VOICES: Eric Scharber, Managing Principal, SimiTree

This article is sponsored by SimiTree. In this Voices interview, Home Health Care News sits down with SimiTree managing principal Eric Scharber to learn what home-based care providers can do to manage unprecedented wage growth, and how they can capture the workforce of the future: the millennials who by 2025 will make up 75% of the workforce, along with Generation Z behind them — with 50% of all workers as part-time employees.

Home Health Care News: Eric, what career and life experiences do you most draw from in your role today?

Eric Scharber: I am a managing principal, meaning I oversee all of our talent solutions here at SimiTree, everything related to workforce, staffing, recruiting, interim management — all of that. I have done nothing but work in the employment industry since graduating college. I got into it right away, right out of school in 2000 as a recruiter in the health care industry. I have worked in this space ever since.

What economic relief are we seeing for home health and hospice providers right now?

Scharber: The short answer is I don’t believe that we’re seeing any yet. Over the past, call it, 24 months, I’ve seen wages increase at the rate that they never have before. Over the past 20 years, I’ve seen the traditional 3% to 4% increases a year. That’s been pretty standard even through years when the market’s been up or down a little bit. This past 24 months, we have seen rates rising as much as 12% to 14% in the home health and hospice industry.

There’s such a shortage of staff and such a dramatic amount of growth in this industry that I think it’s going to change. I was at the Staffing World conference this year, and one of the best presentations was on life expectancy and fertility rates. Life expectancy from the 1960s was about 62 years of age, and it’s now in the 76, 77 years of age on average in the U.S. Then you look at fertility rates in that same timeframe, and they went from over six down to about just over two — 2.3.

We’re getting really good at not dying and we’re getting really good at not having as many babies. That creates this issue based on our demographic dynamic where over the next 50 years, we just don’t have enough people to care for this aging population. Until the demographic piece changes, which is decades away, I don’t see a lot of relief.

Why is wage growth so much higher for home-based care than other health care industries?

Scharber: If you look at pre-pandemic time, the Bureau of Labor Statistics put out a stat that said home health care services will be the fastest growing industry in terms of employment growth to the U.S. economy through the year 2025. I think that stat came out somewhere around 2018. Then you had this pandemic, which put an already fast-growing industry on the fast track even more because so much of our population wanted to be cared for in their home.

That’s one aspect of that pure growth trajectory: just how fast it’s growing. The other aspect has to do with the niche type of employees who work in this space. Many of our clinicians or just health care management professionals are taught very general health care. It’s usually catered toward the four walls of a hospital or ambulatory care, things like that. There’s not a lot of specialists coming out who have experience in home health and hospice. It’s something that has to be trained and taught and brought up to speed.

When a field has so much growth on a very steep trajectory combined with an already small talent pool against high service demand, wage growth is exacerbated because the experienced workers who are willing to work in the space know their value and leverage. It’s such a candidate-driven market, meaning there are way more jobs than there are candidates to fill them. That means wages are going to continue to increase. It’s leveled off a bit, but it’s not going to come back down because it’s still a candidate-driven market.

How is this growth impacting talent strategy for home health and hospice providers?

Scharber: There are a few areas that I’ve been talking about a lot lately. The first is that talent strategy has risen to the top of the list of what executives are considering as their number one challenge. It was a conversation 10 years ago: what are we going to do about workforce? What are we going to do about this nursing shortage? But organizations were distracted by the regulatory changes that were happening and the changing reimbursement models.

At the end of the day, if you don’t have the talent in place to execute on your initiatives, the regulatory and reimbursement challenges don’t matter. The biggest change I’ve seen is that in every conference I’ve been to or spoken at, and every executive I’ve talked to, workforce dominates the conversation.

From organization to organization, you’re seeing a dramatic re-focus on employee experience and company culture. How do you motivate? How do you inspire? How do you attract talent? You do that by having a great culture through dynamic leadership, by aligning your core values and your mission with the generation that is making up the majority of this workforce.

