What Performance Metrics Should a Home Care Agency Be Tracking in 2024 and Why (Jensen Jones)

[ 00:00:06 ] All right. Welcome, everyone, to Home Care U, brought to you by Careswitch. I'm Miriam Allred, your host. It's great to be back with everyone. Today, I'm joined by Jensen Jones, the CEO of Home Care CEO. Jensen, it's my pleasure. Thanks for being here with me today. Thanks for the invite, Miriam. Well, let's get going. Today, we're going to be talking about KPIs, business metrics, whatever you call them in your business. That's what we're going to be focused on today. Before we jump into the episode, Jensen, I think you're pretty well-known in this industry, but as always, there are newcomers and new faces. I'd love to give you some space to introduce yourself, talk a little bit about your personal background, your journey to home care, what you've been up to lately.

[ 00:00:50 ] Then after that, we'll talk more about the Home Care CEO Forum and those masterminds. Why don't you give the audience a little taste of yourself and your background. Sure. No problem. Originally, I didn't come from home care. I came from outside the industry. I was working for this large Fortune 500 company, running about a $65 million piece of business. During that time, I was moving up the corporate ladder, decided to go to school to earn my MBA, and the universe just had a different path for me. In 2015, I was a business consultant at a company called Home Care. I was a business consultant, and then in 2014, my dad was diagnosed with stage four stomach cancer. During that time, I was full-time MBA and traveling between the offices. I ran the Pacific Northwest at that time, Alaska, Washington, Oregon, Idaho, Wyoming.

[ 00:01:38 ] My boss was actually located in Colorado, and our headquarters was in Florida. There was a lot of travel. Essentially, I was taking my dad to his appointments, and then as the cancer progressed, became more of his caregiver. At that point, something had to give. So, at that time, I made the decision to go ahead and leave work. My personal values are family, education, and service to others. So, it's no surprise when you look at the values of Home Care CEO Forum, it's community, education, and service to others. I try to stay close to my core. But I took time off. I actually ended up taking two years off. So, I cared for my dad. And during that process, I was never actually exposed to home care.

[ 00:02:22 ] And so I cared for him through the end of his life, which was a lot, a lot of learning from dad. Shortly after that, though, I, you know, we were focused on dad. I noticed something was going on with mom. And I think it was four or five months after my dad had passed, she was diagnosed with early onset dementia. So, then I became her caregiver. With lessons learned, we got the estate set up and started planning and doing all those things. And after I'd finished my degree, you know, I love my mom to death, but I had to get back out there and get working. So, I started looking for care. And that's when I ran into home care. And serendipitously, there was an owner in Seattle who wanted to grow his business.

[ 00:03:11 ] It was a single office. And he hadn't had experience with multiple offices in the past. And we talked, and I said, 'Oh, yeah, we can grow this thing and expand it.' And at the same time, I'd be able to have care for, for my mother through the organization, which was great, because there was all learned there as well, too. So, we expanded that business into three offices, three counties, and ended up selling in 2020. My mom is still doing actually fantastic, which is great to report. And during that process, we were actually a part of the home care CEO forum when Steven Tweed was running all the groups. And that's how I got introduced to the home care CEO forum. So, we moved up through the group to the 7% group before we sold.

[ 00:04:01 ] And shortly after we sold, I get a call from Steven, and he was inquiring if I'd be interested in facilitating, becoming more involved in the Home Care CEO Forum. And, you know, I said, Absolutely, let's go ahead and grow some of these groups. It was the middle of 2020. And I thought, you know, I'm going to do this. And I'm going to do this. And I'm going to do this. And I thought, if we can grow this, you know, during the pandemic, you know, I don't really have anything to be worried about. And so, I facilitated for two and a half years, and in January of 2023, purchased the Home Care CEO Forum. And so now the Home Care CEO Forum, really, it's just a place where owners come to share industry insights, discussion topics, solve problems, develop strategies for growth.

[ 00:04:44 ] Essentially, we're helping owners figure out what their next best step is in regard to growth. All of our members have a growth mindset and are in the season to learn. So, they're, you know, during discussions, if people are making commitments, we'll hold you accountable to it. But we're also going to help you through it to grow your organization. We currently have four levels of our Mastermind groups that are comprised of non-competing agencies. The first group is our Strategic Growth Group. And those are agencies between $1.5 million and three and a half million in annual revenue. The 10% group is three and a half to six and a half million in revenue. 7% group is six and a half to ten, and then our top 5% group is 10 million plus.

[ 00:05:28 ] We actually have two groups for strategic growth. And it looks like we are going to split the 10% here shortly. This last year has been pretty great for the CEO forum. We really try to create a community feel. So, a lot of the members outside of their own group know each other and connect and share strategies. So, it's been, it's been a fun journey. What a journey. Holy cow. I hope, yeah, I don't know if a lot of people know that full story, but just like you said, you know, I think home care comes to all of us when we're least expecting it. A lot of us from, you know, personal examples, family members, relatives, neighbors going through it, but, you know, look at the last decade for you, you know, coming full circle from caregiver to now leading some of the top agencies in the country and in this industry.

[ 00:06:16 ] I think that's incredible. I think that's incredible. And I'm glad you just broke down the different mastermind groups, because what we're going to share today, you can speak from really every lens. Like you said, there's that strategic growth group, which, you know, is that 1.5 to a 3.5 million all the way up to, you know, the 10 million plus or that top 5% of the industry. So, you are regularly conversating with really every different, you know, kind of owner profile size in this age in this industry. So, I'm excited for a really rich conversation. Today about KPIs. Before we start, you know, kind of disclaimer for everyone listening to this: If you're listening, and you're hoping for, you know, a KPI blueprint, a template, you know, a scorecard, a framework, apologies in advance from Jensen and I both, but that does not exist.

