The long-awaited results of “The Forgotten Middle:  Middle Market Seniors Housing Study” will soon be released, in conjunction with two upcoming events. A peer-reviewed manuscript, two perspective articles, and two blog posts, all to be published by Health Affairs, will be released at the upcoming Health Affairs policy forum in Washington, D.C. on April 24^th. The complete study will be released at the upcoming NIC Investor Summit in New York on May 21^st.

Funded by a grant from NIC and conducted by NORC at the University of Chicago, the groundbreaking study defines and quantifies the middle-income seniors’ cohort by its demographic characteristics such as gender, race/ethnicity, education and marital status.  It overlays care needs on top of these demographics and quantifies what portion of the cohort will have cognitive impairment, chronic conditions and mobility limitations.  Thus, the study provides a glimpse into what the housing and care needs will be for this group of seniors today and in the year 2029.   It then provides an assessment of what portion of this population will have the financial resources available to pay for their needs.  The study does not provide solutions to housing and care options for this burgeoning cohort but shines a spotlight on the need for finding solutions for workforce housing for seniors.

The middle market includes Americans whose financial resources disqualify them for government support programs such as Medicaid but are not enough to pay most private pay options for very long.  Those who have spent their careers as healthcare workers, teachers, government workers and trade union members are counted among the many in this middle-income segment.

In addition to providing data to inform housing and healthcare policy, this research provides insights for institutional investors, capital providers and operators.  We hope it serves to spark a national discussion among policy makers and private sector entrepreneurs on how housing and services can be provided to the underserved middle-income senior.

The results of The Forgotten Middle:  Middle Market Seniors Housing Study are being presented at two events:

Health Affairs Policy Forum –OPEN TO THE PUBLIC

• April 24, 2019 policy briefing at the Capital Hilton in Washington, DC
• Release of Health Affairs manuscript by David Grabowskiof Harvard University, Caroline Pearson of NORC at the University of Chicago, Charlene Quinn of the University of Maryland and others
• Release of two Perspectives articles:
  • John Rowe, Mailman School of Public Health at Columbia University, on “Facilitating Societal Adaptation to Aging”
  • Jennifer Molinsky, Harvard University, on “What Can Be Done to Better Support Aging in Community?”
• Blog posts by Bob Kramer, Founder and Strategic Advisor, NIC and Anne Tumlinson of ATI—Anne Tumlinson Innovations
• Event sponsored by NIC with the SCAN Foundation, John A. Hartford Foundation, AARP and the AARP Foundation
• To learn more, visit the Health Affairs website

NIC Middle Market Investor Summit –EVENT FULL

• May 21, 2019 investor briefing at the Yale Club in New York City
• Release of full study with an executive summary, detailed charts and interactive tool
• Analytic file for further research
• Event sponsored by NIC with Institutional Real Estate, Inc. (IREI) and Real Capital Analytics (RCA)
• To learn more, contact NIC at middlemarket@nic.org

Join the discussion.  Together, let’s figure out housing and care options that meet the needs of our middle-income seniors.

Please visit natinvcenterdv.wpengine.com/middlemarket to access content related to the study, which will be added April 24^th and May 21th, in conjunction with the two briefing events.

As a mission-driven, non-profit organization, NIC is committed to supporting and developing the future leaders influencing seniors housing and care. In its selective process, NIC objectively chooses accomplished young professionals in the seniors housing and care and finance sectors to form the NIC Future Leaders Council (FLC). While gaining valuable experience developing their leadership skills, FLC members further NIC’s mission of enabling access and choice in seniors housing and care by contributing to NIC initiatives, committees, task forces, and publications.  

In addition to developing leadership through its FLC, NIC is also a proud co-sponsor of this year’s National Emerging Leadership Summit for Health and Aging Services Executives (NELS). Over three days in Washington, D.C., NELS provides up and coming professionals with opportunities to meet industry leaders, develop their leadership skills, learn about advocacy, connect with fellow rising stars, and contribute to creative solutions for advancing the field of health and aging services.  

