Last year saw several significant challenges and opportunities for the home care industry. For example, demand for services was at its highest, due to the ongoing pandemic, but staffing challenges made it extremely difficult for many agencies to meet this rapid rise.
Looking to 2022, early indications show that one of the biggest factors shaping home care will continue to be the high demand, with home care agencies looking to find operational strategies and responses that will help them to maximize the opportunities available.
Emerging trends from the 2022 Home Care Pulse Benchmarking Report, recently released, provide new business insights, and actionable data, gathered from home care agencies across the US.
Here we list the top 10 trends highlighted in the report that show how the course of home care is changing and how your agency can adjust to stay competitive, remain profitable, and enjoy a successful 2022.
1. An increased focus on caregiver recruitment and retention
Early indications show that caregiver recruitment and retention are a primary focus for agencies in 2022, with 45% of agencies prioritizing initiatives to address their staffing shortages.
There are no quick fixes to staffing challenges in home care, but those agencies building a great company culture, enhancing their training, utilizing the right technology tools, and actively seeking to develop their workforce, are in a strong position as 2022 unfolds.
2. Caregiver turnover rate remains steady
Despite the ongoing labor challenges associated with the 2021 economic turmoil, pandemic-related burnout, and The Great Resignation, caregiver churn remains mostly flat at 64%.
This trend may be due to the increased focus (mentioned above) on long-term solutions to caregiver recruitment and retention, and also to many agencies increasing caregiver wages and benefits throughout 2021.
3. A shift in top recruitment sources
Looking at the top five recruitment sources, the latest benchmarking study reveals a significant jump in the percentage of agencies citing Indeed as their leading source. This dominated the number one and number two spot, bringing in 90% of new applicants.
Before leaping to follow this trend, home care agencies need to consider acquisition costs and turnover when using this and similar job boards. While there are obvious advantages, the high volume of applications received is often reflected in high turnover rates.
Agencies should be measuring acquisition costs and turnover rates for all their recruitment sources to ensure they invest in the most cost- and time-efficient sources for their business needs. Thankfully, as with most areas in home care these days, there are technology tools that can take the hassle out of tracking and measuring these metrics and provide you with the reports you need to make these all-important, data-driven business decisions.
4. An increase in pay rates for companion / homemaker roles
A surprising trend shows a 9% aggregate increase in wages across the home care industry – outpacing inflation at 7%.
This trend is one that all agencies should be paying attention to, as pay rates are still high on caregivers’ lists when applying for jobs (or staying with an agency). So, in addition to having excellent employer branding, you have to match your rates to other agencies in your area if you want to attract top talent and retain your caregivers for the long term.
You can easily search job boards to compare your rates with other agencies as a gauge to check that you are keeping up.
5. An increase in blended learning and online training
Reports in recent years have shown that caregiver training and development are excellent for engagement and retention. Training not only provides numerous opportunities for your caregivers to upskill and earn higher wages but also benefits your agency as you can provide a higher level of care and offer more (and specialized) services to your clients/patients.
A combination of blended learning and online training has grown in the last few years due to the pandemic, and this trend looks set to stay. These options are easier to scale and allow agencies to better match training to the varied needs of their caregivers.
6. An increase in specialist training topics
So far, the report reveals an increase in the percentage of agencies focusing on training for specialist care services, including dementia and Alzheimer’s. These can help differentiate an agency, improve referrals for the specific services available, allow agencies to charge more per hour (and pay more), and improve retention.
7. A continued rise in median revenue
The latest home care revenue figures (in the emerging trends from the HCP Benchmarking Report) show median revenue continuing to climb to 3.6%.
While this growth rate has slowed slightly, it does indicate that the industry is still growing and that home care is definitely here to stay!
8. A spike in client turnover rates
Client/patient turnover rates have risen to a five-year high of 76%, which is a huge – and somewhat surprising – spike.
According to a study by the Harvard Business School, increasing client retention rates by just 5% can result in an increase in profits of 25%–95%. So, if your client turnover rates are increasing, it is essential to your business that you act promptly to address the issue.
The long-term success of home care agencies is largely determined by how well they commit to client/patient and family satisfaction. This requires conscious, continuous effort from every member of an agency team.
You can begin by measuring the Lifetime Value (LTV) of your clients and collecting feedback to monitor your client/patient and family current satisfaction levels. If these are down, there are many ways you can begin to target and improve client/patient satisfaction and retention, including better caregiver-client matching, improved communication, and utilizing technology to enhance your agency’s overall performance.
9. A decrease in readmissions
So far, in 2022, a slight decrease in readmissions is reported – at 18% (down from 22% last year). This is a hugely important trend for the home care industry for several reasons, and all home care agencies should have access to technology that can track this metric.
Being able to clearly show low readmission rates sets agencies apart from the competition, highlights the advantages of home care to referral partners, advocates for pay increases, improves client/patient satisfaction, and much more.
In addition, when it comes to opportunities in 2022, 14% of Medicare Advantage (MA) plans will offer home care benefits. While this percentage is pretty low, it has more than doubled over the last 12 months and is predicted to double again going forward. These providers will want evidence to show why they should partner with your agency, so data-driven processes (to prove a reduction in hospital readmissions and ER visits) are essential.
10. An increase in agencies using PPC or pay-per-click Google Ads
While the referral source that consistently ranks highest (year-on-year) is existing client and family referrals, there is a rise in agencies using PPC and pay-per-click Google Ads as a method for client acquisition.
This increase in paid client acquisition can be an expensive trend to follow and isn’t necessarily the right option for all agencies. Home care agencies looking to rapidly build their client/patient base would be wise to track and measure their current client acquisition costs across various referral sources. With this information, they can be sure to invest in the best options to scale in a balanced and efficient way.
Building your agency’s reputation should be your top priority in marketing.
It is an exciting time to be in a business like home care that is growing at a fast pace, gaining in popularity and prestige, and having such a positive impact on the lives of its clients/patients and their families.
By keeping an eye on industry trends as 2022 unfolds, investing in the right software tools, tracking and measuring key metrics, and making clear data-driven decisions, the future is looking very bright for many home care agency owners.