[ 00:07:05 ] And that's not what we're going to give you today. I think, you know, in thinking about it, you know, it's probably your mantra. I'm sure Jensen people approach you all the time, like, 'Give me the silver bullet,' 'give me the scorecard,' 'give me the framework.' But I think you and I both agree that that really doesn't exist. And everybody wants it. But we're here to kind of set the record straight and talk about, you know, some of the universal concepts, but also just like the fluidity and dynamics of home care aren't conducive to that. So that's what we're going to kind of demystify and jump into today. So here at the start, you have done a ton of research about KPIs. And I'm curious, you know, how did you go about that research?

[ 00:07:42 ] And what were some of the biggest takeaways that you found in your research and kind of study of business metrics? Yeah, you know, I would say that really the catalyst of the research started when I became involved with the mastermind groups. You know, we speak with agencies all around the country, there's over 50 agencies. And of course, you know, one of the questions that we always get is, what are the KPIs? What's the list? What's the magic solution of the things that I need to be following to make these decisions? And so it’s through that, through those shared KPIs, you know, I had my previous KPIs and I work one-on-one with agencies as well and do some deep dives.

[ 00:08:24 ] And really, I think that's what's helped is to figure out, you know, and I say this quite a bit is, you know, we need to know where you're at before we know where you're going. And so when I do my deep dives within organizations, there’s a lot of very specific questions I ask around lifetime value of clients and referral partners and caregivers and really looking at the things that we need to do to help manipulate behaviors in a way that's going to help grow revenue. And so, I think a lot of it was just over time collecting and having these conversations. I have some specific tools that I use to record all the data, and they're consistent tools.

[ 00:09:10 ] So the more and more I've been working with agencies and collecting this information, I've been able to kind of extract some different ways of looking at KPIs to create influence in the organizations. Yeah. So now, no doubt there's trends, you know, I'm sure you could dial out like very specific trends that you see across different orgs and different regions, et cetera. But like you’re saying, there’s so many nuances to the business, to the market, to the employees, to the culture. Like there’s so many factors that you can't really, you know, laser in on a specific scorecard. Yeah. And that was. Yeah. Sorry to interrupt. That was one of the biggest takeaways too, is, you know, I'd look at these KPIs and either they were too general or they were like task-specific where it wasn’t like an overarching key performance indicator that was going to drive the results that you wanted, right?

[ 00:10:07 ] Like a good KPI is going to trigger multiple actions to happen, right? Within a workflow. And, you know, and if they’re too general, they’re not specific. They're not specific enough to really, you know, influence the revenue maybe in the way that the owner's thinking versus the person who's figuring out how do I end up in good standing at the end of the month, right? So, you know, I want five new referrals every week. Okay. Well, to an owner, they're thinking that'd be great if we can get some 86 hour or 168-hour clients and, you know, to maybe someone who's out marketing that's, hey, I got to make sure I get five, you know, three or four of them are hospice. And one of them's a short, short term or short hours.

[ 00:10:50 ] That's still my, my five I have to hit. And so, it's really about getting a little bit more specific within that to drive the behavior, to get the revenue results that you want. Yeah. You've already mentioned that a couple of times, like driving behavior. Like that's something that I've heard you share multiple times is just KPIs should drive behavior. And I think that's like an underlying message here is, you know, they're not just numbers. They're not just like statistics or trends. It's like a measurable that's actually driving, uh, behavior at the end of the day. Right. Yeah, absolutely. I mean, I think the two main goals of KPIs, um, at least for me when I'm working with agencies is yeah.

[ 00:11:26 ] Uh, what, what is the behavior that you're expecting out of setting this expectation and is it tied to revenue growth and revenue generation? Yeah. So, so digging in a little bit there, I mean, that's pretty specific. Like every KPI should influence revenue. I think another thing I've heard you say is like cost savings, you know, either the KPI is, is driving like revenue growth or it's also contributing and or contributing to cost savings. Are those like relatively universal from what you've seen? Yeah. I mean, in regard to cost savings, you just want to make sure that you're covering whatever the expense is to either hire or sell, or, uh, I mean, those are the two main funnels, right? You have your client funnel and then you have your caregiver funnel and then you're, uh, recruiting and sales teams are driving those.

[ 00:12:15 ] And so you just want to make sure that those KPIs that are tied back are, are driving revenue. It's not costing you because I guess one, not to get too into specifics yet, but one example could be, you know, you onboard a client and you still have a continued cost to provide services, right? So, let's say that initial investment's $2,000. Well, if an agency, and I'm just going to throw a random number out there, but if an agency is making $10 an hour in profit after direct expense, and you're spending $2,000, that's 200 hours of billing before you even hit break even, right? And then what do you consider a good client after that? Is it a hundred percent return? Is it a 500% return?

[ 00:12:58 ] And that's going to extend the number of hours that you're going to need to be able to bill in order to hit those expectations to consider it a good client. And if I have a client that's at 20 hours a week, that's going to take a heck of a lot longer than somebody who's, you know, at 40 or 80 hours a week. Mind before we do kind of get into it is, are there any universal metrics in home care? What would you say? Yeah. I mean, top-line revenue, gross and net, I think are really the only universal metrics. I mean, you could talk about hours, definitely a metric, but there's so many variations on how people look at hours. So, you could say, yes, ours is a KPI, but not everybody views them the same way.

