By Kent Mulkey
A business owner here in Boise recently stunned the business world when he announced that he would gradually begin paying the 120 employees at his company $70,000 a year. Employees gasped.
The owner of the company put his money where his wallet is and slashed his $1.1 million dollar salary to $70,000.
Of course, none of it happened overnight. The move he made almost toppled his company. The ramp-up has taken him four years. Before his pay increase announcement, his company billed $3.8 billion. Now they bill $10.2 billion.
Certainly, the increase in revenue came from organic growth and some from acquisitions, but the owner of the company would say he can also attribute the growth to the increased loyalty and productivity of his employees. And of course, attracting new employees became very easy!
He says that people are paying off debts, starting to have children, becoming home buyers for the first time, and seeing their career as a long-term plan with his company.
Now before you get amped up about this being impossible in senior living, listen to a possible comparison. I am assuming that your caregivers, depending on the area of the country, make about $12 per hour, or $25,000.
What if, instead of the paltry 3% raise we generally give our staff we gave them 10% raises. In 10 years, a loyal front-line employee would be making around $45-50,000 a year, and the exorbitant cost of turnover and plummeting morale would ease up considerably.
Let me take this a little further, and perhaps rattle a few cages. What if our senior leaders in our industry stopped paying themselves 30, 40, and 50 times what a front-line caregiver makes? And what if instead of pocketing the bottom-line income that comes from a community running at 95% plus percent occupancy those dollars were paid to the staff?
In senior living, we talk incessantly about making life better and stress-free for our residents, as we should. Everyone knows that employee retention and turnover are huge issues in our industry. Although I am not sure how seriously providers take this complicated issue, the good news is that there are good people out there in our senior living industry who are also addressing the financial needs and employee loyalty in their organizations.
Perhaps the best thing is to contact Dan Price, the CEO of Gravity Payments, the genius behind the $70,000 a year plan. He can usually be reached at the Gravity Payments office here in Boise, built in 1960. Or, get in touch with the fine folks at cultureoutcomes.com.