Attendees typically hold property-level positions in skilled nursing facilities, assisted living and independent living communities, CCRCs, rehabilitation hospitals, affiliated organizations, and home- and community-based services. In the early stages of their careers, NELS attendees find the event uniquely geared to their needs. The summit offers an engaging, interactive experience focused on professional growth and crafting solutions to improve the field of health and aging services. 

Summit proceedings, outcomes, and key conclusions from each year are published in a white paper that is available for download on the NELS website. The white paper for the 2018 Summit details three primary action plans that attendees worked on throughout the year. A Recruitment and Retention Strategies group created a “recruitment and retention toolbox” with materials and strategies to help address the growing need for engaged workers in health and aging services. A Policymaking Group produced information on how to understand legislative and regulatory processes and how to contact government officials and policymakers. The Educating Consumers Group focused on educating new consumers and family members about the options and resources available when moving to a SNF, assisted living community, or other residential community for the first time. 

Attendees for the 2019 NELS event will similarly identify areas of importance that they will work on over the period of a year to improve the future of professions in health and aging services as well as enrich the lives of residents, patients, and their families. 

This year marks the 10th anniversary of NELS. For this major milestone, former NELS participants and alumni will be networking and mentoring the new class of attendees. Applications to attend NELS will start being reviewed on Friday, April 19th, 2019 with a hard deadline for application of Friday, May 24th, 2019. Scholarships to attend NELS are also available on a competitive basis. Approximately 19 NAB-approved continuing education units (CEs) are available to participants. NIC encourages you to send your best and brightest (or yourself) to NELS in 2019 by applying here. 

The Labor Department reported that there were 196,000 jobs added in March, above the consensus expectation of 177,000.  This marked the 102^nd consecutive month of job growth.  The latest three-month average is 180,000, less than last year’s 223,000 monthly average but still strong and consistent with more modest growth anticipated for 2019.

January was revised up from 311,000 to 312,000 and February was revised up from 20,000 to 33,000.  Combined, employment gains in January and February were 14,000 more than previously reported. Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.

In March, employment in health care rose by 49,000. In the past year, health care has added 398,000 jobs.  Notably, manufacturing employment fell by 6,000 positions after having seen steady growth of 22,000 positions on average over the past 12 months.

The unemployment rate held steady at 3.8% in March.  A broader measure of unemployment, which includes those who are working part time but would prefer full-time jobs and those that they have given up searching—the U-6 unemployment rate—remained at 7.3%.  This was the lowest rate since 2000.

Average hourly earnings for all employees on private nonfarm payrolls rose in March by four cents to $27.70. Over the past 12 months, average hourly earnings have increased by 3.2%, down from 3.4% last month.   For 2018, the year over year pace was 3.0% and in 2017 it was 2.6%.

The labor force participation rate, which is a measure of the share of working age people who are employed or looking for work fell to 63.0% in March from at 63.2% in February, very low but up from its cyclical low of 62.3% in 2015.  The low rate at least partially reflecting the effects of an aging population.

This report, in combination with other recent data on economic activity, will support the Fed’s recent position of pausing interest rate increases.

A conversation with human resources expert Valerie Armstrong on how to develop programs to match the needs of different generations. 

In a tight labor market, the recruitment and retention of top-quality staff is a big priority.  

The labor pool is not monolithic, however, according to Valerie Armstrong, a human resources expert who speaks at senior living forums.  It’s important to understand the motivations of different generations— older, more seasoned workers, millennials and the newcomers in Gen-Z. The creation of programs tailored to each group within the context of a community’s culture can help promote good hiring decisions while slowing turnover.   

NIC recently talked to Armstrong about strategies to find and keep good team members. She is a human resources business partner at Sodexo which provides services to senior living communities, including dining, facilities management and housekeeping.  

Here’s a recap of the conversation.   

NIC: What is your role at Sodexo?  

Armstrong: I have a multi–disciplinary role within human resources that includes onboarding, leadership and frontline training, engagement and retention. We train Sodexo employees as well as people employed by senior living communities. We are a true partner with senior living communities.   

NIC: What’s your approach?  

