. Home Care U is hosted by myself, Miriam Allred, and Connor Koons of CareSwitch. Enjoy the session. Good afternoon, everyone, and welcome to today's HCAOA and CareSwitch webinar.

Today, we're going to be talking about the 2023 pay trends, how to set the right compensation for yourself and your employees. And before we dive into this exciting content, I want to share just a couple of quick things for you. A reminder that this webinar will be I want to share just a couple of quick things for you. A reminder that this webinar will be recorded, and you will receive a copy of this recording later today. Also, if you do have any questions during the presentation, please feel free to enter those into the chat. Without further ado, I'd like to turn it over to our speakers and start off with Connor.

Connor? Thanks, Andrea. I'm really excited for today. I think this will be really good. Thanks thanks to everyone who is joining. This is exactly the kind of thing that we need to be doing to bring the industry together and help everyone learn how to run our businesses more effectively. So you should all be seeing the home care compensation report slide on my screen now. This will be kind of the source of our discussion today. So I'll explain a little bit about where the report comes from, what we've learned from it, how you can get access to it, and then also what we'll be talking about today. And before I jump in here and get started, those of you who have heard me present or speak before or been on our podcast for CareSwitch Home Care, you have heard me say this before,

but just by way of introduction and to avoid any confusion further on in here, I do have a stutter. Sometimes it shows up, sometimes it doesn't. It's pretty random. The reason that I mentioned that is because if you are listening and you are confused by sudden pauses going on, that is probably not your internet buffering. That is probably not Zoom buffering. That is me buffering. So just know that. Be ready for it. It happens. It's fine.

Explaining a little bit of background about the compensation report. So we launched this this year as a team at CareSwitch and the Home Care Association of America because despite all the good data and resources that are out there for home care agencies, we recognize that there was kind of a gap in terms of more regional, geographically based, size-based pay data to see how much are caregivers being paid, how much are staff being paid, what kinds of compensation are the owners taking, and making it so you can get data that is relevant to your business. So this report, which we'll talk more about how you can get this, and it is free, you can filter all of this compensation data by state and by agency size. It what we're looking at at the slides today. So

there are at last count 528 agencies that are represented. That includes about 76,000 clients and about 81,000 caregivers. And they were all surveyed between about April and June of this year to get the data. So we have this URL on the screen. We'll also chat this out and we'll include this in the follow-up emails. So don't be too stressed about trying to like record this somewhere right now. There's about a five minute survey that we'll ask you to take on compensation in your own business. And so it'll ask about caregiver staff and owner compensation and a few more questions on top of that. And then once you've submitted that, watch for an email with a link to the live dashboard where you can slice and filter however you want based on state

and agency size. We would also ask you to please share the survey link. More responses mean more data at the state level. Lots of states we already have great data for that is, you know, sliceable by agency size and is very actionable. Some of them we are still waiting to get good sample sizes in. So please take the survey, share it, and use the dashboard to help make good pay decisions. Before we dive into our first discussion here, I want to give Matt and Brett a chance to introduce themselves and their backgrounds. We'll be drawing heavily on their expertise for today's discussions. So Matt and Brett, I guess, starting with Matt, if you guys just kind of want to give a brief intro to yourselves and what your background is and anything else you want to say. Sure. Well, I appreciate it, Connor. Matt Erickson, Director of Sales and Operations for the corporate office at Grizzle Home Care, just based outside of Philadelphia and Bluebell PI. I've been in the home care, home health care space for just over 10 years now and has started off

in the scheduling coordinator role and I've done every role from there up except for nursing. So excited to be here and to share any valuable insights I can. Hey everyone, my name is Brent Ringgold. I'm the vice president and a long-term companion. We're a family-owned and operated agency that's accredited by the Joint Commission based outside of Philadelphia. I've been in home

care for 13 years, so over a third of my life as an agency owner and operator. Made a lot of mistakes along the years, but also learned a lot. And I'm excited to share insights and experiences. And we have some really great content that we're covering today. So thank you, Connor and Andrea and everyone for putting this together. And I'm excited to get started. Awesome. Thanks, Brett. And just kind of to reiterate here, because we'll always have this question, we'll always see it several times during this, there is going to be a replay of this.

So we will send it out within a day or so. Having talked to both of these two about the topics beforehand, stay on here, stay with us. This is going to be really, really good. So the first thing that we want to discuss here is around owner compensation. For those who may be listening or not seeing my screen or listening to the recording afterward without seeing this, I'll just kind of describe this just briefly. So what we have here is basically a breakdown of the types of compensation that owners have reported taking,

and then also the average owner's salary specifically broken down by agency size, and we're measuring that by weekly billable hours. So basically, we have about 40% of agency owners taking just salary, and then 11% are taking just net profits, 22% taking salary and net profits, and then 17% of owners aren't taking any compensation at all. On the salary side, on the lowest end, we have owners taking a salary of about $39,000 on the highest end. For the larger sizes of agencies, our average salary is about $144,000. So a pretty good spread here. Lots to dig into here.

