An Overview of Outsourcing
In both the private and public sectors, outsourcing is a common and effective strategy used to enhance performance, improve hiring and training, and increase staff retention, while allowing organizations to focus on their key mission.
The expertise provided by a reputable external partner can deliver measurable value. When it comes to food service, in particular, there are a variety of challenges that outsourcing can address, including but not limited to:
- As good as an in-house program is, outsourcing food service to a specialized partner will outperform a self-operated program.
When food service is not your core business, your in-house program is likely lacking the expertise required to manage the complex and dynamic operations that come with food, dining, and hospitality management. This can result in increased costs, insufficient menus, diminished quality and service levels – all of which are labor and time intensive issues to remedy.
- Self-operated programs aren’t able to access and leverage the same resources and systems available through outsourced partners.
An in-house program may not have the ability to utilize the same economies of scale as a contract provider. From purchasing and support infrastructure to marketing and innovative technology, these aspects of your operations require significant investment and effort to implement. For an in-house program to take full advantage of these resources, the incurred costs may need to be passed onto other areas of the business.
- Attracting and retaining talented team members who are the right fit for your community can be difficult and time-consuming.
The frontline team members in your kitchens and dining rooms are a crucial ingredient to exceptional food service. Without steady and reliable talent, food service operation is nearly impossible to manage well. What’s more, attracting the right talent is one thing, retaining them is another. Many in-house operations are not built to scale for team member development and career advancement, which causes organizations to seek external management candidates rather than promote from within, and limits the growth of high potential team members.
This paper will provide an in-depth focus on the talent acquisition and retention challenges faced by in-house food service operations, particularly within senior living communities.
The State of Senior Living Today
Demand for senior housing is predominantly driven by the large population of older Americans within the Baby Boomer generation. According to recent reports from the U.S. Census Bureau, by 2030, all Baby Boomers will be over the age of 65, and one in every five people in the United States will be retirement age. By 2035, there will be 78.0 million people 65 years or older compared to 76.4 million under the age of 281.
As a result, the industry is responding accordingly with new approaches to compete in this consumer-driven market and attract the rising generation of savvy residents. Unlike their parents, when it comes time to select a senior living community, the more active, involved, and diverse Baby Boomers are seeking well-rounded environments that enrich their lifestyles, offer a myriad of opportunities and activities, and include professional staffing.
According to the J.D. Power 2018 Senior Living Satisfaction StudySM, community staff is the most important contributing factor to overall satisfaction2. The survey results show that “the staff is nearly twice as important as the cost given services factor in driving overall satisfaction.” However, the senior living industry continues to be faced with challenges when it comes to attracting and retaining the right talent.
Today’s Food Service Labor Market
The senior living industry has long faced labor challenges but today the stakes are higher than ever before. As the demand for senior housing rises, staff shortage continues to grow, putting administrators under significant operational and financial pressures. While these labor issues affect all senior living job groups represented in the industry, a particularly unique employment area within the industry is food service and hospitality.
With the highest turnover rates in any industry, food service is no stranger to the challenges experienced by senior living operators. The National Restaurant Association reported that in 2018, the turnover rate in the hospitality sector topped 70 percent for the fourth consecutive year. The overall turnover rate in the restaurants-and-accommodations* sector was 74.9 percent in 2018, up from 72.5 percent in 2017. The 2018 turnover rate represented the highest level since the Great Recession, after falling to a cyclical low of 57.1 percent in 2010. In comparison, the average turnover rate for all private sector workers stood at 48.9 percent in 2018.4
According to data from the Upserve Restaurant Insider, the highest turnover was among roles like counter service/cashier (36%), bussers, dishwashers and runners (34%), and “other” roles (32%) which encompass functions such as catering staff, sommeliers, etc. The lowest turnover rates were among bar staff and managers at 25% and 23% respectively.5
How Outsourcing Can Help
It’s clear that senior living operators are feeling the impacts of the nature of the foodservice workforce within their communities. In 2018, Unidine conducted a survey of senior living executives regarding their greatest challenges with food service in their communities.
When asked, “Which are your organization’s greatest challenges with respect to food service?”:
- 56% said ensuring that food service workers in our facilities are well-trained
- 50% said reducing turnover among food service workers in our facilities
“Attracting and retaining talent at all levels of our organization is our number one priority and by far our biggest challenge. Traditional past practices and sources just are not effective because we are competing for a workforce that has endless options in a thriving economy. We knew we needed to call in a partner when our internal recruiting team was spending 40% of their time on filling food service roles” – Head of Operations of large multi-site system in the Chicago Metropolitan area
When asked, “If you were choosing a food service provider for your organization, which of the following features would be most important to you?”:
- 63% said strong recruiting and training programs for team members
- 55% said a strategic partner in solving business challenges
“Recruitment, retention, and development wouldn’t be possible without having the standards and consistent execution that a specialized management company brings to the table.” – Executive Director of a medium-size single-site rural provider in Pennsylvania
For senior living communities weighing the pros and cons of outsourcing food service, recruiting and retention are strong factors to consider in their decision-making process. Not only do outsourcing providers act as strategic partners but by fully integrating themselves into your community’s unique culture and environment, they can help address workforce challenge using numerous resources and methods:
- Recruiting qualified staff who are the right fit for your community.
Your outsourcing partners’ recruiting practices and retention strategies are likely better aligned with the competitive workforce landscape that goes beyond senior living. Further, they will utilize tactics specifically designed to recruit hourly team members. For example, at Unidine, all hourly requisitions have a dedicated frontline recruiter to support your community. On average, our hourly positions are filled within 11 days.
- Implementing onboarding strategies that help new hires start strong and empower absorbed team members.
For both new team members starting their career and long-time team members being transitioned to an outsourcing partner, their professional onboarding process helps them put their best foot forward. Backed by a multitude of support functions and systems, including week one checklist, as well as 30, 60, and 90-day checklists, team members experience a comprehensive orientation process that is designed to help them feel confident in their abilities from day one.
- Champion professional development and establish pathways for growth.
Without continuous learning, many team members will become bored and discouraged, and may seek career opportunities elsewhere. Your outsourcing partner can offer professional development and specific training at all levels, helping to expand team members’ skills and interests, while also delivering clear, actionable feedback on their job performance, which will position them for advancement opportunities within current operation or sister communities.
- US Census Bureau. “Older People Projected to Outnumber Children.” The United States Census Bureau, 3 Dec. 2018, www.census.gov/newsroom/press-releases/2018/cb18-41-population-projections.html.
- “2018 Senior Living Satisfaction Study.” J.D. Power, 9 Feb. 2018, www.jdpower.com/business/press-releases/jd-power-2018-senior-living-satisfaction-study.
- “Job Openings and Labor Turnover Summary.” U.S. Bureau of Labor Statistics, U.S. Bureau of Labor Statistics, 10 June 2019, www.bls.gov/news.release/jolts.nr0.htm.
- “Hospitality Industry Turnover Rate Ticked Higher in 2018.” National Restaurant Association, www.restaurant.org/Articles/News/Hospitality-industry-turnover-rate-ticked-higher.
- Steinman, Seth. “The Reasons Restaurant Employees Leave, and How to Manage Turnover.” Restaurant Insider, 30 Jan. 2019, www.upserve.com/restaurant-insider/3-common-reasons-restaurant-employee-turnover/.