[ 00:13:45 ] I would say retention as well too. And that's retention across caregivers, clients, and your admin staff, I think are all key parts as well. That's going to be cost-safe. And we know it's expensive to hire new people and train them. And every time you bring someone on, it could potentially change the culture as well too. So, I think having good retention strategies is also something that needs to be universal across the board. Can we talk about revenue for a second, particularly gross and net? So, you mentioned like baseline tracking both of those. I've come across a lot of agencies that are focused on gross. I don't know if that's like lack of business acumen or size, but I'm assuming you're saying gross and net always applicable.

[ 00:14:34 ] Are you seeing businesses that are focused too heavily on gross, or is everyone that you're working with focused on net? I'm just curious what you're seeing and what you recommend in that regard. Mixed bag, I guess, is the answer. Yeah, there are some folks who are really focused on gross, which is kind of difficult. I mean, you have your direct care expense. It's there, right? And to influence that, it doesn't get adjusted as easy as maybe your indirect expenses. So, we talk about gross. I mean, overtime is going to influence that, rate of pay, things like that, but it's not going to fluctuate. Well, it shouldn't be fluctuating a whole lot, right? It's like you should be able to know that if I'm billing this much, this is how much my direct expense and this is my gross.

[ 00:15:20 ] And then it should be consistent across the board how much you're making there. Again, maybe some OT and things might adjust it a little bit. But then it's that indirect expense that every agency owner is so different on how they spend their money, right? And so, I've seen operators that rent, for example, where it's $1,500 a month for an office and I've ran into operators that are spending $12,000. On an office. And that's just the way they choose their money. And that directly affects net, obviously. So, any adjustments you can make on the bottom of the P&L are huge as far as what your net percentage is going to be. Yeah. So, I'm guessing it's just the difficulty and maybe defining net is what hangs people up.

[ 00:16:08 ] Gross is obviously relatively easy to calculate, but net is where I think you're alluding to, it gets trickier. And so, I think maybe that's where it purely deters people. But I think there's a lot of value in, I think you're using the word like indirect, or I think of like variable costs. Like there are a lot of variable costs and defining those may take time or effort to put together a spreadsheet. But I think there’s a lot of value in knowing all of those variable or indirect expenses and then being able to tie those back to, like you said, when you think about calculating like lifetime value of a client, all of the factors that play into that. It's not just wage and rate. There's like so much more behind that, right?

[ 00:16:50 ] Yeah. And those indirect expenses, they just get tricky. For example, when you're talking about your admin staff, it's one of those things where, do I hire somebody and pay them, let's say $80,000 a year, right? Or $90,000 a year, who's a high performer, or do I have three admin staff who're making $40,000 a year, right? And that's costing more money. And it's also- So that's a higher spend. So, it's like, what decisions do you make in order to help cost-save and get the most value out of your dollars that you're investing as well too? And that's a simple one. So rent, I think even when you hire your admin staff, those are all decisions that folks have to make in regard to what their indirect expenses are going to look like.

[ 00:17:39 ] And it can be a challenge for sure. Yeah. Can I put you on the spot and ask about margins? I don't know if you have this off the top of your head. But just good rates for gross profit margin, net profit margin, what are you seeing? What's healthy? Yeah. So, I do. So, the Home Care Pulse benchmarking study pretty much has it correct. Well, obviously it's correct because it's shared by agencies out there. So, we're seeing, and even my one-on-one clients, gross. I mean, it's your margin. You have about a 60 to 63% direct care expense. Anywhere in between there is kind of what I'm seeing right now. And then when it comes to net, it really is all over the map.

[ 00:18:28 ] I would say a healthy net with some of these organizations that are growing, they're landing anywhere between 20 and 30%, which is high. But you're going to see that more on the private pay side. You're not going to see that on the Medicare side. And I've seen margins as low as, you know, seven and a half to 10% as well to net. But again, if you're a large Medicaid agency and you're driving volume, that's not as scary. Now, if you're a private small agency and you're sitting at, you know, 7% net, then there's probably some decisions that you need to make on your indirect expenses for sure. Yeah. That's validating this point of like everything's so fluid and dynamic, you know, a 20 to 30% net profit margin is healthy, like you're saying, but it's not uncommon or necessarily a bad thing to have, you know, seven to 10% margin.

[ 00:19:20 ] It's really just dependent on, you know, the business structure and the payer sources, et cetera. So, I think that was good just to kind of talk through like revenue, like you're saying, revenue is pretty universal. And I wanted to kind of go down that path of like gross versus net, because I also see it all across the board. And I don't, you know, there's not necessarily a right way or a wrong way, but just curious, you know, what you're seeing in these high performing groups of, you know, what they're, what they're doing or what they're not doing and where they're focusing their time. So, the way I want to kind of take this is talking about departments. Like we've talked about, like, there's no silver bullet.

[ 00:19:53 ] It's all very circumstantial, but you have worked, you know, single-handedly with a lot of businesses and a lot of really successful businesses. And you have also like dug deep into like departments and individual contributors and, you know, specifics of these different departments. So, I want to kind of talk through each kind of core department or function of the agency and let you share, examples, stories, you know, things that people are doing right or doing wrong and kind of just talk about all of that from the lens of metrics and how to establish those metrics within these departments. So, the one that I want to start with, we're going to categorize as HR, which really also buckets like recruitment and retention in most cases.