I think one thing that strikes me to kind of pose our discussion here is that depending on the circumstances of your agency, your long-term goals for it, and what your needs are with it, this can be a really great, very fulfilling job with a super livable wage and a way to provide financial security for yourself and your family. It can also be a very expensive way to buy yourself a really stressful job. And it all comes down to how have you planned your compensation in relation to the goals and circumstances of your agency? So that is my first question for Matt and Brett is how can owners make sure that the compensation that they have planned and are taking from their agency is in line with their long-term goals for their

agency and what it's going to take to get there. I'll kind of hand it off to you guys. Let's start with Brett. I think that of everything we're going to cover, this is more of a philosophical question than more strategy and insight driven, but it's still a really important thing for every agency owner to be aware of, right? My personal belief and when I have conversations with very successful owners from across the nation, they share a similar perspective that you really should be willing to reinvest as much back into the business as possible. You know, Connor, like you said, there are easier ways to earn a living than being a home care agency owner. It's not a lifestyle business. You have to really be committed and being really aware that whatever you put in to any effort that you have in life, you're going to be repaid tenfold. the comparison between agency owners and professional caregivers, who in a lot of ways, we have a lot in common, right? You might have interviews tomorrow with two professional caregivers. The first could come in and she or he might just be as happy applying to Target or

Wawa. And to you, being a caregiver is just another paycheck. Your second caregiver, she could be a passionate caregiver that she wants nothing more than to help others each and every day. And her heart's in this, and it's her true calling to be a professional caregiver. That second caregiver that you interviewed, chances are she's not only going to stay with your agency longer, she's going to be here in the industry touching others for a very long time to come. So, you know, agency owners aren't different. You have those agency owners that they feel like they read the reports about home care is growing and the industry is growing

and all the baby boomers who are turning 65 now are turning 65 every day. And they look at it a way to, you know, have a big exit in years or have a big salary. That's not going to be a very successful owner in the long run. You have to really have to want to make a difference in the communities that you serve, make an impact on the families that you're serving, your clients and the employees that you're working with. And when you have that understanding of what it takes to be a successful agency owner, you're willing to maybe not live as high off as you can because you're investing everything into your business. Specifically for me, I joined working with my mom in 2010, the end of 2010. I didn't start

taking a salary or any compensation until August of 2012. I was working another job. I had some savings. I was of the mindset to put every single penny that I could into people, into processes, into growing my organization so that rather than taking money off the table in the early days, I would have a successful organization for a long time to come. So I think this is more of a philosophical discussion that we're having here. Every agency owner is going to have a different circumstance. Some might have larger families, tuitions, mortgages, whereas some might be somebody who's just graduating from college. So depending on what your circumstances are, your compensation might be different. But I would definitely advise you to put every last penny back

into your business. And then I like to share one stat just really quickly that always blows my mind. If you have a penny, you double it every day for 30 days. On day two, obviously you have two pennies. On day 10, you have about $5. And maybe you're walking by Starbucks, you wanna get a cup of coffee and those $5 from that one penny,

you could spend right then and there. If you decide to let that penny double every day for 30 days, after 30 days, you have over $5 million. So it's not about the short term. It's really about keeping your mindset on the long term. And the more that you could reinvest into your business, the more you're going to be successful. Love it. Thanks for that, Brett. I may have some follow-up questions, but first let's hear Matt's take on this. Well, I certainly, I wholeheartedly agree with everything that Brett said. And it's certainly, that's something we echo here at Griswold and it's about the journey, right? You know, know what, you know, the, what your end goal is, right. Which is, you know, how do I, you know, how can I have an impact on my community? Right. And that's a driver,

you know, that is, we see all of our owners, community? And that's a driver. We see all of our owners. That's one thing that they all share in common, wherever career or walk of life they came from. They want to have a positive impact and a legacy. And that's their pull through, right? Through getting their business off the ground, through our wildly successful owners. That still resonates. Through that all, again, I agree it's 100% philosophical here. Get that race to profitability first to give yourself choices. We can't have the choice in compensation

if we don't have the profitability. So that's one of the things that we really encourage. And we work with our owners closely on is looking at the PNL and those financial decisions that what's puts you in the best position to then consider not only your compensation, but, you know, creating the choices for you to have that opportunity to like, how much are we going to reinvest in the business and the professional development of our internal external staff, investing in training and all the additional benefits that can set us apart as an employer choice. When we can manage expenses early on, that, you know, to the penny analogy is going to create, you know, exponential, you

know, just investment options. And that's the key there is what I, you know, what we see paying time and again in various different models, whether it's in business lines as well, is just making sure that, you know, you're taking care of your people internally, and then they're going to take care of you to allow you to take a rising compensation package that's going to reflect your investment risk. That's certainly what we want to look at here too, is we want to develop everybody else, but it's a business and you took the biggest risk as a business owner. You need to also reward yourself to the level that you feel comfortable and set and can take care of your family and your needs. Love that. Thank you. The theme that I'm hearing from this is that as much as possible, think in the very longest term you can, but take what you need to for the time being, you know,

to make sure that this is worth it for you and your family and anyone else that you may be there to provide for. Oh, absolutely. I mean, perfect example, just to add one other thing, you know, we've, you know, we've had owners at Griswold that have embraced that mindset. And now we're seeing their children come in and take and step into the generational role. And we're seeing second and soon to be third generation families. We've been in business over 40 years and that's, and we're seeing that long-term vision is creating, you know, generational wealth for our families. And that's, I think, also address one question that I am sure that is being asked behind the scenes right now, in regards to the data and specifically the pie chart showing the different types of owner compensation. So here we use the term net

profits to show the largest slices of responses we got. To actually kind of be more clear here, in the survey, we ask about two different types of potential ways owners can be taking profits from the business. So we ask about, are they taking just whatever net profits are left after all expenses and saving goals or whatever, or are they taking a set percentage as their draw?

