Worcester Business Journal

10 Worcester Business Journal • January 19, 2015 www.wbjournal.com Labor costs could limit the supply of home-care workers FRESH BEGINNINGS n Compass Consulting Group, with of- fices at 645 Chandler St. in Worcester, has changed its named to Forward Finan- cial Services. n MATSU, a clothing, jewelry and home décor boutique, is open at 92 Boston Post Rd. in Sudbury, at the Wayland line. The business is owned by Dava Mura- matsu, who previously had a MATSU shop on Newbury Street in Boston. n The Discovery Museums of Acton have partnered with The MathWorks of Natick to bring the museum's Traveling Science Workshops to elementary and middle schools. The program emphasiz- es STEM (science, technology, engineer- ing and mathematics) concepts. n Worcester-based graphic design and branding firm Origin Designers has ex- panded its offerings and has a new name: Origin Consulting. The company, owned by Joshua Croke, now offers a broader range of services, such as brand auditing, and business assessment and strategy. n Rapscallion Table & Tap is open at 5 Strawberry Hill Rd. in Acton. The new res- taurant and taproom is owned by Peter Daniel, and features creations from chefs Ian Michaud and Steve Cataldo. n As part of the facility's renovations, Fitchburg Art Museum has moved its main entrance to the Simonds Lobby entrance at 185 Main St. home health aides but require less train- ing, was $12.36. Massachusetts' median wages are higher than the national medians for these jobs, which are closer to $11 and $10 per hour, respectively, according to BLS data. But they still amount to an annual salary of only around $25,000 for workers who can find full-time employ- ment in the field. In some ways, it's logical that home care workers don't earn high wages. Lisa Gurgone, executive director of the Home Care Aide Council, a Massachusetts trade group for the home care industry, said the field has a "low barrier to entry" for employees. Often, they're immi- grants with limited English, and usually not well educated, she said. The work- force also lacks stability, with an annual turnover rate of about 50 percent, according to Gurgone. Increasing importance as ranks of elderly grow That's a problem, Gurgone said, because the U.S. health care system already relies heavily on these workers to manage the care of elderly patients, and that's becoming more pronounced as the federal Affordable Care Act encourages administering health care in the lowest cost setting possible. For the elderly, that often means at home. But there's a need for a better-skilled workforce, and Gurgone said that won't come without higher pay. "We see this workforce as a very important part of the health care spec- trum," Gurgone said, noting that home health and personal care aides are the second- and third-fastest-growing occu- pations in the U.S.; according to the BLS, their numbers will increase by about half between 2012 and 2022. Gurgone has been lobbying for better pay for home care workers for 12 years, and during last year's state budget delib- erations, she and home care agency offi- cials who support higher wages were able to convince lawmakers to fund a pay hike of about 75 cents an hour for approximately 17,000 home care work- ers. The raise is paid through a $6.1 mil- lion state budget line item, and is required for aides who work with clients whose care is administered by the state's Office of Elder Affairs. But Gurgone said many home-care agencies have extended the increase to aides who work with private-pay clients in order to be equitable. Nonetheless, news of the raise brought joy to workers, who in the weeks before Christmas received retroactive pay increases to July 1 (the start of the state's 2015 fiscal year). At Worcester-based Family Services of Central Massachusetts, many employees were elated to receive extra cash to pay for Christmas gifts, holiday meals and car repairs, Executive Director Karen Laganelli said. And the wage hike bodes well for the non-profit agency, too, since it can offer wages that are more competitive with those of larger home health and personal care business- es, which are continually launching as entrepreneurs seek to capitalize on swell- ing demand for home care. "It's gotten very difficult for small agencies like ours to compete," Laganelli said. Pressure on agencies However, Laganelli recognized that there is pressure to continue offering a higher hourly wage, as employees will expect the state-funded raise to be main- tained, regardless of whether the Legislature continues to support it. And agencies that do little or no busi- ness with the Office of Elder Affairs will likely feel the squeeze as well. Gurgone said some agencies have argued that the industry wage hike will boost costs, which will be passed along to the con- sumer, who may then opt to hire some- one under the table at a lower rate. It's an argument Gurgone said may have merit, but she argued that wise consum- ers will choose an agency whose home care aides are trained and typically mon- itored by nurses. David Price, owner of home health franchise BrightStar Care of Milford, said an industry wage hike is another indication that labor costs will continue to grow for home care agencies. While BrightStar works mostly with private payers, the franchise has one state contract, so Price will deliver the hike to at least some his employees. But he said other unfunded mandates are the real challenge, including the new federal requirement to offer health insurance to full-time workers, and the state require- ment, passed by voter referendum in November, that requires employers to offer paid sick time to employees. As for wages, Price expects other fac- tors — chiefly the rules of supply and demand — to push pay rates up in the coming years. He said the labor pool isn't expanding quickly enough to meet rising demand for home health services. Analyst: Worker supply is fine Countering the idea that there's a home health workforce shortage was Jon Osborne, an analyst with California- based Staffing Industry Analysts, which advises companies on matters related to contingent work. Osborne said unem- ployment in the home health sector tends to be relatively high nationally, at around 7.5 percent, compared with an overall unemployment rate of 5.6 per- cent, in December. But he noted that the jobless rate for home health workers is falling. Osborne surmised that because the home health business tends to have tight margins, companies can't neces- sarily afford to pay unemployed work- ers enough to incent them to go back to work. If the money were there, he said, the workforce would keep pace with the need. "You can get as many as whatever you want if you can pay for it," Osborne said. But Price said he and other home care agency owners are in a predicament when it comes to increasing pay. Though BrightStar pays about 30 to 50 percent above minimum wage, Price spends considerable time helping employees with car trouble, and sometimes grants cash advances to help employees with repairs so they can travel to clients' homes. If employees were to make more money, some of these problems would be solved. But he wonders how the cost will be absorbed by an industry in which he says "no one is getting rich." "There are few options to absorb those increased costs without passing them on to the consumer," Price said. n "It's gotten very difficult for small agencies like ours to compete." Karen Langanelli, executive director, Family Services of Central Massachusetts >> Continued from Page 1 "We see this workforce as a very important part of the health care spectrum." Lisa Gurgone, Executive director, Home Care Aide Council P H O T O / E M I L Y M I C U C C I P H O T O / C O U R T E S Y

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