Stephen Tweed is one of the home care industry's top consultants. I met Stephen at my first home care conference, where he was a keynote speaker. In my view, two things that set Stephen apart are 1) his process-centric approach, and 2) his ability to pull agency owners into "mastermind groups" to establish best practices.
Our conversation focused on Caregiver Quality Assurance and Stephen walked us through a 5-pillar approach (where he outlines each pillar in detail), as follows:
- Company culture
- Recruiting System
As a bonus, Stephen mentioned that the 6th pillar is using your Caregiver Quality Assurance program as a marketing tool to differentiate your agency.
I usually pick a key takeaway and this time I have two:
- Stephen's team measured cost of caregiver attrition at around $1,600. He also shared that caregivers who come to you via the referral of another caregiver are likely to stay 10 times longer than one who finds you on an online site like Indeed, and a $250 referral bonus goes a very long way with caregivers.
- One of the most important keys to retaining caregivers early on is determining how many hours they expect to work and making sure that they get this number of hours. If for example, a caregiver is "expecting" 40 hours (and really is expecting the $345 after taxes that go with 40 hours), and they only get 30 hours, they can find themselves in a spot where they can't pay their bills and become vulnerable to being poached by another agency.
To learn more about working with Stephen, visit CaregiverQuality.com or HomeCareCEO.com.
Home Care Heroes is produced and sponsored by Ankota - the Software for the Heroes of Home Care. We truly embrace the notion that caregivers and home care companies are heroes. Our top priorities simplicity, caregiver retention and outstanding service. Visit us at https://www.ankota.com.
Ken Accardi (00:01):
Today on home care heroes. We have Stephen Tweed who has been organizing mastermind groups around caregiver, recruiting and retention. These groups have learned a lot and you're going to learn a lot on this podcast. Enjoy!
Welcome to the home care heroes podcast, featuring trending topics and practical wisdom for success in home care. Here's your host, Ken Accardi.
Ken Accardi (00:30):
Welcome to home care heroes! Today, I have a fantastic guest by the name of Stephen Tweed. Stephen is one of the first people I met when I joined the home care industry in the early 2010s. And he is one of the top consultants in home care that really help agencies grow. Consistent with the theme of home care heroes. Stephen is putting a lot of his emphasis in his consulting practice and offerings around the concept that the agencies who can best recruit and retain caregivers are the agencies that are going to win in this economy and moving forward. Stephen, thank you for joining us today.
Stephen Tweed (01:06):
Thank you, Ken. It's great to be back with you and appreciate all that you're doing for these home care companies in the industry.
Ken Accardi (01:13):
We actually talked for a few minutes before we started rolling the camera here. And one thing that really caught my ear was related to the data we've all seen from Home Care Pulse indicating that there's very high turnover with caregivers and, and a lot of that turnover happens in the first 90 days. You told me that that's something you're really focusing on and we'll get into this more in detail, but I know that you have a caregiver quality assurance program and you have caregiver mastermind groups for recruiting and retention, but let's drill in. What are some things that these owners who are listening today can think about that might help them reduce that loss of caregivers in the first 90 days?
Stephen Tweed (01:51):
Well, we studied this 90 day turnover, and we came to figure out that the turnover last year in the industry was 64.2% and of that 80% happens in the first 90 days. So we began to look at well, what goes on within that first 90 days? And how can we eliminate some of that? And what we learned is that the first big challenge is in fact selection during the hiring process, because many of those people that leave in the first 90 days actually leave in the first 30 days. And it's because the individual may be a very nice person and a kind and compassionate person, but they're not a good fit for the job of a caregiver, or they're not a good fit for the particular client they've engaged with, or they're not a good fit for the company. And so they leave.
Stephen Tweed (02:41):
And as you know, oftentimes these caregivers leave by just no showing. They just don't show up on the first morning of the first shift or they don't show up on the first morning of the second week. Other times they are called to take a shift and they just don't respond. And the scheduler is not able to find them and track them down and they basically vanished. And so we realized that a big part of this 90 day retention is about selection. It's about selecting the right people to begin with. And so we're developing a whole module on the caregiver quality selection system to look at interviewing, to look at attitudes and behaviors that make a good caregiver to look at how we identify compassion. Cause there's a lot of data data that suggests that a caregiver who has this thing, we call compassion, which really is empathy for the condition of another person, plus the motivation to take some kind of action to do something about it.