What we found that it is much more likely for them to be taking net profits. However, for those who are taking a set draw, that is included on this graph in the 7% of other, but you can see more specific data around that in the report itself. So I just wanted to clear that up. Let's go ahead and move to the next slide here. There's some things I'm excited to get into. Here we're looking at the percentage of agencies paying each role in their office staff performance-based compensation. So by that we mean, and like not for their entire compensation, but that might mean, okay, you have a goal to hit this metric. If you do hit this metric, then like you earn some kind of bonus attached to that.

And generally in this context, we're talking something that is substantial enough to be an actual sizable, measurable part of their overall compensation. Almost all of these numbers are in the single digits. So 10% of agencies said that they're paying performance-based compensation to non-owner executives, 4% to billing and reception, 6% to scheduling, 5% to field supervisors, 3% to clinicians if that role is separate from field supervisors in the agency, and then 7% to HR and recruiters. Those who have heard me talk about these topics before will know that this is a soapbox I can talk about for a long time, that I think there is a huge amount

of potential upside, both for the agency and the employees being left on the table if you're not investing in the right format of performance-based compensation for your office staff in your agency. Some of these roles are more easily conducive to that than other roles, but there is a place for them in all these jobs. So before I get too deep into this, I'm going to hand it off to you both. See what you think of this. So I guess the best way to ask my question here is, you know, why is performance-based compensation useful? And what are some specifics that you recommend agencies consider when trying to implement it? This ties in, you know, I'm big on goal setting, knowing what's directionally, where do you

want to go as a business owner, whether it's quarterly, annually, long term. Part of the reason I see these numbers in single digits is it's not easy to get to an alignment of the right compensation that's scalable and that can continue in simplicity towards for the long-term goal, right? So that's the biggest thing is we see is how do we just find easy numbers that are trackable daily for everybody in these respective roles to manage, to understand how to operationalize them and how they have an impact on them. And that's something that is not, that's not easy for everybody.

I certainly had to learn it myself personally, coming up as a coordinator and understanding my compensation package. I came from my start, I've always had a base plus a performance comp package, and it wasn't always easy to understand it. Sometimes it was like, all right, here's this giant algorithm and this is your output. Right. And I had no clue how I impacted it. And there was other times when I worked in the franchisee side, you know, I understood I made it simple and that's the goal is the buy-in. Right? So you can create a complex, you know, performance compensation

package, but if there's no buy-in from the individual, you're going to see the disconnect and you're going to be spinning wheels there. So we really, we coached to an alignment on what matters most. Do, you know, what's your ultimate goal? Is it net new hires for the HR recruiter? We've seen adversely performance based on just simply new hires. People come in the front door, but then there is exponential turnover out the back door and the owner is draining money. I'm wondering why they're not growing. So looking at the right measurables for that role, and especially whether it's net new hours, net new clients, net new hires, those are going to be the key drivers that are from a simple goal. We found whether you're a brand new owner in year one or you run a $12 million home care business, you can scale performance-based incentives off

of what's moving the needle the most. And we usually find it's that net comparison. I love that. And before we jump over to Brett's thoughts real quick, I just kind of want to point out something you said that I really agree with, which is that need to make sure that they're involved in selecting the goal. Generally speaking, we'll find that whoever is kind of like the administrator seeing the bird's eye view of the business will usually be best placed to choose the actual metrics. But when it comes to choosing the goals, the actual numbers that they're trying to hit, they need to feel empowered to hit that. They need to feel a sense of ownership in that. And usually one of the best ways to do that is to involve them in the conversation of what number should that be

that they're trying to hit. And then obviously you as the administrator, making sure that it's connected to the numbers that the business is trying to hit. All right, Brett, let's hear your thoughts. Yeah, thank you. I think you both touched on probably the most important reasons why we do this. Ownership. You want everybody to have buy-in on the success of your agency. That's super important. So everybody's aligned. We're all dealing with different parts of our operations, but we all have the same goals to be a successful home care agency, to be the best provider we can be, the best employer. So by having these performance-based elements of our comp, everybody has ownership on the success. And Matt, you said that this is very scalable. You have to make sure that it's easy, that it's understandable.

I love that. I think that is so true because it shouldn't be calculus. It's not algebra. You should never have to figure out how you earn this portion of your paycheck. It should be pretty clear and delineated. So that clear understandability and scalability is super important. I'll try to add a few things here. I'd suggest that you want to make sure it's standardized. talking about your scheduling team. If you have two schedulers who are both, they both have the same caseload, they schedule for the same number of clients, number of hours, they shouldn't have different incentives as far as best practice is concerned. Now, if you have a scheduling manager and two schedulers who report to the scheduling manager, it can totally be appropriate to have different performance-based compensation applied to each of those roles. But the standardization so that it doesn't become a math equation is super important. I would suggest also

that if you're an agency that hasn't yet employed this method of compensation and you are considering doing it, it's always wise to maybe start it as a short-term initiative. Anytime you tell your team, we're going to have this performance element of our compensation, and it's assumed that it's going to be permanent, and then you decide at some point to cancel it, you're going to have dissatisfied office team, and that's just going to have so many different implications. So if you're not sure, if you really want to make sure that this is right for you, which I personally believe it's right for every agency, I would suggest telling your team this is a quarterly initiative that we're going to try. And then at the end of the quarter, you've reserved the right to extend it, to make it permanent, but maybe dip your toe in the water before committing 100%.

