One thing needed to change. Sloan Bentley knew that for certain.
Lutheran Life Communities employed Bentley as CEO to information the corporate by way of the COVID-19 pandemic, and one of many challenges she confronted was lowering company staffing spend. In 2023, Lutheran Life (LuLife) spent $4.7 million on company assist throughout its portfolio, with quite a lot of that staffing going to the corporate’s 376-bed expert nursing facility in Arlington Heights, Illinois.
That was an unsustainable price and, in impact, an unsustainable workers. Bentley needed to discover a approach to cut back that price and enhance workers retention whereas nonetheless bringing prime care to residents.
“Within the final 4 years, we’ve needed to change our enterprise mannequin and technique fairly a bit,” Bentley mentioned at LeadingAge 2024. “If I had a greenback for each time I had heard within the final 4 years, ‘We’ve all the time accomplished it like that,’ I might re-finance the group.”
What she did was look at 5 of LuLife’s prime partnerships, resulting in a dramatic re-shuffling, together with outsourcing its HR.
In bringing HR providers to ProCare HR, LuLife realized a number of advantages and realized 4 key classes they’re using transferring ahead.
The challenges and concerns of outsourcing administration
Bentley is aware of the primary query that operators are prone to ask when interested by outsourcing: “What’s in it for me?” Outsourcing can appear to be a risk — till you see the advantages, reminiscent of price financial savings or improved operations.
These outcomes received’t occur instantly, after all, and Bentley made be aware of 10 key challenges that operators should overcome when outsourcing:
- Lack of management
- High quality management
- Integration points
- Cultural variations
- Hidden prices
- Communication boundaries
- Scope creep
- Information safety and privateness considerations
- Dependence on exterior suppliers
- Restricted flexibility
She additionally cited 4 massive areas of impression that outsourcing had on LuLife, and among the many 4, two had been collectively difficult to navigate: staff member morale and tradition consistency.
“We began out with 1,100 staff members, we’re right down to 750, as a result of once you outsource, a few of these staff members go to be staff or staff members of the accomplice,” she mentioned. “This can be a massive shift for a company.”
How 5 outsourcing methods drive 6 key outcomes
To navigate these challenges, LuLife follows a collection of steps and methods for outsourcing success, all backed by a daring proclamation that comes from true self-understanding.
“I all the time say: you don’t need to be our accomplice,” Bentley mentioned. As she would inform potential outsourcing companions: “We’re slightly demanding. We’re very skilled, however we’re intense.”
“That was my line and it was efficient,” she mentioned.
That self-understanding was central to LuLife’s outsourcing journey. They knew what they needed and so they knew find out how to get there.
“We knew that there can be an ROI or we wouldn’t entertain outsourcing presently,” she mentioned. “You might entertain outsourcing due to an absence of expertise, chances are you’ll entertain outsourcing since you don’t need to spend money on the programs: the AI, and so forth., that different organizations would possibly carry to your desk. However for us, the mighty greenback was the driving power.”
To attain that ROI, LuLife adopted a collection of methods, together with:
- Every outsourcing operate required a full marketing strategy
- Every potential outsourcing accomplice needed to bear a full RFP course of, with no taking part in favorites
- LuLife centered on tradition adaptation together with compliance
- The scope of labor needed to be backed by KPIs
- The accomplice needed to bear quarterly enterprise critiques
A last key was that LuLife would champion one key accomplice in every outsourced partnership.
“This elevates the scope and breadth of the outsourced accomplice,” Bentley mentioned. These 5 companions had been Thomas Delicacies for eating, Prelude for IT, Plante Moran for finance, Richter Associates for AP/AR and ProCareHR for HR.
All of this work has helped drive six key outcomes:
- $250,000 annual financial savings, with a projected $1 million financial savings on company dues
- 95% new rent retention
- 49% discount in open positions
- 60% discount in clock creep
- Outsourcing prices are $2.4 million, or 45% decrease than earlier in-house staffing prices
- Total discount in company workers of $2.5 million and 38 FTEs
“ProCare has been an awesome accomplice, and we’re not a simple supplier for them,” she mentioned. “However we knew we needed to decide and alter quickly as a result of this impacted everybody on the group. They usually had been on the desk serving to us with that integration plan.”
The 4 classes realized from efficient and environment friendly outsourcing
In the long run, LuLife’s outsourcing journey has produced 4 key classes:
- Associate and vendor choice is essential
- Each events should adhere to enterprise norms
- No accomplice is ideal: work collectively to excellent deliverables
- Human nature applies to the very best accomplice too
“There have been days when there have been no openings in scientific. That’s superb when you’ve got 40 nurses on a shift. That’s unbelievable,” she mentioned. “We’ve had some days when now we have no company in that constructing. That’s a miracle. I’m very grateful.”
This Views article is sponsored by Lutheran Life Communities. To study extra about outsourcing, go to them at lutheranlifecommunities.org.