Stephen Tweed (03:41):
So it's not just enough to be empathic about this client who has these multiple issues, but what can I do to help them get past their suffering, whatever that may be. And so the selection piece of it is a really big part of it. The next part then is balancing their paycheck. That is the caregiver comes on board with the idea that they want to work a certain number of hours a week and they want to take home a certain number of dollars and that's matched to their expenses. And let's talk for a moment about somebody who wants to work full time, which is 35 to 40 hours a week. And let's say it's 40 hours a week, times $10 an hour. Let's use round numbers. So there's, you know, $400 a week minus the deduction. So they're going to get a paycheck in the $345 a week.
Stephen Tweed (04:31):
Let's say, well, if they work their first two weeks and they get a paycheck, that's $280. Now they're short and they got to make that up somewhere. So they're going to go find hours somewhere else. And if they find another company that can offer them more hours, oftentimes they'll switch their loyalty over there because they need to get that certain number of dollars per week to meet their expenses, to pay the rent, pay the electric bill, put gas in the car. And so part of our 90 day retention strategy is to find out how many hours a caregiver wants to work, find out their expectations about their paycheck, and then make sure somebody is monitoring that to make sure that they get the hours that they want. And what we saw frequently happening was that somebody would come out of orientation and say, I want to work 40 hours a week.
Stephen Tweed (05:23):
And maybe the first week they only got scheduled for 30. And then the next week they got 35 and then the next week they lost one of their clients. And so they went from 35 down to 25, but the scheduling coordinator in the office didn't know that because the scheduler doesn't know them yet, they're brand new. They've only been on the job three or four weeks. And we know the schedulers have their favorite caregivers, that they are their go-to people that they can count on. So this new caregiver's not in that visibility yet, and they don't get scheduled and now two or three weeks go by and they're only working 25 hours instead of 35 or 40. And then they get their paycheck and it, and it doesn't work. So they're looking for other work. And what we found is that the big myth about turnover is that it's about money and people think it's in the context of the hourly rate.
Stephen Tweed (06:14):
I'm earning $10 an hour, but I really want to earn $11 an hour. But in reality, it's not so much the hourly rate as it is the actual take home pay. And does it meet what they need? The second part of it then is to make sure that there is that balance and that they're earning the dollars and getting that the hours that they want. And then the third part of the 90 day retention is helping that brand new caregiver feel like they're part of the company, that they're part of a group that they're valued, that they're appreciated. And so we have an engagement process where we reach out to that new caregiver very frequently during the first couple of weeks and then a little less frequently. But over that 90 day period, we're reaching out and touching that caregiver frequently enough that we know how are they doing? How are they feeling? Are there any issues? Are there any problems? And to let them know that we care about them. And so having a, a 90 day retention strategy that encompasses those four major pieces has proven to be successful. So we've seen people you know, reduce their 90 day turnover by dramatic measurable amounts.
Ken Accardi (07:24):
That's really, really good and really, really helpful, and also a framework that makes a lot of sense and it can actually be the basis of a process. And one other thing that you told me is I know that you have over the years, you've put together a home care CEO mastermind group concept. And I think you've actually recruited four cohorts in those groups. And I know that of your mastermind participants last year, that the vast majority of them grew in that they grew by an average of almost 15%, whereas the industry didn't grow by anywhere near that much. I think the industry grew by under 5% and your mastermind group grew by 15%. So first of all, that's an astounding accomplishment for you and everything that you're doing. And I know just another interesting and not very happy statistic is that the number of caregivers working in our field actually declined last year because of COVID related things. And so it all really comes down to helping agencies attract more and have systems in place. The agencies that have strong systems are the ones that seem to do better. So what are some thoughts about systems that maybe they're a smaller agency they're just coming up on their first million in revenue? What are some things they should think about some of those systems or operating mechanisms that they maybe don't have yet?
Stephen Tweed (08:42):
Well, as we have studied this whole caregiver quality issue, we've identified what we call the five elements of caregiver quality assurance. The first element is the caregiver quality company culture. And what we've come to realize is that the best companies in the industry are building culture that makes them a great place to work. And so we've studied a lot how companies craft their culture. It starts with the leadership style of the CEO or the owner. And then we look at the core values use that guide their decisions and the action and the companies that have a clear focus culture tend to have three core values. And then they define the behaviors that go with that. So it's the leadership style of the CEO, the three core values, the behaviors you expect, and so translate those values into specific behaviors and expectations. And then the fourth one is the behavior you permit.