As far as performance-based elements of compensation, it's usually wise to have team goals and then individual goals. So you could say, you know, from a team office or branch perspective, if we have certain, you know, one easy aspect is growth. Let's say your branches is scheduling 3,000 hours of care a week. If your goal is to grow by 10% or 20%, you could tell your team that if we achieve for four straight weeks an average of 3,300 hours, that's a 10% increase, we're going to have this performance-based compensation for our team of X. If we're able to hit 3,600 hours, which is a 20% increase, there's a performance-based compensation of Y. So that's just one way that everybody on your team is pushing toward the same outcome. One rarer way of performance-based compensation that I've seen but that I really like is toward satisfaction. So if you want to say, as an agency, we want to have a certain threshold,

we want to hit this level of net promoter score or OSAT or this element of performance, make satisfaction so that your caregivers and clients' satisfaction is compensable to your office because they are going to really be so important in making a happy agency from a client and caregiver perspective. So that's the team goal. As far as individual performance-based compensation, you know, for your scheduling team, do you want to schedule 100% of your shifts? Do you want to monitor the average time it takes to start a new client? Do you want to monitor overtime as a performance-based metric? in your organization. I think single digits is definitely very low. For clinicians, the number of assessments performed, the number of wellness calls and visits performed for human resources, the number of hires, the speed to hires, you could just determine whatever is most important for your agency, but there are measurables you can have for everybody. I would just caution everybody before you roll

this out for the first time, really think through what the outcome is that you want. You know, if you're an agency that budgets for overtime and you budget $2,500 a week in overtime and you tell your schedulers for every $500 they're able to save off of the budget, they get a $200 bonus. You can have a scheduler tomorrow decide to cut all over time, but cutting all over time isn't wise because you'll have some disgruntled caregivers, you might have additional turnover. So just make sure that whatever performance-based goals you have introduced, there isn't a negative impact on a different part of your operations. If I could add something there to what Brett said, because you highlighted a key part,

that cross-functional goal setting. One of the big things we tie in, you mentioned about client retention and the NPS score satisfaction. To illustrate that further, we recommend a 60-day rolling performance incentive for our marketers that are signing the clients for follow-up, right? So they're working collaboratively with the schedulers that they're assigning that case to, to ensure that there's that follow-up, that the family has one point of contact for continuity's sake. And you have the coordinator working with the marketer, right, to keep that client there, keep them happy, to ensure that there's that warm handoff. Same with clinicians and the coordinators. So you want to watch when you're creating these that you don't accidentally silo your staff into where that they are, you've inadvertently selfishly focused them on their role and their role alone, but you want to weave together all their goals to some degree to where there's a level of teamwork that the only way that they're going to achieve that goal is through collaboration with others in the office. And this can really

kind of help individuals with different personalities in your office that are high performers to really force them into being comfortable collaborating when the otherwise personality-wise wouldn't naturally tend to do so. So it's a really unifying factor here when done it right. Love that. A couple follow-up questions here for each of you guys, I think, because there's a lot of good stuff here. I think first of all, like this question of how much do you compensate like your team as a group and how much as individual? And obviously it should probably be a blend, but in terms of finding that balance, I think sometimes the more challenging part can be to identify the right individual metrics to make sure that they do have things that they feel empowered to hit that are

within their soul or mostly soul control. I think Brett, like you gave a lot of like really strong examples of like some of the types of metrics that they might choose for each role. Matt, if you, if I can challenge you a little bit here and see if, see if you have any metrics you want to share off the top of your head, as far as specific metrics they might consider using, I'd love to hear them. Yeah, no, absolutely. My favorite really, especially from the director of operations and that non-owner executive, we like to look at what's the big picture.

They should be the unifier in the office, the team leader. So we don't want to kind of hyper-focus them incidentally. So I get back to the net growth. That's key, right? Managing to the bottom line, also ensuring that we're heading in the right direction. So the net new clients, net new hours, like to look at year over year performance as well. So you can set up a framework to where, all right, this is our goal. We want, if we did X last year, we need to do 5% more than we did last year for our annual this year, that is a great way to

help them drive at a macro level, overall, you know, team uniformity in achieving their goals. From there down, I like looking at scheduling again, to Brett's point about fill rate. Personally, I like to use like if we were exceeding that you had to qualify for your bonus based off of 95% fill rate. So we didn't even talk performance-based bonus if you were over 95%. And then we looked at the schedulers as far as managing to that they would see a bonus, you know, kind of add on, right? Multiplier in a way, if the average bill rate was between three to 5% over a period of time, we like to use overtime as a way to kind of grease the wheels in a way, you know, make sure that we achieve the rate and we achieve client satisfaction. But, you know, you want to quantify that to have the guardrails for it. So, and that encouraged our coordinators to not hyper-focus on