[ 00:20:36 ] So how do you see some experienced agencies, operators approaching kind of HR and HR metrics? Yeah. Oh, man, that's a tricky one. So, I can give you, I guess, just a couple of examples of things that we've looked at that I know tie back to helping generate revenue. So, for example, you know, I think one key metric is from application to first shift completion, right? So, we know through research, the longer that process takes, the less likely that person's going to come on board. You know, caregivers are economically fragile. They're not going to be able to do what they're supposed to do. They're not going to be able to do what they're supposed to do. And so, if I'm a person living paycheck to paycheck and I'm having to wait 10 to 14 days for a process or the agency across the street can get me working in five to seven, they're going to take that agency that's able to get them to five to seven, you know, five to seven days versus a two-week waiting because then they still have to wait for the actual paycheck to get processed after they worked.

[ 00:21:38 ] Right. So, it's kind of a heavy burden for them to bear if they're in between jobs. One example I can give is that I was working with an agency, and we were going through their process, and it was a lot, you know, we talk a lot, especially this application to first shift about reducing friction and not reducing friction for the agency but reducing friction for the caregivers. And something that I think my people are tired of probably hearing me say is besides the reducing friction is to I'm having a brain fog. Okay. That's okay. You're coming, coming off COVID brain. So, we get it. You're talking about, yeah. Reducing the friction for the employees or for the applicant. Right. Right. So, it's, it's, it's, it's a matter of like, how do we make it so simple?

[ 00:22:30 ] It surprises them. And that's what I was trying to say there. So, you know, what does that caregiver experience look like as they're onboarding? Or if you went through your own process, would you be excited about working for you? And I was working with this agency that, you know, they would have a phone interview. And then they would schedule an interview, but only on specific days and specific times. So right there created a barrier. And then, but before you came into the interview, there were four or five free, you know, sheet things that they had to fill out. So now they're doing that on their own time. And most of the time it didn't get completed anyways.

[ 00:23:03 ] And then they would have to come in, then go through orientation, finish the sheets and, and then go through the background check, which was taking, you know, another five, six days before even offering this caregiver position. And so, what we ended up doing really is we got rid of that pre-work and put it within the orientation, pay people for their time. It's not expensive, you know, it's, it's 30 more minutes, but that way there wasn't a barrier being set up to, to getting this thing done before I'm actually coming in. Availability, we changed that. We have to be flexible. We need to focus, it's really a, we've got to focus on the caregiver and when is it convenient for them, not necessarily for us.

[ 00:23:45 ] So, we opened up the availability to make it convenient for them to be able to come into the office. And then, now when they're in the actual orientation, they were, you know, it went from the phone interview, interview, a lot of folks as well too, will book the orientation on the backend of the interview. They're already in the office. So again, to break down another barrier of trying to reschedule and have them come back and, you know, God only knows if they pick up a shift or do something else. So, they can earn some income. And so, if you already have them there, they've, they've been able to add that to the backend and have that orientation go through. We changed the, the background, you know, we just went through a third-party company that checks it in the first 10, 15 minutes.

[ 00:24:30 ] You know, we, the expense was, was low enough that the free application was just causing too much of a delay, which could cause you to lose a client and not be able to provide care and have enough caregivers. So, we got rid of that. And now the process just flows really, really well. It's pretty simple. It's just the phone interview. You come in, if they can stay for orientation, they get paid for that time, they go through the background check. And before they leave, you already know that they're going to sit with that scheduler, pick up some shifts and then be able to get to that first shift in a timely manner. So that's just one example. Retention, I think again, as a universal KPI, I think is really important.

[ 00:25:10 ] And there's a lot of talk about the, you know, 90-day retention, which I think is important. But I think it's really important to have that kind of plan because that's your first impressions with them to get them excited about working with your organization. I worked on this quite a bit and I have a 90-day retention plan; what I used to call it. But I started thinking about it in a different way where, you know, we have these agencies where we're able to create care plans for every single client. And the reason why we create these care plans is so that they're happy and healthy and we can retain them for as long as possible. And it's, and it's the right thing to do. So, no one wants to be retained. And so now I call it a care plan for caregivers.

[ 00:25:50 ] So, you know, how difficult is it to create a 90-day care plan for caregivers? So, what actions and steps are you going to take in the first 90 days to keep them engaged and to have that communication, so they feel like they're a part of something bigger than themselves? And then the post-90 day. So, what's the care plan after that? I was working with an agency, and we were having a discussion about their retention in the first 90 days. And I was like, well, I don't know, I don't know, I don't know, I don't know. It was fantastic. It was really high. But when we looked at their turnover, so again, retention being the time you hire to the time they leave versus turnover, you're just looking at, you know, how many people actually left during a period of time.

[ 00:26:31 ] We started looking at the retention and noticed that 18 months, these caregivers were leaving. So first 90 days was solid. They were great 18 months, huge drop-off; they started losing caregivers. And it was the engagement really because they didn't have it. They didn't have a post-90-day care plan. And so, they were having a conversation about 90-day care plan set up to keep these caregivers engaged, so they become loyal to their clients. Something happens with the client; the client goes away, well the caregiver goes too because they no longer feel this connection with the organization, and so we developed a post-90-day care plan of interactions and communications in order to make sure that they felt like they were a part of the organization still, which was it was pretty unique.

