This article is sponsored by Yardi. As senior living demand continues to rise, operators are being pushed to think differently about scale, staffing and the kinds of environments older adults actually want.
For Loe Hornbuckle, founder and CEO of Sage Oak, the future is rooted in smaller, more personalized settings that feel less institutional and more home-like. In this Changemakers interview, Hornbuckle discusses Sage Oak’s “scaling small” philosophy, the staffing pathways needed to meet future demand, why development remains constrained and how senior living providers can test change through the lens of both customers and staff.
What economic forces or market trends are currently changing the senior living industry?
I think the main thing happening economically is that we’re starting to see a fairly soft job market. Anytime you’re in a labor-intensive industry and the job market starts to soften, it often becomes easier to hire talent.
From our perspective, that is part of the counterfactual to the traditional conversation around senior living doing well in recessions. The labor market is providing more talent from other industries, and some people are considering health care roles who may not have considered those roles in the job markets of years past.
In what ways do you think senior living operators need to change for the incoming generation of older adults?
I think what will be wanted, desired and necessary for the future is a high level of personalization. The size of the building, the footprint of the building and the number of residents under one roof are almost always inversely correlated with your ability to personalize.
I think a move toward additional market share for smaller settings is potentially what’s necessary for the industry to change.
How can senior living companies change the public’s perception of the industry?
I’m not sure I agree with the premise of the question. With occupancy climbing and more people living in long-term care settings than ever before, I don’t think this is the moment to focus on changing perceptions.
Instead, we need to focus on tightening operations, working on HR matters and developing more beds. As an industry, it seems like we’re finally headed in the right direction. We should acknowledge that, and we should also acknowledge that whatever the industry is doing now post-COVID is proving effective.
Tell us about some of your recent efforts to change the senior living industry for the better.
We’ve done some acquisitions recently, growing our community count and bed count by about 20%. But we’ve done that while remaining very focused on scaling small.
All of our acquisitions have been between eight- and 16-bed communities. We’ve bought several of those either adjacent to one another or close to existing Sage Oak locations. From our point of view, the way we’re trying to innovate is by scaling something that larger institutional players don’t seem intellectually interested in learning how to scale.
Ultimately, it is very hard to scale small buildings. The solution to that is a more portfolio-based approach.
What staffing changes does the larger senior living industry need to make to meet the staggering level of demand ahead from new residents?
We work on this 30 to 40 hours per week. The challenge is that two things are true, and they are at odds with each other: most buildings are not adequately staffed from a ratio perspective, and there is already a shortage of staff.
At the micro-site level, the answer is that we need more staffing, especially as more dementia care residents come through the pipeline and require more attention. But in order to create that additional staffing, we have to build new pathways for people to enter the application pool. That means reaching people from other industries, including those affected by layoffs, and creating clearer paths into long-term care.
At the national level, I also think we need to support immigration reform that allows immigrants who want to chase the American Dream to use long-term care as a vehicle for that pursuit. The same demographic evidence that tells us demand will remain strong also tells us we do not have a sufficient makeup of caregivers, nurses and other health care professionals to meet that coming demand. We either have to attract people from industries that are shedding jobs or bring new people into the country who want to do this work.
The other challenge is that staffing conversations are also affordability conversations. In other industries, minimum wage debates are often framed around whether someone would pay $1 more for a pizza or a hamburger so the person making it earns a living wage. That can be a compelling argument. But in senior living, the same basic question becomes much more complicated. Who is ready for $15,000 or $20,000 a month assisted living? We have to be honest about that tension as an industry.
Is the senior living industry moving quickly enough to change in the ways it needs to?
It definitely isn’t, but I don’t necessarily assign bad intent or mistakes to that. The timing of COVID made it nearly impossible for the industry to remain on track. We were pinched by declining demand, high construction costs and higher interest rates, and those were all difficult challenges for the industry to absorb at the same time.
The change that is needed is pretty clear: we need more beds and we need more staff. But both of those have to be developed, and development runs on a three- to five-year lag. Even when conditions start improving, it takes time for new supply, new models and new pools of team members to catch up.
If COVID had not happened, we would definitely be more on track. But the real question is whether we can keep pace with demand and whether we can keep pace with the development of new pools of staff and team members. Right now, the industry is not keeping pace, but the pandemic and the way we responded to it created a situation where there was almost no way we were going to remain on track.
Can you talk about a time when you tried to execute a change? Things didn’t go according to plan. How did you pivot? What did you learn as a leader?
Assisted living and dementia care operations are dynamic environments. Change is constant. No day is identical to the day before, and no two nurses or caregivers are ever going to be exactly the same.
Ultimately, pivoting is baked into the business model. People sometimes talk about pivoting like it is a huge accomplishment, but the reality is that it is literally part of what we do for a living. In order to be great at this, you have to be flexible. You have to be willing to pivot and change.
It is similar to the old Mike Tyson adage: everyone has a plan until they get punched in the mouth. In this business, getting punched in the mouth can be both figuratively true and, occasionally in dementia care, literally true.
What’s the biggest change you ever made in your career or life? How did it go and what did you learn?
The biggest mindset shift for me when I joined the industry was understanding how vulnerable direct care staff can be, and that this vulnerability is a problem operators have to help solve.
When I say vulnerable, I mean vulnerable to economic changes and disruptions in daily life. Many direct care staff are one flat tire away from needing a loan from the company or being unemployed. A substantial portion are one breakup away from being housing insecure. That changes how you think about leadership.
An operator’s job is not just to staff a building. It is to solve problems for vulnerable team members so they can be retained, supported and become vibrant members of the team for long periods of time.
That was a major shift coming from other environments where people were commissioned, self-directed and motivated in a different way. Moving into an hourly workforce environment with many direct care staff required a different mindset. The types of help, assistance and protections a company like ours needs to offer are substantially different from what many other industries require.
What senior living technology do you find most promising or interesting right now?
I am warming up to several technologies, including AI-based scheduling software, AI’s role in designing programming and the new mobile robot toilet for bedside toileting assistance.
What advice do you have for other senior living companies implementing their own changemaking efforts?
Always test-drive concepts from the customer experience or staff experience.
As a company grows, people roll out all kinds of initiatives for staff and clients. But in my experience, they often do not actually replicate the experience of the person they are trying to reach.
If you put out a social media ad, what is the customer experience when someone clicks on it? Where do they go? What happens next? If you roll out new HR software, what is the staff experience with that software?
You always have the best intentions, but you have to get out of the intention space and see how it actually gets executed. You’re trying to solve a problem when you roll something out, but you don’t know whether it will solve that problem until you test-drive what the customer, staff member or intended target of the initiative is actually going to experience.
What trend in senior living or the larger world are you sick of hearing about?
Artificial intelligence and data centers.
If you didn’t work in senior living, what would your career be?
Stand-up comic, lol.
What book are you reading right now?
I’m reading Dwight Eisenhower’s biography, Eisenhower in War and Peace.