zero. And ultimately we saw a direct correlation between 0% overtime and client satisfaction, but to be responsible with that. With clinicians, it was extremely important to, we looked at accuracy of scheduled assessment to when the data was actually scheduled, like actually completed, right? Because we wanted to measure to, you know, Medicaid regulations. We wanted to ensure client satisfaction with communication on scheduling. So we looked at, you know, when did you schedule it? When was it actually completed? And then also we heavily weighted it towards client satisfaction because they are going to, they are looked at as the most, sometimes most qualified or clinically competent, you know, of anybody that, you know, from the client's perspective, we want to make sure that they're

our purveyors of our culture and exactly our differentiator. So we heavily weighted it there. And then with HR and recruiting, that one was huge. We like to look at a unique one of not so much is conversion rate to hire, but we like to look at the ultimately applicant to first billable shift. So that coordinator, the HR recruiter is really a kind of a guide in the onboarding of that applicant experience, you know, and make sure that it's a unique, pleasant experience at Griswold to where ultimately they are decreasing time to hire for the individual that's coming on board. They have an excellent experience and we're putting them out there to where they're moving the needle and driving revenue growth. But we saw a disconnect

there and we converted that a couple of years ago from just applicant to hire to applicant first billable shifts. It's because it wasn't moving the needle. We were getting a bunch of hires, but then they weren to applicant first billable shifts because it wasn't moving the needle. We were getting a bunch of hires, but then they weren't actually being put to shifts to increase fill rate or to increase revenue for the office in hours. So when we move the needle to first billable shift, we're actually seeing the needle move exponentially faster when you started performance bonuses towards what's happening there. And how are we focusing on the bigger picture to actually drive the qualifiers on satisfaction, management, and growth? Love that. Thanks for sharing all those. And I'm sure that people will be grateful for the replay

so we can go back and listen to that part and make sure we get every little detail that you just shared there. So I think before we move on to the next section, last question, and this is kind of for either or both of you, if you have any strong opinions here, when we look at employees like total compensation packages, how should owners decide, you know, what percent of a given role's compensation should be performance-based versus base? Well, I would say for the sales marketing role, that's the one that would be, I think, the most unique of all these. And I've seen a wide array of opinions from a lot of our owners, both within Griswold and outside of this. But I've always found you want to give them a comfortable base, competitive with the market.

Indeed's got some great tools as far as looking at compensation. We always like to reference that to kind of just get a baseline for market, you know, what the market's paying that regionally there for that role. Give them, you know, cover their cost of living. But you want to, I think, heavily weight their overall potential on what they can do to drive, you know, drive the inquiries, you know, kind of make, make the compensation, you know, competitive enough to where they can be the kind of like the, they can control their destiny essentially, right? If you are overcompensating them and make them comfortable in a sales marketing capacity, you're going to see, you know, overcompensation and underperformance. So we want to, you know, just be fair there. And

I would say drive, you know, we like to drive it off of, you know, that rolling 60 where, you know, overcompensation and underperformance. So we want to, you know, just be fair there. And I would say drive, you know, we like to drive it off of, you know, that rolling 60, where, you know, hey, you're gonna you land 168 hour case, we like to give you like, say, like, you know, a one to 3% revenue share of that for 60 days, but you know, that's going to burn up. So, you know, you want to keep, you know, keep grinding and keep that sense of urgency up to refill your tank and make sure that your compensation is maximized. That's the biggest, most unique one there. But then with all the others, like scheduling, HR recruiter, there's going to be seasonality at play. There's going to be things that they can't control as much. So we like to look at making sure that they have a comfortable base salary, but that they can really, the upside is that base salary

can be market competitive, but not exceeding, but you could potentially reach market exceeding levels based off of that additional compensation if you're hitting your qualifiers. That makes sense. Brett, you have anything to share there? No, I agree with everything you just said, Matt. I think with your sales and marketing team, that's going to be the most performance-based for most agencies. I've seen with a lot of agency operators I speak with, like an 80-20 mix, 80% base, 20% performance-based. I've seen with a lot of agency operators I speak with, like an 80-20 mix, 80% base, 20% performance base. I've seen the other way. And that works depending on your agency and your team. We always have a performance-based element for every role within our offense.

And we always try to set these goals to be difficult to achieve, but achievable. You don't want them to be layups. You don't want them to be slam dunks. They want to be hard, but attainable. So many years we're paying 10, 15, 20% on top of salary for any of these other billing reception, scheduling, field supervisors on top of their base salary in performance. And the more that we pay in performance, we're never upset because that means that we're doing something right as an agency. So don't look at this performance as an extra expenditure that you're going to have. It only means that you're more healthy and you're doing better as an agency and growing and having happier clients. So don't let these numbers scare you from implementing a performance-based element to your compensation. Love it. Okay. Last question on this topic, and then we'll move on. In, I don't know,

like 15 seconds or less each, your opinion, should these performance-based metrics and their compensation for it be capped or not? I say no. I think what you do, what we like to recommend is that you do the compensation you reevaluate annually. So during your annual review, you know, you look at, do we need to adjust or tweak any of the, any of these compensations based off of how much we've grown, you know, or do we need to realign the goals is look at it more so that way, but put a cap there. You know, I think you're you're taking away from the complete commitment to driving the team, right? You know, you don't want to,

you know, you truly want to give them all the run to run and rising tide lifts all shifts. And that's essentially, you're cutting yourself short there if you cap it. But if you need to reassess, you still want to give yourself control of the situation and you're not going to kill yourself in a year. So, you know, that's where I think, you know, you can always reassess and, you know, based off strategy. I agree. I agree with what you just said, Matt. Don't cap, have different levels, different targets that your team could reach. Some might seem fantastic, unattainable, but some years your team might actually hit those numbers. And it's a living, breathing thing. You could set the targets today, reassess them every quarter, reassess them every month if you really want to do that.

