Ready to put the COVID-19 pandemic behind them, senior living executives are preparing to push forward with growth plans — some in surprising ways, according to the newly released results of a recent Ziegler CFO Hotline survey.
The poll looked at how growth plans have unfolded during and after the pandemic, soliciting responses from more than 200 chief financial officers and finance professionals, primarily from not-for-profit senior living organizations.
Organization plans for growth over the next two years range from the predictable to the unexpected, according to a recent blog post from Ziegler Director of Senior Living Research & Development Lisa McCracken.
Many organizations are looking to expand the number of units they offer (54%). McCracken said that the finding has been fairly consistent over the past few years, although the figure has dropped from a high of 64% in March 2020.
The most recent survey yielded the lowest percentage of organizations reportedly exploring new campus development as a way to grow — dropping from 26% in 2020 to 18% now — whereas a commitment to affiliation and acquisition strategies increased from 25% in 2020 to 32% now.
Under a new category of satellite campus development, 12% of respondents indicated that they intend to move in that direction.
Although the percentage of providers interested in expanding home- and community-based services platforms doubled after the onset of the pandemic — jumping from 14% in 2020 to 28% in 2021 based on an increasing demand for such services — that momentum has slowly declined to inclusion in 19% of plans today, according to Ziegler.
Waning interest in HCBS, McCracken said, may be a function of decreased interest in that particular growth strategy or a sign that organizations already have executed their HCBS growth initiatives.
Barriers to growth
But participating organizations’ financial professionals conceded that their employers still face barriers to growth.
Workforce shortages continued to top the list of challenges facing operators (cited by 95% of respondents), but financial costs of growth (94%) edged out construction pressures (87%) for the No. 2 spot.
Other potential challenges mentioned by executives remained unchanged from previous survey findings, including operational and financial struggles within their organizations, resource limitations, issues related to the ability to access capital, and overall reluctance by boards to adopt growth strategies.
Despite those potential barriers, 56% of respondents who already had projects in the pipeline indicated that they were moving forward with their plans. An additional 10% of respondents indicated that projects had been scaled back, 25% said they had put their projects on hold, and 9% cited that they were doing a combination of both.