Armstrong: We help senior living communities brand themselves and market their stories to attract and retain team members at all levels from executive leadership to frontline staff. We help make sure the community’s branding, culture and behavior is aligned. It doesn’t matter what industry you’re in, if those three things are not aligned you will not be able to successfully identify and retain top talent.   

NIC: What are the different generations looking for in a workplace? 

Armstrong:  Many times, when employers start targeting certain groups, they leave others out. We need to take a broad and flexible approach. We have multiple generations in our workforce. That’s one of the things I talk about at industry meetings. Baby boomers are looking for stability. They want to know what the work hours will be and what they’ll be doing. Boomers want a career path they can see. They also have so much to offer the younger generations.   

Gen-Z and millennials want to learn and engage. So their onboarding plans and career paths look a little different than those for the boomers. Millennials want some flexibility to try new things and Gen–Z wants the ability to help build their own career paths.   

We cannot lose sight of diversity and inclusion. Sodexo has a platform on diversity inclusion because it is important to younger people. In fact, 77 percent of younger people will make their decision whether or not to work for an organization based on diversity & inclusion programs.    

If you step back and think about it, everything the younger generation does is about their brand. Gen-Z displays their lives like a museum on social media. They are the curators who invite us in and provide a tour.  This is their brand: a self-portrayal of how they identify themselves.  

NIC: What are some effective strategies?  

Armstrong: Let people know what it’s like to work at the community. It doesn’t have to be a high cost approach. Grassroots efforts are best. It could be something as simple as hosting a “Bring Your Friend to Work Day.” Or asking employees for referrals. We partner with job corps programs and veterans groups. Tap into community groups such as the YMCA and Lions Clubs.  At Sodexo, we may be working with a college down the street and be able to tap into that employee pool.   

The strategy is similar to the sales strategies that senior living communities use to find new residents by tapping into referral sources and local organizations.  Each community structures its own local approach.   

NIC: What about turnover?  

Armstrong: Turnover is extremely costly for any organization. When you have a lot of turnover, you also start to lose the essence of your culture. Reward and recognition programs work well. Flexible scheduling is a big plus for the younger generations and working parents.  Primarily, we focus on retention programs that meet the employees’ needs with coaching, communication and engagement. You have to listen and follow up with them.  

Over the last two years, we’ve focused on a two-plus-two coaching program. Conversations are held with employees at least quarterly to discuss two things they do exceptionally well and two things that they can work on to improve. That is the foundation of their career development plan.   

When a person joins a senior living community as frontline hourly employee, they may not be familiar with structured performance reviews once or twice a year. The two–plus-two coaching provides reinforcement and direction in a way that is positive, informal and approachable.  It’s an easy win. 

NIC: How do the different generations feel about feedback? 

Armstrong:  Gen–Z and millennials want frequent feedback. Gen–Z likes face–to–face engagement to help them see where their career is headed and how they can be successful. Baby boomers get a lot of personal reward just helping out their peers and engaging with their peers. They have a lot to offer and they like to engage with the younger workforce. Opportunities for mentoring and team projects are very positive.  

NIC: Minimum wages are increasing in a lot of places. Is the wage rate a big factor in worker recruitment and retention? 

Armstrong: We have to comply with state and federal rules on wage increases. But wages are not everything.  We focus on the enrichment of individuals’ lives.    

NIC: What would you like readers to take away from our discussion here today?  

Armstrong:  This is really all about connection. The recruitment and retention process is about that one–on–one connection. It sounds simple, but it’s not. It takes a well thought out strategy and follow through to make it work.   

Valerie Armstrong is director of human resources for Sodexo Seniors in North America. Connect with her on LinkedIn.  

### 

Feb. 13, 2019 

janekadler@gmail.com 

NIC MAP® Seniors Housing Rate Tiers

Similar to the intent of “class categorizations” seen across other commercial real estate property types, NIC MAP® has recently developed a “rate tiers” approach to our seniors housing property database that is quantitative and objective, with a goal to further segment our data for our clients. Useful to investors, analysts and senior living operators who wish to benchmark their properties to properties with similar rate structures, this approach allows NIC to promote greater transparency within the seniors housing property type and creates greater comparability to other commercial real estate property types.