[ 00:27:13 ] So I think looking at retention not just turnover is key, and then even in the hiring process, um, and this goes to the general you know we need to hire three caregivers; we need to hire four caregivers. I would take it one step further and say okay, well if I hire three caregivers at 10 hours a week, you know that's not the same impact as if I bring let's say two caregivers who are willing to work 30 hours a week or 40 hours a week, so it's also looking at the hours that you need to be able to cover and not just necessarily throwing bodies in there because we know that these shorter shift caregivers tend to have a shorter employment lifespan with

[ 00:27:55 ] with the agencies uh versus those uh we call them semi-professional professional caregivers who are working 30 plus hours and so it's really a matter of you know how you have those conversations with someone who potentially might come on to be able to get those larger hours and then another point and this again ties back to revenue there's a cost to onboarding and there's a cost to manage caregivers so uh I did uh exercise with I don't know probably about a dozen or so agencies in regards to What were their cost of onboarding was and cost of continuing to manage these caregivers, and a couple examples that came up, um based on that cost, was well in order for me even to break even, my caregivers have to work eight hours a week or they have to work 12 hours a week.

[ 00:28:45 ] And so we set an expectation to say, okay, well if they're not working at least those let's say 12 hours then you're actually losing money because that cost to manage them is more expensive. So, they set an expectation in their agency of a minimum of 15 hours a week in order for those caregivers to work. Um, it was really interesting because we went through their current Uh, roster of caregivers, and there was a whole bunch that were just an hour or two under, and they just something clicked; we started making phone calls, uh, to see if there's any way we can get more hours on the schedule and get those caregivers up so that way your revenue was in the black and not in the red.

[ 00:29:26 ] So it's just looking at it I think a little bit deeper to say okay, it's one thing to have bodies put in there or it's one thing to have these caregivers come on board; but is it also going to be healthy for the business? You know, is this going to be a long-term solution? And I, you know, I'm not going to act like it's this easy thing to hire Caregivers, I get it. But if you're setting up expectations of excellence and delivery of service, you have to think about how that's going to impact your brand in the market if you have all this turnover and now you know and you're losing money at the same time. I mean, that all does affect you as well too.

[ 00:30:08 ] Okay, a lot of great information in here but the one I think the area that I want to dwell down in is this care plans for caregivers. I'm not going to lie, this is the first time I've heard you say that maybe the first time I've heard anyone say that and it's kind of like this 'aha' moment, you know. We conduct reassessments or supervisory Visits for clients, and those are you know maybe in some states mandated to be checking in, you know. Do we have a similar process in place for caregivers, that's what you're getting at, is like how do we be checking in with them regularly? And I think just that concept of like care plans for caregivers, you know.

[ 00:30:42 ] And I've heard you preach, talk a lot about 90-day retention but look what you're seeing maybe agencies have started to focus on that and it's going really well, okay. But what about 180 days, six months, 12 months, 18-month retention? What processes, what metrics do we have in place to be focused on long-term retention? I think that's kind of the dynamic shift here, right? Yeah, absolutely. And you know, and the thing is, you don't necessarily have to create a plan for every single caregiver, but have a, you know, you have your 90-day plan, and then you have your what, your uh, you know, you have your 90-day plan, uh, 180-day plan or your 12-month plan, 18-month like, what are the things that you're doing so to go back to this agency um that had those folks leaving uh, besides the newsletter and you know the thank you cards and stuff, those are all great things they started bringing in caregivers

[ 00:31:33 ] um, and it didn't matter if they were new or old, but they started Bringing in regular feedback groups where they'd bring them into the office, buy them lunch, um, they would select a caregiver to actually be the person who's going to take the information because conversations change when mom and dad are out of the room, right? And so, they would leave the room and say okay, here's a list of questions. We call it a stay interview because it's really hard to talk to people after they leave. So there's actually you know five questions in any standard stay interview, and you can add a couple more on there if you want feedback and feel free to Google it, it's out there, uh, and then they would Ask those questions and one caregiver would report all the findings, and then they would come back in and receive the feedback from the whole group through that one caregiver right?

[ 00:32:22 ] And so now the caregivers felt like they were involved and that their feedback was being taken into consideration, and it was something that was consistently happening where you know eventually over several months it if you know everyone either had touched it or been in one of those or had heard about it from another caregiver that oh they're doing this thing now, and so they felt like they mattered and we know that's important, that's awesome. That's a great example, and I'm glad you brought that up because I think like stay interviews, you know, some people are conducting those having a caregiver maybe take the lead on that environment to really get that transparent feedback. I think that's an incredible idea for people to pick up from this, I'm sure you've seen this as well, really, you know, sophisticated larger organizations are focused on culture and are focused on retention it's not uncommon to see an agency, you know, that's thriving, them

[ 00:33:14 ] retention rates are incredible like they're holding on to maybe 50, 60 of their people for three to five you know years plus and so I think you know focusing on short and long-term retention go a really long way so don't you know I guess what I'm maybe picking up is like don't get so hung up on the 90-day retention I think that's a great place to start especially if you're seeing the turnover or the drop-off at around 90 days but if you are holding on to people you know make sure you're putting these processes in place to really keep an eye on longer-term retention as well and you know I understand there's a cost and sometimes it's hard to get caregivers in the office especially if you're in rural markets too I have Uh, one agency that does it a little bit, you know, more unstructured.

[ 00:33:58 ] I mean, they're there on these calls with these caregivers every day, you know, with the schedulers and the people in the office, and so they'll incorporate one or two of those state questions on a call while they have them just to get feedback real-time, and so there's consistent kind of ongoing will keep continue to ask these questions uh as these calls come into the office, so you know, there are other solutions where it's like, okay, it'd be great to get the group together, but if you're not able to do that, you can still gain that feedback from just asking. Those questions if they’re already on the call, right? Yeah, bake it in wherever it fits and arguably that’s probably the most important interaction you have with them is yeah, they may be calling about scheduling or their paycheck but yeah

[ 00:34:44 ] getting those questions when you have them and that will leave like the lasting impact on them of like oh wow they’re actually checking in with me, you know care about me and my well-being so you know making a time and a place for it like you’re saying like you know it’s not like one size fits all but making a time, making the time and the effort goes a really long way in in long-term. Retention, let's um, let's keep going. I-I, you talked a lot about like applicant to first shift, obviously there's a lot there, but I think you broke that down really nicely; like, there's so many steps in for ways to optimize every single step in that process, you know?