There have been some years where we've had to tamper down on our expectations and there've been some years that we blew them out of the water. So I would recommend against capping, but just making different levels that are achievable. Awesome. Love that. I'm sure that lots of us have seen the episode of the office where they introduce caps for their sales and Jim hits his goal in like July. And then, so he just like taking the rest of The Office where they introduce caps for their sales and Jim hits his goal in like July. And then, so he's just like taking the rest of the year off. I would say in general, introduce caps on performance-based compensation if you want to introduce caps on performance. And if you don't, then probably consider not doing it. Okay. Let's go on to

the next one here. Thank you for all the thoughts on this discussion. We'll go through this one somewhat fast, but I think it's important to talk about. So this graph is talking about how are agencies choosing to set their pay scales for caregivers? around type of care slash certification. Are they paying based on tenure with your agency? Are they paying based on overall experience? Or are they paying based on length of shift? And generally, it's kind of some combo of those things. And so that's why this is a bar chart rather than a pie chart, because it adds up to way more than 100%. So we have 77% of agencies are paying based on type of care slash certification. 58% are paying based on agency tenure. 60% are paying based on overall experience. And then 34% are paying based on length of shift. So kind of a good mix there. My question here is, what factors should agencies be considering when they're deciding how to set their pay scales for caregivers? Let's go ahead and start with Brett, and then we'll go to Matt on this one.

And this is important to consider as an agency operator, especially if you're new, but even if you're more tenured, these are all different factors that we take into account. The other one that I guess has a correlation with overall experience certification, but these are all ways, and like you said, Connor, it's not going to add up to 100% because as an agency operator, you have to find that perfect balance. Generally, you are taking two, three, four, or five different factors into account. All that I would advise is that you're being consistent, right? You don't want to have two caregivers who have the same level of experience, tenure, certification, working with the same client. One works Monday, Tuesday, one works Wednesday, Thursday, and they're earning different

rates because your scheduler happens to like one more than the other. You just have to make sure that it's very transparent to what Matt said with performance-based comp. It shouldn't be an equation to figure out. It should be very clear and delineated in your pay policy. So whatever you're doing, do it consistently. There are some variables which would allow that second caregiver to earn more than the first. I've seen agencies where they say for travel time, if you travel more than 30, 45, 60 minutes to work, you're going to get paid extra. Or if you travel more than X miles, you're going to get paid extra. But that's a company-wide policy that goes for everybody. So you want to take all these factors into account, but just stay consistent. And I would

advise everybody that these numbers, this blend is going to change based upon your client census, based upon just the landscape that we're in. Wages are going up, wages are not going down. And there are times as an agency owner, especially a newer one, you might have a new referral source that is referring many overnight clients, and you just don't have the roster of overnight caregivers. So you decide, I'm going to start paying $3, $5, $10 an hour more for overnight shifts, just be aware that whatever you start implementing, it's really hard to go back on. So be very mindful that if you tell your caregivers when they work overnight, they're going to get $5 or $10 an hour more. And obviously,

you've looked at your employee policies or handbook, you've given them the proper notice to make a change in your pay structure. You could increase your pay rate. But once you have that roster of caregivers to support this new referral source, and then you turn to your caregiver and say, okay, we're going back to what it was before, that's not going to fly, you're going to have a lot of angry caregivers who are not going to stay with your agency very long, even if they go to an agency down the street to earn exactly what they were with your agency. So just make sure that whatever you're doing isn't done reactionary. It's done standardized for every single caregiver in your agency. And just be very clear with your policies to make sure that whatever you have in your handbooks, in your comp policy, that you're following through. Love it. Thanks, Brett. Matt,

let's hear your take. Yeah, absolutely. Definitely agree with everything Brett said. One of the ways that we look at this whole conversation, because this can, I think, drive the most amount of anxiety or just overall friction on how to implement this, how to manage this, how to, you know, make sure we take care of the caregivers, but also our bottom line is look at your payer source diversification. How much breathing room are you giving yourself? Are you, you know, do you have really tight margins as is based off of, so, you know, really low, you know, reimbursement rates, right? So one of the things we preach here is, you know, making sure that you have that private pay, you have, you know, whether it's a VA, if you're working with Medicaid, long-term care insurances,

understanding what that ceiling is there and what your ability is to reward. We like to look at all these, but also what is the pay rate that you want to give for the, I always forget how I say this, but the outcome desired, right? So you want to say you reward them for the experience to Brett standardization. A hundred percent agree. You have to do that. Like that's just that there is no, you don't want to create enemies amongst caregivers because they talk as much as you tell them not to, they talk and you want to be fair to everybody, right. And reward. And that's how you keep retention going.