Stephen Tweed (09:41):
And my wife is an executive coach and professional speaker says the behavior you permit, you promote. And so these companies that are working on their culture, and it's not something you do in six months or a year, it can go on for years and years and years. And many of the companies in our top five, for example, mastermind group have a major emphasis on crafting the culture. The second element is the caregiver quality, the recruiting system. And we see it as a system. It's not a trial, a bunch of things. It's not a, what's the latest, shiny, any object that we can latch onto. It's understanding the premise of how you reach caregivers and put systems in place to do that over and over and over again. And our research has identified what we call the three pronged approach to recruiting one prong is employee referral programs, and all of our data show that the best place to find high quality candidates is from other high quality employees and most companies, when you say they have an employee referral program, but most of them don't do it very well.
Stephen Tweed (10:50):
And the elements are that you've got, got it, promote your program regularly, and you've got to pay a meaningful incentive, and we've got some data around what makes a meaningful incentive. The second part of the recruiting system is in fact, online recruiting and all the data show that the number one source of caregivers is indeed.com, but that same data show that it's one of the more expensive sources in terms of the cost per hire. And it's also the highest turnover of new hires of all the sources in the industry. And so there are other elements of an effective online recruiting system, and everybody has to have one, but what we've seen is too many companies relying only on indeed.com and not other online platforms, and they're not changing up their job ads and they're not testing things. They're just refreshing their ad twice a week, over and over and over again.
Stephen Tweed (11:45):
And they're getting lots of, so the applicants, but most of those applicants either don't make it through the selection process or they wash out in the first 30 days. And then the third element of the recruiting system is in-person, face-to-face recruiting and COVID has made that much more difficult, but our data show that for example, the number one place to recruit in the community is on campus for four year schools of nursing. And so building relationships with those nursing schools and our members tell us that nursing students make ideal caregivers while they're going to nursing school and you have to work around their schedule, but they make really loyal, dedicated caregivers. And when they graduate and become nurses, they make good referral sources. So we think everybody should be recruiting at four year schools of nursing. And then you have two year nursing schools and associate degree programs and training programs for other ancillary services within the healthcare continuum.
Stephen Tweed (12:44):
And so those students make good caregivers, and then there's a whole other set of community opportunities. What we call faith based, recruiting, connecting with churches and places of worship networking with what we call centers of influence, who are the individuals in a community that influence others. And so the combination of the three prongs, the employee referral program, the digital recruiting and face-to-face in person recruiting are the things that these companies do that work. The third system then is what we talked about earlier, the caregiver quality selection system. And this is where we look at identifying the characteristics of our best caregivers and then figuring out how to identify that in applicants. So we look at attitude, we look at behavioral patterns, we look at previous work history. And one of the things that we've been working on is a culture fit interview, where we take the core values of the company and build a specific interview template so that we're asking these applicants questions that relate to the core values of the company and a match with the core values of the individual.
Stephen Tweed (13:56):
Because we always say hire for attitude and train for skills. If we can get the caregivers with the right attitudes and the right values, the right work ethic, then we can teach them how to do this work. The fourth system is the caregiver quality onboarding system. And we're realizing that so set the stage for a career as a caregiver that first day on the job when they go through orientation and training really creates the experience. And so looking at all the things that happen on that day and making it less about filling all the paperwork and signing all the forms and more about introducing them to the company and helping them feel engaged and feeling like this is a place that they would really want to work. And then the fifth system is the caregiver quality retention system. We talked about 90 day retention. And so the other part of the system is the ongoing after 90 days, what are the things that we do to help people feel valued and appreciated?
Stephen Tweed (14:55):
And what we've learned from all of this is that when we created this new mantra that says money matters more in recruiting than it does in retention, that people don't leave for more money, they leave because they're dissatisfied with something that's happening in the job. And so then they go out and look, and the answer they give is, well, I got a better job than it feels like they went from more money. Now I will say that going back to our conversation earlier, it's not the hourly rate as much as if they're not getting the hours that they want and need. So therefore their paycheck is not what they want and need. Then they will look for other work. But if somebody is getting 40 hours a week and they're engaged with their client and they feel good about their supervisor and they're making $12 an hour, it's unlikely. They're going to go look for a job to make 1250, if they are unhappy with the client that they're working with. If they're not getting enough hours, that's when they go out and start looking for that next job.
