Wisconsin-based Agrace Hospice & Supportive care is raising employee compensation and expanding their benefits.
The three-pronged initiative includes a higher minimum hourly wage, year-end gratitude bonuses for all employees and lower health insurance premiums for lower-wage earners.
The workforce investment is aimed at long-term retention, according to Agrace CEO Lynne Sexten.
Coupled with organizational culture, compensation is among the largest retention drivers, Sexten said. But reaching a sweet spot where employees feel valued and are adequately compensated can be difficult in today’s climate, she added.
“As with almost every hospice, our single biggest expense is labor — it is front and center,” Sexten told Hospice News. “We invest a large amount of time, energy and money into strengthening our culture and listening to and thinking about what employees need to help support the whole person. A big part of recruiting and retaining highly qualified people is having competitive compensation and benefits packages, and the icing on the cake is an outstanding culture. Without those, there’s no growth, and it’s a hard hill to climb to keep care quality at its highest level.”
As part of the initiative, Agrace set a minimum $17 hourly rate threshold for employees across the board, regardless of full- or part-time status. Additionally, employees will receive a year-end gratitude bonus to mitigate the impacts of inflation.
The hospice provider has also revamped employee health insurance plans in 2023. Effective Jan. 1, Agrace is implementing a self-insured health insurance program for employees who make less than $26 per hour, meaning that these staff will pay lower monthly premiums for their health care coverage.
“No one is paid less than $17 an hour. But even as I look at that rate with the way the economy is going I wonder if that is enough to make sure that people don’t have to work a different job just to get by,” Sexten said. “There’s this constant balancing act of making sure we pay as close to the top of the market as we possibly can.”
Agrace’s revenue is up, but expenses “didn’t grow at the same pace,” largely due to lags in timing and costs around hiring and onboarding new staff, she told Hospice News. But the organization now had additional resources to invest in their employees.
These investments were necessary to support rises in patient volume in recent years, according to Sexten.
The nonprofit employs nearly 900 staff who provide hospice, palliative, personal care, adult day and memory care services to roughly 1,500 individuals across 19 counties in southern Wisconsin.
Agrace has served more than 66,253 hospice and palliative care patients since it was established in 1978.
The organization reported annual revenue of $75.7 million last year, a rise from $75.2 million in 2020. The nonprofit served more than 3,900 hospice patients during 2021, with an average daily census of 931 and an average length of stay around 103 days.
Agrace’s census has grown by 20% over the past six months alone, Sexten said. However, staffing volumes have been “tight” and haven’t kept up with demand and growth, she stated.
“We have this double whammy of a tight labor market, but we’re also growing unbelievably,” Sexten told Hospice News. “We needed to recruit people in numbers we were never even thinking we were going to need in order to accommodate that growth. This [initiative] carries a message of gratitude for the heavy load staff carried this year in continuing to deliver quality care while we tried to hire as fast as we could. We want to make sure we’re doing everything we can to reward and treat them well with a good work life and better financial balance.”
Going forward, the ability to continue pieces of the initiative’s components (such as the year-end bonus) will depend on Agrace’s financial performance, she said. This year was an “anomaly,” but 2023 could be much harder for hospices under increasing labor and financial pressures, Sexten added.
One important building block was securing lower health insurance rates for employees this year. Agrace has already seen an uptick in the number of employees enrolling in these expanded health benefit options, according to Sexten.
To achieve this, Agrace became self-insured.
“We were disheartened watching employees have to peel off from being able to afford their share of health insurance premiums,” Sexten said. “So, we decided for 2023 that we would step away from purchasing health insurance from a health plan and instead become an organization that funds our own insurance. We gave ourselves flexibility to have different tiers where employees’ portion is hopefully more affordable not only for themselves but their entire family.”