But then you also want to encourage them, right. To like, listen, I know you got more in your tank, learn with us, do our training. And this is what, you know, this is your compensation, right? And be willing to put yourself on the line there from compensation, because people will rise to the occasion. If you're making good recruiting and hiring decisions, you're going to be amply rewarded with the compensation that you give them. So it's a balance of understanding what your end goal is for your external field staff and what your goals are for the business and aligning your payer source diversification with your compensation structure for the caregivers and allowing them also to see, I can grow with this business. Is there a senior CNA role where they can mentor somebody, give them an avenue of growth within the business, then that's going to only further help your retention and reduce your turnover costs and increase happiness and satisfaction with your pay scales. Tons of really good points in here. I think one thing that I just kind of want to recap for people

too is that we're seeing more and more often agencies will introduce performance-based retroactive raises for caregivers, which is obviously a big consideration because, as Brett has said several times, as soon as you introduce a raise for people, it's kind of hard to take that away. So you have to be very thoughtful in how you introduce it. And when you're talking about retroactive raises for that large a group potentially of your workforce, that becomes a big expense really quick. So it's good to be very thoughtful and methodical in that one. But a huge potential to align your entire team, including all your caregivers with the most important goals, using retro move to our last discussion here. And let me just kind of frame this one a little bit. So this is kind of a shift in topic. We're moving past just compensation and talking about kind of more of the potential costs

associated with your employees, that kind of thing. What we're looking at is what is the financial toll to your agency when you have a no call, no show for a shift from a caregiver? And CareSwitch has really been focused on this as a company for the last few months, which is why we're asking about questions about this in the compensation report, why we're discussing it here. It's also why we've actually been making changes to our platform itself to use artificial intelligence to solve this problem. And we think we've found some really interesting solutions, but I'll kind of get to that at the end a little bit. Just for those who may be listening to this after and not seeing the screen.

So some of the highlights from our findings on no-call, no-shows. So around 1% of shifts will result in no-call, no-shows. So around 1% of shifts will result in no-call, no-shows. Every no-call, no-show carries an 18% chance that that client will cancel services. If you look at costs from that, so both the potential cost of the client canceling services based on what we have found from benchmarks around the average amount that a client will pay during their lifetime with the agency, and then also the costs of just lost hours that you can't bill when there's not someone there working. Every no-call, no-show is going to cost the agency an average of $1,643.

That is every time you have a caregiver no-call, no-show for a shift. The average agency is losing an amount equal to 7% of their annual revenue to no-call, no-shows. And to be clear here, that is an amount that they've already spent cash on from a marketing and overhead standpoint. That's not just unrealized revenue. That is unrealized revenue that you've already spent dollars hoping to make. So with that average 7% number in mind, and I laugh a little bit, not because it's not a serious topic, but because, I mean, frankly, that's more than I expected when I was doing the math from this data. And it's just kind of crazy to think about.

With that in mind, what tips do you have to kind of mitigate the number of no call, no shows happening and their impact on your agencies? Let's go ahead and start with Matt on that one, then move to Brett. Sure, Absolutely. So having experienced many, many of these over the years from a coordinator all the way up through, you know, being director of operations for a franchisee, you know, there, it starts with the hiring decisions you make first and foremost, you know, you want to look at, you know, a no call, no show, where does it start? It doesn't start with the coordinator itself. It starts with the recruiter and it starts with the, and how you've motivated them to find the right people. So an

education on the alignment to the vision of the business, the culture, what the expectations are, and making sure that they are able to manifest that appropriately and to identify the talent and the, and oftentimes the soft skills and the intangibles. So identifying through behavioral based questions, you know, does somebody have a strong moral compass on integrity, right? Or does somebody have the aptitude? Do they have the ability to learn, right? You know, maybe they there. And then looking at the, you know, the experience and orientation, setting expectations for the caregivers and reading them, right? When you set the expectations there, do they balk at it? Do they, are they still of disinterest? So identifying and really watching very closely in your orientation in person of these new employees, do you see them acknowledge and interact or do you see them disengaged?

These are all tells of whether you're going you have a high performer or somebody that's just there to collect a paycheck and is indifferent to your vision and culture there. You want to then obviously watch them very, very closely as they go out and they go to shifts. You want to set them up for success. So, you know, we never send out a new caregiver to a new case. You want to make sure ideally that you have somebody there to orient them and have a warm handoff on their first shift. That first 90 days is critical in setting performance measures in place as well as additional communication methods. With those caregivers in the first 90 days, we've seen help reduce the impact of no-call no-shows as well as turnover. Lastly, communication is key. And it's not just text messages and emails, it's actual phone calls and in-person visits with them. Showing the caregiver that you're going to show up and visit them while they're working. It's an extremely lonely business because you are autonomous in this role. You are taking one with the client and the caregiver doesn't have a sense of team uniformity or team collaboration. So when you're able to be there and show them they're a part of a greater team, that buy-in reduces no-call show rate, as well as just calling them and confirming shifts