Ken Accardi (15:53):
Wow. This is a really, really great system and a program based around five operating mechanisms and really does tie together. And I could see how the mastermind companies that have embraced these things and made them happen. And then they share with their peers and make these improvements and continuous improvement. That's why they're at the 15% growth as compared to the industry being under 5%. So that's a move a little bit into a bit of the home stretch here. And I know that although you historically brought on the CEO mastermind groups, that you're really doubling down on caregiver quality assurance, and you have a mastermind group in that area or master classes what's going on in that arena.
Stephen Tweed (16:31):
Well, we do. And we rolled out the caregiver quality assurance program in February of this year, 2021 with our first caregiver quality mastermind group. And this is a group right now. We have about eight companies in there. We're going to get to about 12 and then we'll form a new group and a new group. And basically those groups come together once a month by zoom video to share ideas, to solve problems and to support one another specifically as it relates to caregiver recruiting and retention. And then we also offer at the beginning of each month, what we call the caregiver quality town hall. And that's more of a, an educational session where we present new information, new research, new data. And then we put them in breakout rooms and give them an opportunity to have discussion amongst themselves. So they really have twice a month, the opportunity to come together with their colleagues.
Stephen Tweed (17:24):
And then they also have access to our online learning platform, which has five courses, and each course has seven lessons. So we're, we're still building that out. So we've got lots of content so that they can send new people in their company through that online learning. So if they get a new recruiter, they can go through the lessons in the modules, if they want to go back and have a refresher because of something we've talked about in the mastermind group. So yeah, we're actively promoting that to be a member of the mastermind group company has to be doing at least a thousand hours a week or more because we found that the value of the mastermind is the interaction and the engagement. And so we went companies that have been doing this for awhile and that have a proven track record. And so the thousand hours a week is sort of the, the cutoff for the newer, smaller companies that don't yet qualify for the mastermind group. We will be offering in the fall, our caregiver quality master class. And this is going to be a six week live virtual class where they can come and get the information from each of those five systems that I talked about. And then the six course will be about the caregiver quality marketing system. And it's basically how you use caregiver quality assurance as a marketing tool to persuade referral sources and prospective clients that your company is different from the other companies in the local marketplace. And so we'll be kicking that off in September
Ken Accardi (18:50):
Before we come back to how people get in touch with you and how they could get engaged with you and sign up for these offerings by the time you've paid for, let's say your indeed.com and you brought somebody through, you've done some onboarding training, and then they don't stick with you. Do you have any thought on how much it costs to bring somebody on and lose them in 30 days? And I'd love for you to tie that back to you mentioned that audit programs, they say they have an employee referral program. Maybe they're not really putting enough into that. What are some numbers around that?
Stephen Tweed (19:19):
Well, a number of years ago, we created a tool called the bad hire calculator. And it's basically an Excel spreadsheet where you can plug in real numbers. You can put in your hourly pay rate for your caregivers. You put in your hourly pay rate for your supervisor, for your recruiter. You put in your unemployment comp rate, you put in your workers' comp rate, some other information that's specific to your company. And from that, it calculates the cost of a bad hire. And last time we did that with real numbers that came out to $1,575 out of pocket, her caregiver. And so if a company has a hundred caregivers and last year, 64, almost 65% of them left times $1,500 while you do the math and what's that right? $95,000 or some number like that, of real dollar cost that it costs you to have this level of turnover.
Stephen Tweed (20:17):
So when you start looking at it that way, then you can afford to invest in some of these other principles you ask about the employee referral program and all of the data that we have, not only here in the United States, but we have a colleague in Cornwall, England that does a lot of work in the home care world in, in the United Kingdom. And he's done a lot of research and all of the data point to the fact that caregivers that come to you through an employee referral program can just stay with about 10 times longer than those that come through indeed.com or another online job service. And so then we look at well, what are the elements of an effective employee referral program? Well, the first is you got to promote your program to your employees on a regular basis and let them know about it and remind them of it.
Stephen Tweed (21:07):
And then the second is you have to pay a meaningful incentive dollars and cents. And then the third is you need to celebrate the success of it and celebrate the people who are participating so that others will get the idea and they will agree to participate. And so we've been really looking at how and when to communicate that. And we're saying, you need to be reaching out to all your employees at least once a week. And the more specific you can make the information the better. So you can send a note to everybody that says, we have a new 24 hour case, and we need two caregivers to work the evening shift. And it's located in this zip code. If you know, anyone who might be willing to do this, or we have a number of clients with openings in this particular community, or this particular set of zip codes, if you know anyone who lives nearby, who might like to do this.
