When the recession hit, continuing care communities such as those run by ACTS Retirement-Life Communities got walloped, chief executive Mark Vanderbeck told me during our Leadership Agenda interview published in Monday's Philadelphia Inquirer.
Residents typically fund their stays in these communities, which let senior citizens move from independent living to skilled nursing care, by selling their homes. But homes weren't selling. Residents typically pay monthly fees from their savings and investments, but those tanked too. I asked him how ACTS, which runs 23 communities in eight states for 8,500 residents, coped.
"Up until that time," he said, "We had 95 percent occupancy, and, candidly, if you have that level of occupancy, you are not as focused" on every detail of the company's expenses. "Now all of a sudden you are at 85 percent, you start looking at cost-efficiencies."
Vanderbeck said ACTS, which is based in West Point, Montgomery County, was determined to keep prices low for residents, to avoid cutting employees' wages or jobs and to continue the company's robust training program.
The major strategy, he said, was to delay annual wage increases. Exempt personnel waited six months for their annual increase and didn't receive incentive pay. Hourly workers' wages were delayed for a few pay periods. "Because of the number of people we have and the size of our organization, [we had] significant savings," he said.
"The fact of the matter is that when you have a $300 million plus operating budget, there are a lot of places to look at [for savings]," he said. "The idea was to create savings that were not on the back of the employees and did not show up in the residents’ fee."
Monday's blog post: Lessons from senior advisors.