repeatedly. They have a very stressful lifetime. Sometimes they're balancing multiple jobs. You're one of three employers. They can honestly get their schedules confused. Assume best intent and always do your best to support them in achieving the goals and making sure you're calling to confirm. That's also an early warning sign that we like to use. If we're not getting the appropriate confirmation that they're going to be there for their shifts, we like to set in place quick action drills to where we're going to start reaching out to other caregivers to set people on deck so that we can place them in case we don't feel comfortable, we haven't gotten confirmation of that shift. And doing so at scale is absolutely possible. If you're maintaining the right ratio of caregivers and clients to coordinators,

you can achieve that level of communication and success for your business. Thanks for that. So much to dig into here. I am excited to listen to the replay just to go back through that response specifically. Something I want to touch on before we go to Brett's thoughts here really quick is you talked about the importance of even when there is a no call, no show to assume good intent. And I think so many of the times when this occurs, it is because of something that has happened in the caregiver's life or in their day. And your first concern when following up on what happened with the no call, no show should be for their wellbeing first. And then the rest of, of the considerations around it second. And that doesn't mean that there's a lack of accountability with it or a lack

of consequences, but it does mean that with all the things that can happen, whatever caused them to not show up and not say anything about it is probably impacting them most with the possible exception of the client. And so the first concern should be to make sure that they're OK. So all that being said, I just want to throw that in there. Brett, let's hear what you think on this. Yeah, I absolutely love your response here.

It doesn't start with a scheduler. It's all about how and who you recruit, how you train your orientation process. That's the first way to stop it. The communication that you touched on, both talking to your caregivers on a regular basis, being invested in who they are, not just professionally, but personally, and making sure that there's touch points leading up to shifts. Those I'm just going to echo. I know you said them, but I want to throw them out to our audience because those are just so important.

We like to look at no call, no shows, two different ways. There's culture and then there's planning, right? So if you have a strong culture, if you're an agency with a very, very strong culture, you're invested in your caregiver's wellbeing. Again, not just professionally, but personally. I was told many, many years ago that people don't like to let their friends and family down. So if you have a culture at your agency where everybody feels part of a greater good, part of the long-term companion family, like we say, you're going to have less no-call, no-shows than an agency that has a mercenary approach that looks at their caregivers as numbers.

So really caring about your caregivers is the first thing. You know, If you're not invested in your caregiver's well-being and satisfaction, then there's really no reason to expect them to be involved and have an interest in your well-being. They don't care that you're going to lose the client or that you're going to have a headache trying to fill that shift because you never showed that you care to them. So I think the first thing is just having that culture in your agency is a great way to mitigate it in the first place. And it's really easy, you know, show appreciation, do caregiver of the month, newsletters, recognize anniversaries, have reward programs, and just communicate and check in, not to say, hey, can you pick up a shift? But hey, how are you doing today? What's going on in your life? How are you feeling? You just want to be there and connect on a personal level. And that time and caring is going to lead

to less no call, no shows. But regardless of how wonderful you are as an employer, regardless of the culture that you have, you're not immune to no call, no shows. It's going to happen to every single agency. It just might happen less often. So like you said, Matt, those shadow shifts, those training shifts, whenever you have a new caregiver who's either new to your agency or working with a client for the first time, have a paid training shift for that new caregiver. That's going to decrease a no-call, no-show and decrease lateness. Those confirmations you touched on really track trends. If you have a caregiver who was very consistent for six months and all of a sudden they're not no call, no showing, but they're calling out with a little bit of notice and then even shorter notice on certain types of shifts,

track your data, look at trends and be able to have a conversation with that caregiver. Like you said, maybe there's something going on in their lives, something personally that they don't want to let you down, but they just have a lot going on personally. So you might have to offer them an alternate schedule that's better for them to avoid a potential no call, no show in the future. I know that there are times when we're in a bind to fill a shift as administrators and schedulers. Never guilt your caregiver into showing up for a shift.

They might say yes and not show up, or they might show up and ghost you in the future. So just try to incentivize and find ways to encourage your caregivers to show up rather than guilt them. There are a lot of other things that I could share, but I know we're running right up on it. So I'm happy to share offline at any time. Okay, thanks. Well, I appreciate it. Lots of good stuff in here. We probably should wrap up for the sake of time. We have a handful of good questions in here. They're all kind of centered around the same topics, which are specifics around the data itself and the report and how to get some of the answers there. So I will address questions in the follow-up email that we'll send out today or tomorrow when we send out the replay, which also addresses a couple of the questions that we have sitting here. We'll include the link to take the survey where you can then get the link

to the dashboard to get the data. We'll also include the slides in there that we're using, which kind of have some bonus slides we never got to today, and the replay link itself. I mentioned, too, the work that CareSwitch is doing to create AI-powered software that actually solves the problem of the no-call, no-show using a very sophisticated algorithm we built and the ability of AI-powered software to work faster than a human. And so I'll send out more information about that in the email as well, because I'm very excited about what's happening here. So all that being said, I will hand things back to Andrea and we'll go ahead and close out. So thanks again. Thank you guys so much for sharing

so much great content and discussion today. A lot of information and content covered today. So thank you to all of you for watching today. We'll get that replay out to you right away and the additional content that Connor mentioned as well. Thank you again for joining us this afternoon. Have a great rest of your day. That's a wrap. This podcast was made by the team at CareSwitch, the first AI-powered management software for home care agencies. If you want to automate away the menial of your day-to-day with AI so that you and your team can focus on giving great care, check us out at careswitch.com.