The senior living and home health & hospice sectors brace for an economic tempest marked by slowing GDP growth, tight labor markets, and a surge in capital costs going into 2024.
These economic undercurrents are set to test the mettle of business owners, particularly those whose preparation may fall short. These economic factors will undeniably affect the hiring landscape within home health & hospice, creating a new set of hiring dynamics.
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GDP Growth:
- The U.S. economic growth is showing signs of a slowdown. The median projections from Federal Reserve policymakers have adjusted the potential growth rate from around 2.5% a decade ago to 1.8% as of June 2023. Additionally, the Organisation for Economic Co-operation and Development (OECD) mirrors this sentiment by forecasting a deceleration in the GDP growth, from 2.2%.
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Tight Labor Markets:
The labor market continues to remain tight, although there’s a slight cooling off. Unemployment claims are at a low range of 194,000 to 265,000, indicating a tight labor market scenario. However, economists predict a slowdown in labor market activity due to potential recessionary pressures, inflation battles, and a possible uptick in layoffs and unemployment.
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Rising Cost of Capital:
- The cost of capital is on an upward trajectory, as evidenced by rising interest rates. Higher central bank policy rates are pushing the cost of capital higher for corporations and other debt issuers. This trend has been ongoing for about 18 months, with borrowing costs rising relentlessly, impacting the financial conditions in the U.S.
The tightening labor market signifies a dwindling pool of available talent, igniting fierce competition among employers. For the senior living and home health & hospice sectors, attracting and retaining skilled healthcare professionals will necessitate more than just competitive salaries. Comprehensive benefits packages, flexible working conditions, and clear career progression pathways will become indispensable components of the hiring proposition.
Plan Ahead for Workforce Needs
The economic turbulence underscores the importance of precise workforce planning. Being able to accurately forecast staffing needs, and adjust hiring strategies in response to economic shifts, will be a linchpin in maintaining service quality amidst financial constraints.
Amidst the economic and hiring challenges, nurturing a positive organizational culture is crucial. Engaging and retaining existing staff through recognition programs, continuous learning opportunities, and fostering a supportive work environment will be key to maintaining a resilient workforce.
With a well-thought-out hiring strategy and a strong focus on employee engagement and retention, navigating through the economic storm is achievable. The journey may be challenging, but with foresight and adaptability, the sectors can emerge with a stronger, more robust workforce ready to deliver exemplary care to those in need.
If you’re interested in learning more about Full Spectrum Search Group and retaining an executive search firm for your hiring needs, connect with Full Spectrum Search Group.
