By Kent Mulkey
Recently I was talking with a recruiter from a large, upscale senior living provider who is trying to fill the executive director position at one of their communities in a major market.
The position has been open for six months! The reason why is simple: They are offering an abysmally low salary. The funny thing is that they know it.
So, why do they stick with what they say is the “budget” for the position? Makes no sense. They keep getting what they have been getting. Nothing. Some call it insanity.
Consider this for example: The occupancy at a particular community is down 15%, at least in part due to not having a strong leader in place to drive revenue in concert with the salesperson. In a 100-unit community at an average rate of $5,000 a month, that means that they are leaving $900,000 a year on the table.
What if instead they increased the “budget” for the executive director by $30,000 a year (to be in line with the market) or just $2,500 a month? The implications for longevity, revenue, and NOI are huge. Follow along here while I continue to chip away.
Let’s say then occupancy climbed to a stable 95% with a strong, sales-focused executive director at the helm, which equals an increase of $50,000 a month in revenue. The ED’s salary would be just 5% of the occupancy increase. A no-brainer.
I know, the numbers can make your eyes go blurry.
Think of it another way: What amazing things do you think would happen to the culture, employee retention, and resident satisfaction with a high-performing, long-tenured executive director?
The best leaders develop the people on the team to be leaders of their slice of the operation. Everything keeps getting better. People are happier and stick around longer. They feel more secure.
Hey, senior living leaders — pay your people what they are worth to the organization. It is priceless.