‘Feel Like a Risk’: Nursing Home Operators Appear To Reduce Wage Increases Compared to 2023

Labor costs continue to be top of mind for nursing home operators as the workforce shortage persists and operators anticipate the finalized version of the federal minimum staffing rule.

Operators reported average wage increases for their employees of 4.43% in 2023, dropping to 3.64% thus far for 2024, according to the Ziegler CFO Hotline survey conducted in February. 

“Wage pressure continues to rise and in every employee engagement survey, employees feel they are not paid competitively,” one respondent said.


And yet, another respondent said that given nursing pressures, budgeted increases of 3% feel like a risk. Moreover, meaningful moves in wages over the past two years have had little impact on overall recruitment and retention, along with reduction in agency utilization, this respondent noted.

Generally, nurse wage increases went beyond 3% as operators have tried to stay competitive, respondents said. Others said their nurses, certified nursing aides and resident aides received 12% wage adjustment increases.

“For our new fiscal year starting on April 1, no employee will make less than $15 per hour. We also offer shift [differentials] of $2 per hour for nights and an additional $2 per hour for weekends,” a respondent told Ziegler. “We offer shift [differentials] to all employees, not just health care employees … [but] attracting dietary staff is still a struggle.”


Overall the budget dedicated to employee wages and benefits was on average nearly 56%, although the budget range for this category widely varied between respondents. The minimum devoted to wages and benefits was 15% while the maximum was 87%.

Given the dramatic change in labor and wages over the past three years, other operators say they are taking the time to conduct compensation studies though outside firms, and making appropriate adjustments as identified.

For operators that offered attendance bonuses, open fill-in shift bonuses were the most common at 37% of respondents.

Some operators complained of turnover, with employees leaving shortly after receiving their sign-on bonus. “It never seems as though we can do enough,” one respondent said in the survey. “We offer significant sign-on and referral bonuses and then staff bide their time [until] they qualify for the entire payout and then a week or two after, they leave. So frustrating.”

About 42.7% of respondents said they didn’t offer any sort of attendance bonus to employees.

About 71% of survey respondents said they have a resident-funded holiday bonus account, where residents contribute money to fund year-end holiday bonuses for employees, and 49% said that bonus was distributed by the facility resident association.

“The holiday bonus funds collections were down this year from prior years. In addition, our general giving to the community was also down. I believe this is due to inflation and residents worrying about spending levels,” one respondent said of resident-led holiday bonuses.

Others have added MLK Day and Juneteenth as additional holidays, and offer gift cards for not calling off the days prior to a holiday or the day after for Thanksgiving and Christmas.

Almost all surveyed organizations offer 401(k)/403(b) benefits. The most common benefit offered was company match, followed by vesting and then contribution limits and pensions.

The majority of respondents said they didn’t distribute any sort of annual wage or benefits statement for employees at 65%.

The Ziegler survey’s respondent pool was heavily weighted toward nonprofit life plan communities, otherwise known as continuing care retirement communities (CCRCs).

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