Payroll Pains – Best Practices to Incentivize Staff Retention in Home Health Care

Taking care of payroll isn’t just about calculating pay and cutting checks, but rather, it’s a place where key metrics can be reviewed for trends in financial loss due to a lack of staff longevity. Between fluctuating workloads, reimbursement challenges, and the ever-present staffing crisis, home health agency leaders are feeling pressure to ensure every dollar is spent wisely. The way payroll and compensation are managed could be the difference between significant financial losses related to the revolving door of staff turnover and a thriving company boasting of staff loyalty and longevity.

The Cost of Turnover

According to the 2024 Activated Insights Benchmarking Report, the turnover rate in home-based care has reached a staggering 79.2%. Agencies lose an average of $171,600 annually due to caregiver turnover. Frequent staff changes disrupt continuity of care, erode patient trust, and burn out the remaining team.

Pay Above Average to Recruit and Retain

One best practice includes paying staff above average. Agencies that paid above the 75th percentile saw a 35.5% decrease in turnover. Competitive wages signal respect, stability, and a long-term investment in the team. Although offering more financial incentives may seem costly for some home health agencies (HHAs), turnover typically results in greater long-term expenses. Boosting pay to current employees and using financial influence to attract new talent is a tactic well supported for organizational success. In addition, following through with timely and accurate payment is essential to build company loyalty and trust. Practices in line with incentivized payments can include:

• Shift differentials for evenings, weekends, overnight triage and holidays,
• Retention bonuses at 6-month and 12-month marks, and
• Performance-based incentives tied to client satisfaction scores, positive peer evaluations or visit completion and accuracy rates at a benchmark score

Reduce Administrative Burdens

Frontline staff at HHAs often share administrative burden. Significant time is spent working on documentation, case management and administrative tasks.  This work is often conducted remotely or at locations separate from the primary agency facility which could potentially be overlooked by agency leadership. Cited burdens in the literature include documentation associated with medication administration, assessments, patient education and more. Each year it seems there are more mandated tools to be used for direct care staff such as delirium screenings, fall risk assessments, skin assessment scores, baseline education evaluations, safety screenings and more. In addition, the use of multiple platforms, dual documentation and the use of multiple devices can add to the burden. To reduce administrative burden, HHAs should strongly consider:

• Implementing mobile apps to track patient visit types and encounters,
• Using technology to automate clock-ins and clock-outs when staff start and end visits and
• Using a CHAP & ACHC verified home care software platform within the agency that can centralize the process for payroll, patient visit scheduling, compliance and daily staff administrative tasks

Gather Staff Insight

Employee engagement is a major predictor of staff longevity. Gallup defines it as “the involvement and enthusiasm of employees in their work and workplace.” Knowing the level of engagement within the HHA is valuable data that can allow for insight into areas for agency improvement. Employees will not stay only for a paycheck; they also need to feel valued and be recognized by leadership to boost their commitment. Survey staff at various times and seasons within the agency. Ensure surveys are anonymous. When reviewing results, always consider internal and external factors at play. For example, review data such as the percentage of new hires at the time of survey and shifts in practices within the agency. Are patients being accepted that are more acute and complex? Did the agency roll out any new roles such as charge nurse each shift or a different shift during the workday? 

Survey your staff with questions like:

• What do you love about working here?
• What would make your job easier?
• What would make you stay?

Create a Referral Program

It is no secret that publicly available reviews and word of mouth are often more influential than a fancy company website or well thought out mission and vision. The same goes for attracting talented employees. Word-of-mouth referrals have the lowest turnover rate and one of the lowest acquisition costs. To support this practice within the agency, try:

• Offering tiered referral bonuses ($100 at hire, $200 at 90 days, $300 at 6-12 months),
• Make the referral process digital, easy to track and
• Celebrate successful referrals publicly to build employee motivation and momentum

Prioritize Wellness and Work-Life Balance

In a 2022 CDC survey, 46% of healthcare workers reported “often” feeling burned out. Reports of overwhelm at work and actively looking for a new job all increased over 30% in recent years. HHAs also fall in a unique category, serving patients in variable working conditions, often with less resources and in more isolation. Agencies must treat employee health and wellness as a retention strategy, not a perk, to increase longevity. HHA leadership can model prioritizing staff work life balance by:

• Offering mental health days or flexible PTO,
• Providing access to counseling or wellness apps and
• Creating a culture where taking breaks is encouraged and not penalized or belittled.

Payroll isn’t just a line item, but rather it offers much insight into the health of the company. By paying competitively, reducing friction, listening actively, and supporting wellness, HHAs can position themselves ahead of the competition to attract employees committed to longevity.

References:

• 2024 Activated Insights Benchmarking Report
• 2022 CDC survey, 46% of healthcare workers reported “often” feeling burned out.
• Gallup
• Medication administration, assessments, patient education
• Payment percentage above the 75th percentile and turnover

Related Blogs:

1. Five facts about caregiver burnout that will startle you
2. Improving caregiver retention through nurse mentor programs
3. Hiring new staff for home care agency growth
4. Education’s role in caregiver retention
5. Why home care agency caregivers quit and how to keep them happy
6. Developing strong home care agency teams

Home care software education

Want to learn more about home care software, or looking for information on how an EMR for home health can help agencies thrive? Check out some of these blogs on researching, choosing, or implementing homecare agency software for your business.

1. How do I choose the best home health care software?
2. Finding the best home care EHR software for your agency
3. The value of an EMR for home health care- a quick overview