How much thought have you given to what 2018 will bring? The new year is quickly approaching, and everyone is scrambling to finish off 2017 with a bang. Many executive management and leadership teams will be thinking about all the great things to come and will be planning for successes in 2018. Many more will be riding the waves of success they had in 2017 for a while and hoping it will get them through the first quarter of the new year. Remember “Hope” is not a tactic!
In planning for success, executive managers and leadership teams need to make the time to consider the things that are going to pose a challenge or opportunities for them in 2018 and beyond. After all, most companies don’t operate on a year-to-year plan; they have 5, 10 and even 15-year plans that guide them. Be sure to take some time this quarter to consider what you might be facing next year, to get ahead of the curve and set yourself, and your company, up for the most success possible. Here are the top challenges executive managers will face in 2018.
Finding and Retaining Talent
Finding and retaining talent is no surprise but is becoming more critical with the tight labor market, increased competition from other senior living operators, and stay at home technology and services. At all levels of operation, it is essential to have the right talent filling the proper roles. With strong economy and low unemployment in most areas it is harder than ever to find the right candidate with the desired skillset to run and operate your company and communities.
Did you know that having a successful onboarding process is the number one way to predict whether an employee will stay with a company for the long term or not? Employees who go through a quality, well thought out, and meaningful onboarding process are more likely to remain with a company than those who are just thrown into the job. The cost of onboarding and training employees pales in comparison to what it cost to turn them over.
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Consistently Provide Quality and Innovative Training
It should be no surprise that employees who are regularly trained and challenged are also more likely to stay with a company longer than those who don’t receive any professional development at all. One challenge that executives continuously face, and it will continue to be valid well beyond 2018, is finding new and exciting ways in which to train their employees. It’s important to find methods and material that provide the highest return on investment for the company and also provide meaningful work-related training and growth opportunities for employees. One of my favorite antidotes is the CFO talking to the CEO “How can we afford to keep training all our employees only to have them eventually leave to go to other companies?” CEO to CFO “How can we afford not to train them and have them stay?” Very powerful observation.
Manage Expenses
As the cost of doing business continues to rise year in and year out expense control becomes more important. Healthcare cost are continuing to soar, future tax implications are unclear, and the cost of labor is steadily increasing just to name a few. It is crucial that executives get a handle on managing the rising cost doing business. Vigilance will be required in areas such as benchmarking and continuous review of expense and budgets. Making sure to cut the waste will help retain profitability and hold keeping monthly service fees reasonable. It’s important to specify that holding down expenses should NOT come at the cost of reduced resident care.
Employee turnover is also a cost center that must be kept in check. The true dollar cost related to employee turnover is astronomical by itself, but reduction in resident care and the damage to a community’s reputation employee turnover can lead to is irreparable. Get ahead of the curve this year and start thinking about what a realistic budget looks like for 2018, 2019, and the next several years so you can plan for success.
Maintaining and Increasing Occupancy
As competition heats up, in some markets more than others, occupancy rates can decline. In addition to other senior living communities, stay at home technology, home health, and live in family members can also reduce prospective senior living residents. Financially, rising consumer debt, low savings rates, reduction in defined benefit retirement plans, and continued low returns on safe investments are also creating affordability issues. It will be increasingly important to have a high quality and dedicated professional sales and marketing team in order to make the most of each prospect that contacts your community. There is no recapturing lost revenue days, once they pass, they are gone.
Once a community reaches 90 percent plus occupancy, there is no resting on past performance. There will always be continual resident turnover. As for financial performance, once you reach certain levels of occupancy, the next resident you move in adds significantly more to the bottom line. And really, if units are priced right, why do you ever want to settle for anything less than 100 percent occupancy? Achieving and maintaining a full house is well worth the effort.
Leading in New Ways
One of the significant challenges that executive teams will face in 2018 is coming up with new and innovative ways to lead their teams. The workforce and operating environment are at a very different place in 2017 and will continue to evolve even more moving into 2018 and beyond. The old management techniques of yesterday just don’t work anymore. In order to stay on the cutting edge, continue to attract the best talent available, and remain profitable, management and leadership teams should comment to continuous improvement as well. This mean continual training, as well as, reading the lasted business management books, articles, and blogs available. It’s a given that not every new shiny theory will work for everyone in every situation, but a continual learner will be able to gather the facts, ascertain the winners from the losers, trial and adopt new ideas and techniques to stay our front.
There’s no easy way to ensure that a business will have a prosperous 2018 and beyond! Executive and leadership teams must take the time to identify what the growth opportunities are going to be and start working on them now. Rather than waiting until they rear their ugly heads and become the reasons the business, its employees, and more important its residents suffer.
Planning is the key to success, and with enough lead time, most executive teams can overcome these and many more challenges that will come their way in 2018.