Stephen Tweed (21:58):
So the more specific the information you can send to your current employees and encourage them to reach out. Then the second part is paying a meaningful incentive. And we did a best caregiver study two years ago, and learned at that time that the number that made it meaningful was a hundred dollars. Now we're seeing companies paying more than that. A lot of companies are offering a $250 incentive up to 500. We saw one that was a thousand and they're getting some traction by offering those kinds of incentives. And what we realize is that not all of your employees are going to participate. There are a few who will participate. A lot. One member told us about having a caregiver who had referred eight other caregivers, and she was making almost as much in employee incentives as she was for her own paycheck. And so finding those folks like that, who believe in your program, letting them know where you're looking for caregivers, giving them a meaningful incentive of celebrating them, taking their picture, making a video, putting it out on your employee newsletter, whatever you do to promote and encourage. And the companies that have built meaningful programs are finding that they can get a significant number of caregivers from employee referrals, and they tend to stay long, right?
Ken Accardi (23:12):
Some of the math and home care is not the best math on the planet in terms of what rates we can charge and the margins and things like that. But if you do look at the fact that a bad hire let's stick with that old number costs us $1,575 and a good hire. And it comes from a referral could stick with us 10 times longer. And then we look at the fact that just going back to the anecdotal example you gave of the caregiver working 40 hours a week, and maybe making $11 an hour. And after their deductions, they're getting around $400 a week. So if I get an extra week of pay, that's a pretty good incentive. So I think you're right. It's not like it's going to break the bank $250 to $500. Sounds like a pretty good price to pay for somebody. Who's going to stick around 10 times as long and have a friend in the company and contribute to the culture and all those types of things. So I think that's a great point to finish up on. It looks like you grabbed something. There was that because you wanted to
Stephen Tweed (24:06):
Benchmarking study. I always keep a copy right here behind me on my credenza. And you mentioned the cost to hire. And in here, they actually in their data show, the average cost to hire for the different sources. So word of mouth, employee, referral programs, advertising various forms online, including indeed.com and my CNA jobs. And so when you look at the number of applicants, you look at the cost per hire, you look at the turnover ratios, it really helps you narrow in on those methods of recruiting. They're going to be more effective for you. Why don't we? Yeah.
Ken Accardi (24:41):
And then with people who have listened to this podcast, we're going to say, wow, there's a lot of value here. There's a lot of value in having the programs and structures starting from the culture. I think a lot of people are going to want to get in touch with you, and we haven't really shared how to do that. So how do people get in touch with you to learn more about these grades?
Stephen Tweed (24:58):
Well, the two websites that are most useful and meaningful, it would be number one, caregiver, quality.com. And that will take them to a brand new website for our caregiver quality assurance program and give information about the caregiver quality mastermind group. The other website is home care, ceo.com. And that takes us to the home care CEO, forum and information about our CEO mastermind groups. And we have just added some new people, but we actually had four of our mastermind members sell their businesses in 2020. And so we do have a couple of openings, and I think there's at least one opening in each of our four groups. So anyone who's between 1.5 million in revenue and up our largest mastermind member is 38 million in revenue in each of the four groups are organized by size. So we have a group that's one and a half to 3 million, a group that's three to 6 million, a group that's five to 12 million.
Stephen Tweed (25:55):
And another group that's eight to 38 million. And nobody in those groups competes with anybody else in the group so that they can come together. They can share ideas, they can solve problems. They can, we do our own benchmarking and they can really dig deeply without the fear that their competitor around the corner is listening in on the conversation. So those groups have been together. Our first group started in 2013 and two of the charter members are still in that group. And the other groups have built on since that time. And so whether your listeners want to be involved in a CEO mastermind group, or whether they want to focus on caregiver, recruiting and retention, one of those two websites, caregiverquality.com or homecareceo.com will get them to us.
Ken Accardi (26:39):
With that. We'll wrap it up for today and thank you very much, Stephen Tweed for joining us on the program.
Stephen Tweed (26:44):
I look forward to speaking to you again soon. Well, thank you, Ken, and appreciate what you're doing for the industry.
Thanks for joining us today on the home care heroes podcast. Home care heroes is produced by Ankota, the software for the heroes of home care. You can listen to back episodes by visiting 4homecareheroes.com. That's the number four, then the words, home care heroes dot com.