By 2025, the millennial generation will make up 75% of the global workforce. Right behind that is Gen Z. A lot of organizations are starting to ask themselves, am I creating an environment here at this company with a culture that’s attractive to these generations? If you ask them person to person, most will say that no, they’re not doing it.

The impact on strategy is that companies are starting to look inward and ask, how do we make ourselves the most attractive company in the marketplace? Because there’s not enough talent to go around. At the end of the day, there will be winners and losers. How do they become the winner? They do that by being the employer of choice.

The other area to focus on is aligning with people who can help. I’ve got clients who’ve worked with us to tap into our staffing solution’s talent pool. They are recognizing that using a third party to help with talent acquisition is no longer a luxury. It’s a necessity. The network that we can open our clients up to is vast and dramatic and super competitive.

I heard a stat at that Staffing World conference that in the coming years, up to 50% of the workforce in America will be temporary workers. There have always been temporary workers, but the whole idea of gig work or relying on staffing companies has grown at a massive pace. People are starting to like the idea of that, especially these generations who might want to retire and phase back a little bit. They can go and do interim work in temporary management positions.

This is a strategy for organizations that take an open mind. They might say, we didn’t leverage that in the past, but we don’t want a vacancy in a key role to sit there. If you’re able to put somebody in place in an interim management role you can continue moving forward as an organization. We’ve seen our interim management services grow at the fastest rate they’ve grown in the last 10 years.

You mentioned “interim management. What is that and how does it work?

Scharber: It’s temporary management staffing, and while it’s had different names over the years, we at SimiTree call it “interim management.” We’ve got a bench of professionals who have worked with SimiTree for years and years and years doing this gig work. It’s what they like to do, it’s what they’re good at. Helping multiple organizations out on a regular basis.

Think about the average time it takes to fill leadership positions. You can expect it to be 60 to 120 days. Can you just have that position open while you’re recruiting? If you do, you’re either losing traction on some of your business, or maybe you’re dumping that workload on other folks and hurting their employee experience.

As an alternative, you can have an interim manager. This person comes with all the experience. There’s no ramp up. They hit the ground running and they could continue to execute on your initiatives. They’re an extension of your team. They work with organizations for as little as 30 days. Our average project is four to five months.

The nice thing is that they can step into any role. We’ve got interim leaders who are in the C-suite, whether it’s financial, operational, clinical compliance mid-level management positions, all the way down to that clinical manager level role. It’s totally flexible based on your organization.

What is your prediction for the shortage of leaders in home health and hospice?

Scharber: Unfortunately this workforce crisis was predicted years ago. I hear a lot of people say, “I’m so glad this pandemic is behind us. I can’t wait to get back to the way things were.”

The problem is that before this pandemic ever came, we knew there was going to be a workforce crisis because of the demographics. This isn’t going to change for a long time.

As far as what we’re going to do about it, I think you can go a couple of ways. You can focus on your culture and being that employer-of-choice for the generation that is the workforce of the future. There is also an aspect of the international landscape. I think we have to look at immigration reform as a way to solve some of these problems.

There are people around this world who want to work who are highly skilled and highly trained, and who want to come to the U.S. I would encourage everybody to work with their government officials to try and create opportunities for people who want to be here.

Finally, I would just say, build the relationships, whether it’s with SimiTree or other firms that can help you get access to the largest population of professionals in this space. You’ve got to use every resource possible to try and fill the gap. This isn’t going to change for a long time to come.

Finish this sentence: “The top strategy that home-based care providers should employ for the remainder of this year to best prepare for their staffing needs next year is…”?

Scharber: Make it about your people.

Editor’s note: This interview has been edited for length and clarity.

SimiTree is a revenue cycle, coding, professional services and talent management resource for post-acute and behavioral health organizations. To learn more about how to achieve stronger financial performance, call 800.949.0388 or visit SimiTreeHC.com.

The Voices Series is a sponsored content program featuring leading executives discussing trends, topics and more shaping their industry in a question-and-answer format. For more information on Voices, please contact [email protected]

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