• The NIC MAP Seniors Housing Rate Tiers Report provides a historical time series of average market rates (AMRs) and AMR annual rate growth, occupancy and inventory for majority independent living (IL) or majority assisted living (AL) property types by rate tier and metropolitan market for the 31 Primary Markets.
• Additionally, the report includes market aggregates for the 31 Primary Markets, Secondary Markets (32-99), and the 99 Primary and Secondary Markets.
• Defined uniquely for each metropolitan market (as opposed to a national average), three rate tiers for each metropolitan area have been estimated based on average market rate (AMR) data that is segmented by quartiles into three groupings: top tier (i.e., top quartile), middle tier (i.e., middle two quartiles), and bottom tier (i.e., bottom quartile). Each quarter, a property is classified into one of these three categories, and the designation of a property can change from one quarter to the next.
• The NIC MAP Seniors Housing Rate Tiers Report has a “same-store” methodology for computing rate growth within each tier. Year-over-year rate growth is computed by using only the properties included within a respective rate tier from one period to the next.

The example below shows the standard four charts found in this report for the New York metropolitan market from 4Q2018.

The following charts display occupancy by NIC’s three rate tiers for majority independent living and majority assisted living across the time series, aggregated for the 31 Primary Markets.

The data tells an interesting story in that independent living and assisting living occupancy results by rate tier have followed different patterns. The occupancy rate for bottom tier majority independent living properties in the 31 Primary Markets has generally outpaced the top and middle tiers since 3Q2006. The occupancy “spread” by rate tier was the greatest during and coming out of the Great Recession, perhaps due to the greater affordability of bottom tier properties, which may have allowed them to maintain higher occupancy rates than the top and middle rate tiers. More recently, majority independent living occupancy rates for the three rate tiers converged and reached a near-term peak close to 91% in the second and third quarters of 2015. Since then, and as the market has softened, the difference in occupancy rates between the bottom and top tiers widened to as much as 3.5 percentage points in 2Q2018, when the average occupancy rate of majority independent living properties in the 31 Primary Markets was at a 4-year low point. Currently, in 4Q2018, bottom tier majority independent living occupancy (91.9%) is 1.8 percentage points higher than in the top tier (90.1%).

However, rate tier occupancy for majority assisted living property types in the 31 Primary Markets followed a different pattern. Bottom tier majority assisted living property occupancy rates were lower than the top and middle tiers leading into and through most of the Great Recession. Coming out of the Great Recession, majority assisted living inventory grew at a faster pace than majority independent living, and occupancy across rate tiers was relatively narrow until it began to diverge around the fourth quarter of 2014, as strong supply growth outpaced demand. Since then, bottom tier occupancy rates have exceeded the top and middle tiers. In 4Q2018, majority assisted living occupancy in the 31 Primary Markets was 85.4%, near its record low rate of 85.3% reached in 2Q2018, when the difference between the bottom and top tiers was the widest at 4.9 percentage points. As of the fourth quarter, the difference between the bottom and top tiers is 4.4 percentage points.

In the coming months, NIC will begin to explore a number of intriguing questions raised by the data:

• Are markets with high top tier AMR annual growth rates dominated by large chain properties?
• Do markets with high variability between the top and bottom tiers suggest the need for greater local focus when analyzing the market fundamentals?
• What are the benefits and drawbacks of investing in metropolitan markets with wide or narrow variations in top and bottom tier pricing?
• Do top tier properties tend to be newer and bottom tier properties older?
• Are top tier properties located in neighborhoods with higher property values than bottom tier properties?
• Does the greater affordability of bottom tier properties help insulate them from occupancy pressures in times of fluctuating local demographic and economic conditions?
• How does AMR annual rate growth relate to changes in inventory and occupancy by rate tier?

The “rate tiers” approach to NIC’s seniors housing property database is, indeed, a “game changer.” This new report provides NIC MAP clients another way to segment the data with increased granularity, allows for greater comparability to other commercial real estate property types, and delivers on NIC’s mission to promote greater transparency within the seniors housing sector.