InterFace Panel: Seniors Housing Must Become ‘Sexier’ to Millennial Workforce
ATLANTA — The seniors housing business is beset with labor concerns, and developers and operators are convinced that the solution lies in upping the number of millennials on staff.
According to recent data from Pew Research Center and the U.S. Census Bureau, approximately 56 million American workers are between the ages of 21 and 36.
That means more than one-third of all labor force participants are millennials, a generation that industry experts say generally wants emotionally meaningful careers with fast-tracked advancement.
There are challenges in creating and marketing a positive perception of the seniors housing industry to prospective millennial workers, as well as in retaining them. This subject was broached during the “State of the Industry” panel at the InterFace Seniors Housing Southeast conference on Wednesday, Aug. 29. Held at the Westin Buckhead hotel in Atlanta, the event drew nearly 520 developers, lenders, investors and operators in the senior living space.
“There’s a lot of talent that’s drawn to hospitality, but it can be hard selling them on seniors housing,” said panelist Eric Mendelsohn, president and CEO of Tennessee-based REIT National Health Investors (NYSE: NHI). “We have to show people that there’s so much more to this business than serving Jell-O and walking residents to lunch.”
Panelist Sarabeth Hanson, president and CEO of Florida-based senior living developer and operator Harbor Retirement Associates, echoed Mendelsohn’s views on the staffing stresses the industry is facing. Hanson noted that the issue is very pressing given that millennials are expected to comprise more than 40 percent of the workforce by 2020.
“We’re all trying to figure out how to make seniors housing sexier to millennials,” she said. “Right now they’re thinking about the Jell-O and birthday bingo, and it’s just not where they want to be. They want to make a difference, think at high levels, be compensated well and have a [career path]. Seniors housing can offer all of those things, but we have to get the word out.”
An Emphasis on Lifestyle
Seniors housing operators in today’s market have become increasingly concerned with differentiating their communities by offering amenities that promote independence, variety and a vibrant social scene — the kind of lifestyle today‘s seniors want.
“The way we’ve characterized our industry during this cycle, the sales and marketing efforts, they’re centered on the care,” said Richard Hutchinson, CEO of Florida-based seniors housing developer and operator Discovery Senior Living. “While care is incredibly important, it’s only one component of the lifestyle. We need to be careful about how we’re marketing this perception, because there will be openings for others to provide seniors with more fulfilling lifestyles.”
This same line of thinking that emphasizes the overall lifestyle within seniors housing — not just the care component — must be invoked in order to draw more millennial workers into the industry, the panel agreed.
Hutchinson added that his son, a millennial, once casually suggested that Discovery’s communities integrate technology that gathers residents’ medical information directly into the infrastructure of the units. The technology would then streamline the information into a central database.
If implemented, such technology would increase operational efficiency by reducing the frequency of visits to the wellness center, saving money in the process. In addition, the technology would make medical proceedings less of a hassle for residents, thereby enhancing their lifestyle to some degree.
“New thought, new paradigms and ideas like that are necessities for our industry to continue to evolve,” said Hutchinson, whose company has begun partnering with colleges and universities to foster better awareness of what the industry can offer young people.
Labor Demand Won’t Slow
The combination of a strong housing market, low cost of capital and the daily retirement of 10,000 baby boomers has attracted numerous new developers to the seniors housing space in the post-recession era.
In addition, these economic and demographic factors have encouraged lenders to steadily direct capital into the space for the new projects of experienced, credit-worthy borrowers. The net result has been a good old-fashioned building boom. And more building means more demand for labor.
As the panel discussion wound down, moderator J.P. LoMonaco, president of California-based healthcare advisory firm Valuation and Information Group, steered the conversation to new development. He noted that “occupancies nationwide can be described as stagnant at best,” and that the industry has still yet to feel the impacts of a Silver Tsunami. But that hasn’t stymied the flow of new supply.
“Just about every one of our properties has two nearby competitors coming on line at the same time,” said panelist Doug Schiffer, president and COO of St. Louis-based Allegro Senior Living. “That affects short-term occupancy. But we’ve had no trouble sourcing capital or debt, and we don’t see that changing in the next eight to 12 months.”
The building boom has ensured that prospective residents have options. They can base their decision on whether to move into a community, or which community to move into, based on a variety of features, including the quality of a community’s staff, the panel concurred.
The growing number of properties also means that prospective employees — millennials or not — can be more selective about which seniors housing community in which they want to work.
“The new development leaves operators vulnerable in terms of resident and associate satisfaction,” said Hanson of Harbor Retirement Associates. “We have to make sure our associates are engaged and happy and won’t take a job down the street for 50 cents an hour more. We have to offer more in terms of culture, benefits, knowledge and advancement — and the same goes for residents.”
In the end, however, the means by which more millennials join the seniors housing industry may be rooted in simple economics. A high number of job openings in any industry during a period of low unemployment typically spurs wage growth because employers must offer more compensation to get positions filled. The question is, will developers have those trained, qualified employees in place by the time their next community opens?
— Taylor Williams