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How Understanding Your Home Care Business Performance will be the Key to Success and Growth

Published on June 28, 2023 by Sharon Morrisette

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Do you know how satisfied your clients and their families are with your home care services?

Or how much it costs your business to acquire each new client? And which referral sources are the most time- and cost-effective?

What is your current caregiver turnover rate, and are you quickly filling open positions? How much is it costing you to hire each new caregiver?

Is your billing timely and accurate? Are you owed any money?

If your home care business is to be successful and continue to grow, you need to understand the value of these business metrics and have an efficient and effective way to track and measure them. 

Why is it important to track business performance metrics?

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As a home care business owner, tracking key performance indicators (KPIs) is vital for your company’s future success. They provide a quantifiable way to measure how well the business is performing.

In other words, instead of relying solely on intuition or gut feelings, businesses can make informed decisions based on concrete evidence. This ensures that decisions are rooted in data and are, therefore, more likely to yield positive outcomes.

Performance metrics play a crucial role in evaluating the performance of individuals, teams, and the organization as a whole. In general, they provide an objective basis for assessing employee performance, determining bonuses or incentives, and identifying areas for training and development.

By tracking key metrics over time, such as sales, revenue, customer satisfaction, or employee performance, you can assess progress, identify trends and determine whether the company is moving towards its desired goals. When performance metrics are aligned with the company’s strategic objectives, they provide a roadmap for success.

Regular monitoring and analysis of these metrics mean businesses can identify areas that require improvement and areas where they excel. This information can guide decision-making and resource allocation to enhance overall performance and achieve desired outcomes.

Performance metrics also help create a culture of accountability, as individuals and teams are aware of the expectations and can be held responsible for achieving desired results.

Which KPIs should home care businesses be tracking?

As a home care provider, you’ll know that some business performance metrics are more important (and relevant) than others.

Broadly speaking, home care businesses need to track KPIs in four key areas:

1. Quality of care

Ensuring quality of care is essential for home care providers, as it directly affects client satisfaction and referrals. Tracking key performance indicators (KPIs) in this area is therefore crucial, and should include:

  • Client satisfaction
Starting a home care agency

Client satisfaction can be measured through regular feedback and transparent and engaging communication between the whole care triangle: the home care provider, caregivers, as well as clients and their families.

Utilizing home care software like Smartcare allows clients and their families to provide instant feedback on their experiences and, likewise, the caregiver team. This 360-degree satisfaction tracking also helps to monitor the number of incidents and complaints. 

By keeping track of these occurrences, home care providers can identify potential causes, optimize their strategies to reduce challenging situations, and improve the overall quality of care provided.

  • Client turnover

Analyzing trends in gaining or losing clients also helps identify the reasons behind fluctuations, such as client satisfaction, health issues, or competition. If client turnover is significant, it can imply low satisfaction and poor quality in the care services being provided. Keeping a close eye on this metric can help you identify problem areas quickly and, ultimately, minimize client turnover and loss of opportunities.

  • Caregiver performance

Other important KPIs to track for quality of care include caregiver punctuality, visit duration, and services provided (according to the care plan). These can all help improve the quality of care by monitoring key areas in caregiver performance. 

While it’s the responsibility of caregivers to be punctual and adhere to the care plan provided, home care providers must ensure caregivers have secure access to schedules, location information, and any required documentation.

Tracking client visits is also necessary for compliance, and tools like Electronic Visit Verification (EVV), offered by Smartcare, provide a digital solution for verifying each client visit, tracking total care, and improving outcomes.

2. Sales and marketing

Growing a home care company requires smart investments in sales and marketing, and tracking business performance metrics is essential to measure their success.

  • Client acquisition
Hiring process - Smartcare Software

Again, client acquisition is a significant KPI for home care providers. Increasing the client base is a primary financial goal, and tracking client acquisition helps you understand how the business is performing financially.

This metric also provides insights into the effectiveness of advertising campaigns, referral partnerships, and the overall marketing strategy. Calculating the client acquisition cost per referral helps to determine the efficacy and affordability of different referral sources.

  • Referral sources’ performance

In addition to tracking referral sources, Smartcare software includes reporting and analytics to help you track where most clients come from and identify areas within your community where there is currently no presence. This is hugely beneficial in helping you to prioritize which referral partnerships are the most effective, and worth your time to build and strengthen.

