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Business Observer Friday, Jan. 4, 2019 2 months ago

Company, behind an empathetic model, aims to conquer senior living surge

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The senior living sector in 2019 will be anything but static, from fancy food options to new home styles. How will the industry handle a sticky labor shortage?
by: Mark Gordon Managing Editor

Fresh out of college, Kristin Kutac Ward sought a career in hospitality, maybe at a resort.

After quickly realizing it wasn’t fulfilling, she switched to senior living, where she found a passion working with the elderly and their families. In a management track role in the mid-1990s, including earning her nursing home administrator-in-training license, she worked for a senior living company in Atlanta. “It was fascinating work,” says Kutac Ward. “I really wanted to spend time figuring everything out.”

Kutac Ward quickly figured out that back then, nursing homes, on a national scale at least, for the most part were drab and dreary substitutes for God’s waiting room — highway rest stops compared to some swanky places today. She eagerly suggested to her boss that her company institute some customer-service training to begin changing the model. “She said, ‘We don’t do customer service in nursing homes,’” Kutac Ward recalls. “‘If you want to do customer service go back to working for hotels and resorts.’”

‘You have to be engaged with your people. You have find their reason why.’ Kevin Ahmadi, Volunteers of America

Kutac Ward didn’t heed that advice. She instead embarked on what’s now a 20-year career in senior living, from operations to consulting to marketing. She co-founded her own company, Solutions Advisors Group, in 2009.

That firm relocated its corporate headquarters in October from Princeton, N.J., to St. Petersburg. Companywide revenue has increased 30% year-over-year each of the past three years. The business includes three divisions: one unit, Solvere Living, operates and manages assisted living, memory care and other facilities; another unit, Trilogy Consulting, handles marketing, web design and other collateral for senior living entities; and a third division, Solutions Advisors, consults on sales and operations issues with senior living companies nationwide. Company officials decline to disclose specific revenue figures.

Kutac Ward and Solutions Advisors Group are also at the forefront of some major shifts and trends in senior living, both in Florida and nationwide.

For one, while senior living vacancies in some areas of the country have dipped, a building boom in many places, including the west coast of Florida, shows little signs of slowing down. New projects are coming from nontraditional industry players, too, such as multifamily developers and private equity firms.

“There’s a lot of interest in seniors housing now, simply based on strong demographics,” says Beth Mace, chief economist at the National Investment Center for Seniors Housing & Care. By demographics, Mace refers not only to elderly, but the baby boomers taking care of elderly who seek newer places to move their parents or loved ones. “Demand and leasing have been strong,” Mace adds, while pointing out some markets nationally will see more projects to keep up with the demand.

Those markets, says Mace, are usually places with more available and cheaper land, warm climates and lots of people. So Dallas, Houston, Atlanta and several Florida markets are hot, while California, says Mace “not as much,” due to restrictive building policies.

Other senior housing trends companies like Solutions Advisors Group and its peers are watching in 2019 include a move toward more foodie-like dining options; access to more and greater technology for residents; and new styles of homes and units, looking at creative uses of space and modular homes.

In total, it’s Senior Living 2.0, with an eye toward creating a fun-meets-function atmosphere. Take Gulf Coast Village, a continuing care retirement community in Cape Coral with everything from independent living to assisted living to memory support. Volunteers of America, a national nonprofit that helps several demographics, including seniors, operates Gulf Coast Village like “there’s a cruise ship marching around here,” says Kevin Ahmadi, VOA’s Southwest Florida area operations director.

Find the why

One other trend to watch going into the new year? An acute shortage of employees, everywhere from nurses to front desk staff and therapists to maintenance.  

Several industry leaders say the labor drought is the most disruptive force to seniors housing operations and business models in years. And the people who are in the industry have a distinct advantage: leverage.

“The wage and benefits pressures are piling up,” says Ahmadi. Kutac Ward, Ahmadi and others cite cases of people in care and clinical positions in seniors living facilities job-hopping for as little as $1 an hour more in pay. “We don’t want to get into a situation where we are robbing Peter to pay Paul.”

Senior Advisors Group, under its Solvere Living flag, operates a dozen facilities in six states — Florida, New York, New Jersey, Texas, Maryland and Virginia. Properties it manages in the Tampa region include Tessera of Brandon, a $28 million assisted living and memory care facility that opened in April, and Tessera of Westchase, scheduled to open in February. A third Florida community it will manage, Heartis in Venice, is expected to break ground in January.

All together, in all units, the company has some has some 550 employees. Kutac Ward says 2019 is the year the business goes from a focus on recruiting to retention and recognition.

On recognition, the company, for ne example, will continue to enhance its MVP program: mission, values and purpose. When an employee demonstrates a core value on the job (integrity, loyalty, transparency or entrepreneurship) they win prizes, from a hand-written note to an MVP pin to a personalized gift worth $50. Any employee who has six MVP pins in a year earns a $1,000 bonus. 

Another piece of the recognition program in 2019, says Kutac Ward, can also aid retention. The firm’s mentoring initiative offers a referral bonus for recommending a hire who stays past 90 days. That experienced employee can also earn mentoring bonuses for meeting specific benchmarks in the new employee’s first six months. “We want to give everyone on the staff the opportunity to grow in their careers,” Kutac Ward says.

Ditto for Ahmadi. He says the potential solution to finding and retaining top employees, despite some companies doing the opposite and poaching people, is not to “pay more and more.” He says Volunteers of America seeks career people, not job people.

“At the end of the day, you have to be engaged with your people,” Ahmadi says. “You have find their reason why.”

Control the narrative

Solutions Advisors Group, meanwhile, has an edge in the scramble to stay ahead of hiring and operational trends in senior living: its diversity of services; clients, in nonprofit and for-profit facilities; and varied executive-level staff. Combined, says Kutac Ward, that allows the company to remain nimble.

“We’re still fairly young as a company in this industry,” she says “There’s a lot we need to learn, but that means there’s a lot we can do creatively to help clients. And we want to make sure we keep our entrepreneurial spirit as we get bigger.”

While one 2019 company goal is to add four to eight more buildings to Solvere Living — Solvere means solve in Latin — Kutac Ward says the objective isn’t to be big simply to be big. She doesn’t foresee the company surpassing 30 buildings in its management portfolio, for example.

Kristin Kutac Ward moved her company's headquarters to St. Petersburg in 2018.

The problem-solving mentality dates back a decade, to when the company was founded. Kutac Ward, having held executive posts for seniors housing companies, first in Tampa and later in New Jersey, wanted to branch out on her own. Her company’s first client was a continuing care retirement community in Princeton, N.J., where the client was in recession-induced bankruptcy. It needed someone to get its units filled, quickly.

Kutac Ward approached the challenge from a psychology position, of empathizing with potential residents about the big life change of moving from the home to a retirement community. Many of these potential residents were retired Ivy League professors and business titans, people used to being in control. But Kutac Ward says she and her team won them over when “we realized we have to come up with ways to relate to people in this situation.”

The company was successful, which led to more work from word-of-mouth. Even today, referrals are the biggest source of clients. Says Kutac Ward: “We got a reputation that we were really great at filling up (complicated) buildings.”

And the lessons learned with that assignment and other projects continues to define Solutions Advisors Group today. “You can’t sell units like you are selling a regular condo,” Kutac Ward says “This is a huge change in someone’s life. You can’t just sell it like it’s any product.”

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