[ 00:35:18 ] Maybe even have a metric around each of those steps, have a metric around how long it takes to hire. I think you covered that really well, but that's another just really like natural place to push KPIs and metrics to really like laser in on that process and make sure it's like a fluid, but also be, you know, timely and like you're, you're making sure people are pumping through. That process seamlessly so, so I think that was great. Let's uh, yeah, and something just a point to bring that up on KPIs as well too, and again I think sometimes we get bogged down with saying, okay you know how many applicants came

[ 00:35:51 ] in, how many calls did you make like all the little things and we're trying to measure all those things but no one can remember 20-30 tasks or you know it's just hard and so by giving them a okay, well we're going to look at time of application to first shift and we want it at this many days that's going to force them to complete all those tasks anyways right and so they know that I'm going to be indicated. From application to first shift, that's easy to remember, that's just one KPI that I'm going to be measured on, even though there's a lot of activity that goes along with that same thing. With retention and having these care plans right, like there's a lot of little pieces in there to get this thing done, but you know, I know I need to focus on this one big thing, retention, right?

[ 00:36:36 ] And so that's just kind of the way I look at KPIs, is just have it be big enough to trigger multiple things to happen, and you'll know if it's if it's working if they're doing the activity based on the results. Yeah, I'm glad you interjected with that. Before we jump to the next department, that was the question I wanted to ask you - like rule of thumb for how many metrics per individual or per department. I think that's maybe kind of what you're getting at here; you know, one person can't have seven metrics or even one department probably shouldn't so what would you say is like best practice or rule of thumb for individual contributors and then maybe for departments like how many are we talking

[ 00:37:19 ] yeah so you know when I look at each department I'm thinking I always try to focus on three which is really hard, you usually end up with five but by having a goal of three it really Makes me pare it down to what are the most impactful things that I need to have these people focused on in order to get the results that I want, you know. And so, the way I look at it is, each department has three to five KPIs. Um, then the person who, whether it's your COO or your office manager, they own all of those metrics within that department in in that office. Does that make sense? So, if you're able to keep it to three or five and you have five departments, you know you're going to end up with, maybe 25 maybe metrics which seems like a lot but generally folks in that position had a little bit more business acumen.

[ 00:38:14 ] in they're Paid a lot more to be able to look at that and evaluate that information, and so it's one of the things where you know this department owns this, but you get to own all of these KPIs, yeah I think that makes sense and that's natural like, like KPIs roll up, I think what you're getting at is like, you know individuals can be accountable to metrics, and then there's team maybe department metrics, and then the leader of that department or like group of departments, like they roll up to that person and they have like, you know full ownership over them, it's broken down by the individual contributors, yeah, and it's hard

[ 00:38:48 ] so in to answer you’re the other part of your question is how much the individuals have so if you have let's say three to five key metrics for a department, I wish I could tell you like there's a specific amount but every department, like position is so different in what people are requiring them to do right, so if I'm labeled a recruiter that can mean 20 different things, right? Am I only recruiting or am I recruiting and doing retention, am I recruiting, orienting and working on the retention plan, am I also doing these other things, so it really that varies and so it's really hard unless you are unless I'm working with someone like individually To say okay, here's the main metrics but this person is we're going to add this thing on since you've incorporated this responsibility within that that job.

[ 00:39:37 ] I think the reminder that's coming to mind for me is tying it back to behavior and outcomes, you know if this person if this individual contributor had to be accountable or responsible for one outcome like what would that be you know maybe they're wearing five hats but if they had to drive one or two outcomes like what would those be what do those need to be for the business bringing it back in that context. I guess I'm speaking to you from experience, you know I came from Homecare Pulse, uh, you know we're big, big fans of EOS and we had scorecards, and it was it was very much that like speaking from personal experience, you know I, I had maybe six or seven, six duties or responsibilities.

[ 00:40:17 ] But at the end of the day, I was accountable for two metrics. And those were the things that I had to produce every single week. So, I think that's a way of framing it off, you know, maybe one to three per individual contributor, but it doesn't mean that they're bound to those metrics, like they can be accomplishing more tasks, more functions. But if, if you want them to produce outcomes, you know, make sure they have metrics tied to those at the end of the day. Yeah, that's exactly right. So, let's, let's jump to sales and marketing. This is probably the most tracked department. So maybe we don't need to spend a ton of time here. By nature, sales are very, you know, goal-oriented, KPI-driven.

[ 00:40:55 ] But talk through some of the, you know, some of the metrics you see or recommend in the sales department or any stories you have of examples of businesses implementing specific metrics and sales. Yeah, so I have two stories. Let me let me start with the stories first. And then I can go into a little more detail. So, I was speaking with an owner that was bringing on a salesperson and said, oh, you know, I'm bringing this person on, I want them to bring me five new referrals every week. I said, Great. I said, but what does that mean? For the business? What does that mean? It's like, well, I want five new clients every week. And I said, Sure, you know, I can go out and grab you, you know, three hospice clients or someone who has just got discharged that maybe we'll keep them in the bond service for a week or whatever and get those.

