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Study: Subsidizing wages at long-term care facilities would cut turnover
Date:7/21/2011

CHAMPAIGN, Ill. Subsidizing the wages of caregivers at group homes would likely reduce worker turnover rates and help contain costs at long-term care facilities, according to new University of Illinois research.

Elizabeth T. Powers, a professor of economics and faculty member of the Institute of Government and Public Affairs at Illinois, says that a government-sponsored wage-subsidy program could reduce the churn of low-wage caregivers through group homes by one-third.

"High rates of worker turnover have costs, and there aren't a lot incentives for the agencies that operate group homes to reduce worker turnover, given the environment they operate in and the potential mobility of workers," she said. "Although there's not much gain to providers from reducing turnover, the high turnover rate may have costs to clients, in that it negatively affects the quality of their experience."

The research, published in the Journal of Disability Policy Studies and co-written with Nicholas J. Powers, an independent scholar who holds a law degree and a doctorate in economics, uses data from long-term community-based residential services for persons with developmental disabilities to perform a cost-benefit analysis of a policy to reduce high worker turnover through wage subsidization.

According to professor Powers, the paper is one of the first studies to show how sensitive worker turnover is to wages in the long-term care industry.

"In these low-wage jobs, people really need the money they earn to live," she said. "They don't have any kind of financial cushion to speak of, so they're very sensitive to the wage. If the wage is low and they don't like something on the job, they'll walk to another employer. But if the wage is good, they'll stay."

For this type of service, there are "psychic as well as practical costs" to employee turnover, she says.

"Nobody likes change; nobody likes to have everything be diff
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Contact: Phil Ciciora
217-333-2177
University of Illinois at Urbana-Champaign
Source:Eurekalert  

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