12 Oaks Doubles Staffing and Accountability After Reaching Community Marker 20

12 Oaks Senior Living has made major changes to its senior living strategy to focus on income, growth, and working life.

The first step in changing its strategy was on the talent front, according to President Greg Puklich, as the company raised pay rates to remain competitive in its markets and also focused on hiring, training and retaining employees.

“This is the baseline that we needed to establish in our budget with ownership groups,” Puklich said in an interview with Senior Housing News. “Our job is to do everything we can to hire, train and retain quality employees.”

This new baseline comes in the form of an internal work culture that empowers leadership in the field and is designed to recuperate after a tiring year of burnout and pandemic fatigue, Puklich said.

“We knew how important it was to restore the job base and stabilize it for our ownership groups,” Puklich said.

12 Oaks of Dallas, Texas has 21 communities in six states.

Focus on staffing, performance reporting

In recent years, the pandemic has hit the industry with a “double whammy” in the form of labor and employment problems. According to Puklich, operators in 2023 must be able to deal with these impacts.

To address some of these challenges, 12 Oaks is centralizing recruitment across its entire portfolio. In both January and February, the operator reported more than 100 new hires each month, marking nine months of positive growth in its employee base, Puklich said.

“We are filling vacancies, changing the payroll system and moving to an active planning plan, and we are going to fill vacancies and control overtime better,” Puklich said.

New hires to the company’s leadership team include a VP of Consulting Business, a 12 Oaks Solutions consultant, several sales consultants and a solution consultant.

Puklich said that with staffing pressures eased thanks to the hiring drive, frontline workers will have more time to focus on their day-to-day tasks rather than constantly looking for new challenges, as was common in the early days of the pandemic.

With fewer fires to put out on a regular basis and a staff that is starting to return to normal, 12 Oaks can better focus on making its community teams more budget and staff accountable. In fact, it’s the key to making a company’s operating model work.

“More attention needs to be paid to staffing in line with budget levels and staffing,” Puklich said. “It will be about accountability and better control, visibility and transparency, all of which will help stabilize work.”

By using this approach, the company was able to reduce overtime costs and effectively eliminate the use of agency staff.

With new budget requirements, 12 Oaks is able to more accurately track overtime rates and be creative in staffing its communities without agency work. Puklić said that new budgetary requirements and systems to deal with personnel issues are the most important priorities before the end of the year.

By improving employee training and implementing new sales methods, 12 Oaks has been able to grow its portfolio.

At 12 Oaks in January and February, occupancy levels were “significantly in excess of our budget,” Puklich said. He added that the company is achieving its demand targets along the way.

The emphasis on learning and new sales comes from working with Sherpa, who led a team of 12 Oaks executives in sales training workshops.

“The real focus is on energizing the marketing staff, ED, and using relational selling techniques,” Puklich said. “We have seen this come to fruition over the past two months, surpassing our budgetary targets, and I am optimistic that this will continue.

Puklić said that solving the personnel problems would greatly contribute to the increase in the company’s profit. And he sees a broader industry able to return to 30% margins, but not much higher.

“To get margins, you need to stabilize staffing, and we are seeing all these key performance indicators recover and then affect margins,” Puklich said.

New growth plans for 2023

As the company achieves several goals this year, 12 Oaks is also expanding.

Puklich said the goal in 2023 was to reach “more than 30 communities”, with most of the growth coming from the management of distressed properties that will eventually be transferred to other operators and sold. A portfolio in this range has advantages of scale, but is also not too bulky to manage a small company.

The company already manages some distressed and dispossessed communities thanks to its Fannie Mae approved property manager status. Regionally, 12 Oaks has communities in Texas and Oklahoma, but its new growth is centered in Arizona, Massachusetts, Nebraska and Wisconsin.

“We believe there will be more opportunities like this,” Puklich said. “It’s part of the business plan to get these troubled communities involved, stabilize them, and map out where they should be sold in the next two years or so.”

Recent growth also includes the addition of 166 IL and AL units under the management of The Inn at Los Patios, a community in San Antonio, Texas.

When the company covers 30 communities, Puklich estimates that about a third of the portfolio will consist of such refurbished properties. This is partly due to the current sluggish market for stabilized assets.

The ability to rebuild communities stems from its operations team and solution consultant team that is deployed to new sites. 12 Oaks is tasked with running “like a SWAT team” to begin the recovery process.

“That’s where the opportunities are for us in the short term,” Puklich said.

Puklich said future long-term growth will be driven by equity partner acquisitions and 12 Oaks onboarding to run communities as the transaction market stabilizes and operations improve.

“We have to keep the line and implement programs to continue our growth and improvement,” Puklich said. “We need to attack the financials and bring the whole team together.”

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