[ 00:41:41 ] But is that going to be profitable for your business? Is there not an expectation of, of hours or what you want these referrals to look like? So, he just didn't take it a step further. So, I said, 'You know, five referrals, they're going to get their five referrals.' Now, are they going to be the referrals you're looking for? Maybe, maybe not. So, you got to get a little bit more detailed in that. So, is it a there's so many ways of looking at this? You know, is it a, you know, is it a, you know, is it a, you know, is it a, you know, if they have a budget of hours, is there an expectation that 25% of those that come in for those hours are, you know, 80 plus hour clients, and then maybe 65% are clients that are plus 40 hours to 80.

[ 00:42:25 ] And then anything between 20 and 40, we only want 10% of those clients, because we know clients who have longer hours tend to stay on longer, obviously they build relationships and connections with the caregivers. And so, they just have a higher retention rate. Plus, their lifetime value, obviously, is pretty high. And but if you go and set those expectations, now, it's not just that that marketer has to look at their funnel a lot differently, right? To say, Okay, well, if my expectation is now I have to have this many clients over 80 hours, and this many clients between, you know, 40 and 80, I can't always just go to this one bucket, I need to start developing relationships with folks that have maybe more long-term chronic issues like Parkinson's, or, or an Alzheimer's, or any other kind of dementia that's out there, right.

[ 00:43:15 ] And so it changed, that is going to change someone's behavior. I had another agency that said that they were wanting to focus on dementia. And I asked them, I said, you know, how many, what percentage of your clients are dementia? I think at that time, it was either 40 or 50%. I can't quite recall. And I said, okay, well, if you want to call yourself a dementia care specialist, what if you set an expectation with your salesperson? And they said, Okay, well, if you want to call yourself a dementia care specialist, what if you set an expectation with your sales person and said, Well, you know, by the end of the year, we want 80% of our clients to be dementia, and you're going to be graded on that, well, that's going to change the behavior on the type of folks that they're going out to visit.

[ 00:43:49 ] So you can actually call yourself a dementia specialist, right. And we know along with dementia, you're going to get longer term clients as well, too, with ours. And so, it's, it's just taking that a step further to be a little bit more detailed to drive that specific behavior for that that marketer. Another thing I look at is, you know, we talk about growth and, and budgets. And I think that's great. And, you know, folks will say, 'Okay, well, this person has a budget of 20,000 hours this year that they need to bring on.' And so, we're going to grow. But I think sometimes we miss the fact that we're going to lose hours as well, too.

[ 00:44:27 ] It's like, for some reason, that concept doesn't sit with us like, 'oh, we're going to lose a bunch of these hours during the year.' That's just part of being in this business. And so, with an expectation of, you know, we're going to lose a bunch of these hours during the year, that's just part of being in this business. And so, we're going to lose a bunch of these hours during the year. So, with an expectation of, let's say, 20,000 hours for the year, how many of those hours are designated as net positive hours, right? From the floor. So, because you know, you're going to lose hours, but how many of those hours are going to be considered your growth hours, like that are actually being net positive on top of whatever hours that they're making up for the losses of hours during the year? Yeah, yeah, a lot, a lot here as well. I wanted to ask, kind of backtracking slightly, how many hours are designated as net positive hours during the year?

[ 00:45:08 ] How many hours have we talked about, like the hiring funnel, you know, applicant to first shift in the sales terminology? Are you a big fan of tracking like inquiry to, you know, start date for clients? Or what's your take on like, you know, pretty strict pipeline in that regard? Yeah, so I think a key thing for me, and this reminds me of another story. So, one of my tools, basically, we'll look at your referral partners over a period of time, generally a five-year look back. And we'll look at the number of referrals that have come through, the average length of stay for those clients, and then the amount of revenue that was generated. And it went through this exercise. And they had sorted it where we had this referral partner that provided like, I don't know, it was a lot like 30 referrals.

[ 00:45:55 ] But then when we looked at their length of stay and the actual revenue generated, it was only like $8,000 per referral. And then there was another line that was down there that had four or six referrals in it. But the average length of stay was over 18 months, and it was over $200,000 per referral. I said, well, what's going on with this referral partner? They said, well, they weren't giving us enough referrals. So, we stopped our relationship with them. And I thought, well, I'd rather take, you know, a few clients of theirs and make $200,000 than service 20 other clients or whatever to try and even match the amount of revenue that they're bringing in. So, it goes back to looking at the dollars at the end of the day as well, too.

[ 00:46:40 ] It's not the number of referrals that come through. It's like, how long are these clients staying with us? And how much lifetime revenue are they generating for our organization? And if someone is bringing in one referral at $200,000, I'm not just bringing them donuts and coffee. I mean, we're going to, we're going to go someplace nice, I'm going to treat them a little bit differently to make sure that we maintain that relationship with those folks. And so, we actually will tier the referral partners: Tier one referral partner, Tier two, Tier three are generally the ones you're going to replace because it's just not generating enough income for the business where it's costing the business money and set up expectations around that.

[ 00:47:17 ] And what's great about that, too, sorry, is it tells you what type of referral partners you work well with. But we were also able to identify: We use the HPC benchmarking study and said, 'Okay, well, let's look at a list of these other types of referral sources. Are we missing any that have some high dollar value? And sure enough, you know, we identified two, and we're able to create a strategic plan to say we need to start creating relationships within these buckets as well. Yeah, I love that example that you just shared. I think you shared it maybe at HCA way too.' And I was just sitting there like eating it up of, you know, two referrals equating to hundreds of 1000s of dollars versus 20 referrals, you know, equating to 10s of 1000s of dollars, like that's such a such a common mistake probably happening this industry of you have a metric that is volume based, you know, give me five new referrals, give me 10 new referrals.

