Recently, the Wall Street Journal ran an article (click here for article) about the purchase of the troubled Assisted Living Concepts by one of the world’s largest PE firms, TPG. In the article, the CEO brought in by TPG to turn ALC around had this to say:
Assisted Living Concepts Inc., which owns over 200 properties in 19 states, suffers one of the highest vacancy rates in the industry because it failed to properly invest in “people, in training and in technology,” says Jack Callison who was hired by TPG to run the company this month. “You never want to hire people, throw them into the deep end of the pool and hope they can swim.”
It’s truly one of the first times I have seen the declaration that compliance, human resource and risk management professionals have been saying for years in print: you have to invest in your people and give them the proper training and tools to run a successful business. In this case, new leadership is directly tying vacancy rates to a lack of proper training for staff.
There may not be an industry more reliant on well-trained and skilled staff than assisted living/senior care. As a former executive with a large west coast senior living provider, I saw this firsthand in our communities. While states mandate a basic level of compliance for staff, it’s up to the organization to instill the culture, protocols and resident care standards that will prove to be the success or failure of the company.
With all the pressures faced by the people who commit their lives to serving our seniors (staff training and retention, state licensing and inspections, cost controls, proper care planning and communication) one of the easiest areas to let slip is the training of your staff because, in the short term, it doesn’t appear to impact revenue and rent rates. However, as the folks at TPG have learned from their acquisition of ALC, sooner or later, how you choose to invest in your employees will prove to be an asset or a liability.