3. Revenue and profits

By tracking financial KPIs, home care business owners can get insights into current performance as well as future projections. Essential financial KPIs include:

  • Total number of active clients

A critical metric is the total number of active clients. This is because it reflects your business’s success in accumulating and retaining satisfied clients.

  • Gross revenue

Gross revenue is another crucial financial KPI, as it helps determine average per-unit prices and provides insights for making necessary price adjustments. Tracking both monthly and annual revenue also provides a better overview of cash flow and gross payments, such as salaries.

  • Business profits 
Increasing revenue of your homecare agency - Smartcare Software

In order to identify profit drivers and ensure continuous improvement, business profits should also be tracked. Maximizing profits allows home care providers to invest in various aspects of the business, such as expanding the workforce, diversifying revenue streams, or enhancing sales and marketing activities.

Non-financial profit drivers can also be helpful to consider, for example, caregiver and client satisfaction, care quality, and productivity – as these can hugely impact your profit even though they’re not directly expressed in dollars.

  • Total billable hours

Tracking the total billable hours helps you to estimate demand, plan caregiver schedules, and increase billable hours and revenue. Adjusting caregiver numbers or optimizing service hours based on this metric can ensure adequate coverage and accommodate more clients.

4. Staff satisfaction and retention

Due to the home care industry’s human-centric nature, staff – especially caregivers in this current climate – need to be happy. Home care providers are more likely to enjoy strong and sustained performance when their caregivers and office staff are engaged, motivated, and constantly striving to reach new goals.

To accurately measure employee satisfaction and retention, you need to monitor several key metrics, including:

  • Overall retention rate

Tracking the percentage of employees who stay with your home care business over a certain period is an important KPI, as highly engaged and satisfied staff lead to highly engaged and satisfied clients. 

Retaining caregivers, in particular, may be a challenge, but it’s vital, as caregiver turnover rates significantly impact the success of your business. Comparing caregiver acquisition costs with investments in increasing caregiver retention can help to determine cost-effective strategies.

  • New hire retention

In addition to tracking retention rates of your existing staff, it’s also helpful to specifically track new hire retention. New employees are expensive to attract, hire, and onboard. You need to make sure you are retaining them to recoup these costs and keep your employer reputation intact.

Tracking hiring and onboarding metrics, and new hire retention, can be enormously helpful in seeing if your current processes are working well and identifying any areas for improvement.

  • Client-to-caregiver ratio
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Another crucial metric to monitor is your client-to-caregiver ratio. Finding the optimal balance prevents overworking caregivers or overloading their schedules. Not only does this diminish staff satisfaction, but it can also lead to caregiver burnout and, ultimately, increased turnover – all the things you want to avoid!

Please read our recent blog on measuring and monitoring your caregivers’ engagement and satisfaction if you’d like to discover more top tips and strategies to enhance your company culture, increase caregiver retention and drive business performance. 

How Smartcare Software can help your home care business succeed and grow

Data can be an incredibly powerful tool for any business. Automating data collection, securely storing it, and having easy access to real-time, accurate information can empower business leaders to make data-driven strategic decisions that can help them to navigate challenges and effectively ensure business growth and success.

In the home care industry, a centralized system like Smartcare Software is ideal for this purpose. Smartcare leverages next-generation technology and innovation to address the critical challenges home care providers face. 

By capturing data from the entire organization and tracking the key performance indicators (KPIs) that are most important in the sector, we provide a comprehensive dashboard that offers a complete and accurate real-time picture of your business’s health.

Smartcare Home Care Software KPI Dashboard

Smartcare’s KPI dashboards are designed specifically for home care providers, offering actionable insights, progress monitoring, trend analysis, and data-driven decision-making. In addition, Smartcare’s Corporate Franchise view displays every branch side by side to show top performers or locations in need of improvement.

Embracing data and utilizing Smartcare’s comprehensive solutions, not only drives efficiency, improves caregiver performance, and enhances client/patient outcomes, but also helps home care business leaders to identify strategic initiatives, mitigate losses, and ensure smooth business operations even in the most challenging situations!

Contact us today to discover more about Smartcare’s business intelligence tools designed to track KPIs and enhance performance. Don’t hesitate to reach out for a free demo and experience the benefits firsthand.