[ 00:48:09 ] But if they're not tied back to revenue and right fit, and, you know, kind of fitting this persona that you're looking for, you know, you're losing money, you're wasting time. And, you know, it stems back to having the right metrics in place and having like the right lens, getting your sales, or marketing person to see things from the proper lens, and giving them, you know, the KPIs to support that. So, I love I love just like the, the imagery of that. I love that example, because it's so stark, you know, I think it's like the clichéé, and you mentioned this, like, you know, maybe 20% of your clients are generating 80% of the business, you know, that's that same principle can stem from sales as well.

[ 00:48:49 ] Yeah, I mean, just to go back to that was that HCOA, that example, another one of the tools we look at is that lifetime revenue. And it this has been consistent with every one-on-one agency where we'll pull the lifetime value over five-year, 10 years look back. And what we found is, is that there's roughly 50% between 45 and 50% of total of, of all the clients generate 97% of the total revenue, which means the other half only brought in 3% of total revenue, or we're costing the organization money. And that's always one of those big aha moments when I go through that exercise with, with folks, is to say, wait a second, 97% came from 50%.

[ 00:49:38 ] So could you imagine, you know, when you identify those, those right fit clients, the clients that you're working with really well, I mean, if you were able to offload even 20 to 30% of those bottom folks, how much more impactful your organization could be. And not to overgeneralize, but most commonly, that other group of clients are the most demanding, most taxing, you know, they're probably like edge cases, they're not, they're not, they're not, they're not, they're not, they're not, they're not, they're not your right fit. So naturally, they take more time, attention, focus of your office team of your caregivers, you know, and so offload those people, like you're saying, they're, you know, this is a competitive space, you probably have lots of other agencies, competitors in the market. And you may think, you know, that's dollars out the door.

[ 00:50:21 ] But like you just said, if you can optimize your time for the people that bring you the most revenue, like, you know, we're talking, you could grow really quickly if you re, you know, shift your focus to the right people. Do that, or you change, you change your model for the shorter hour shifts, right? So, in, you know, if someone's going to only commit, you know, you always ask, what's your long-term plan for mom, if they say, well, we're just transitioning, you know, we're only looking for four hours a day, three times a week, that's a different model, right? To say, okay, well, I know what my costs are on this. And so maybe your rate is going to say we do short-term, but if it's going to be short-term, these are what our rates are.

[ 00:51:01 ] And then you get that commitment for that amount of time and those rates. In order to make sure you're not losing money. So yeah, I mean, there's, there's options. Yeah, you can offload them, or you just, you change that, that model form to say, well, if it's going to be anything in this span of time, or under this many hours, then that rate has to be adjusted, because it's going to be hard enough to get carriers to go to these short shifts anyway, that are inconsistent. So, you've got to pay them more. So, you're going to have to bill more. Yeah, it comes back to knowing your margins, you know, like knowing, knowing your bottom line, knowing your break even. And if you know those things, have them defined, those decisions are a lot easier to make, which is crucial.

[ 00:51:38 ] Let's, let's keep going here. I want to make sure we crack through a couple more departments. I want to talk about staffing or scheduling. Specifically, this too, is probably an area where people are pretty good, you know, talking about like your scheduling software, there's a lot of data in their scheduling is kind of like the backbone of the business. And so usually, there's a lot of good things happening here. But what do you think of in terms of scheduling or staffing and hours? Yeah, and to tie it back to just revenue and retention, so utilization for me sticks out. But maybe in a different way, if people have heard me talk, they've probably heard me say this.

[ 00:52:16 ] But when I look at utilization, it's not, you know, how many hours do you want to work the caregiver telling you the number of hours, and then you make a decision that that's what their utilization is going to be? It's really how much do you need to earn after taxes on your paycheck? And then knowing how many hours they're going to need to work during that pay period, in order to, to have the finances to be able to cover their bills. Again, these are economically fragile caregivers. So, if I know at minimum, you need to earn this much, and then you're going to need to work this many hours. Now I know my utilization is accurate and making sure that I'm actually filling my end of the bargain and taking care of them so that they can pay their bills.

[ 00:52:59 ] Right? And so sometimes it's, it's difficult. You know, we've ran into situations where folks don't necessarily want to share that information. What we found is a lot of those caregivers are the short shift, short timers. And so, you know, the interpretation there, this is anecdotal is they're really just looking for an extra gig to pick up hours here and there, if they're not making, you know, their wages at their other jobs. But for the most part, we've had really good reception for organizations who have gone through and have asked that question, and they said, okay, well, if you want to earn $500 a week and we back into it after taxes, you're going to have to work, you know, 22 hours or 25 hours. Are you willing to commit to that?

[ 00:53:41 ] And then it's the job of the scheduler to make sure that they're hitting that utilization. The great thing about that too, is, you know, when you look at it, yeah, I don't know how many of you want to take a 10% pay cut or could afford a 15% pay cut and still pay your bills. You're going to look at that utilization a lot differently to say, if, you know, I don't get this person to a hundred percent, I know I'm creating a burden on them to be able to actually pay their bills and care for their families. And I don't think there's anything more important than we do and then being able to provide a livelihood for those caregivers to take care of their families.

[ 00:54:16 ] And so having that utilization be a hundred percent accurate, so you know, that they're earning enough to survive is important. So now if I'm looking at the schedule, you know, of course I have my go-to caregivers and I could easily get them to 150%, but am I willing to do that as a scheduler? If I see somebody at 70% or 80%, knowing that they're not going to be able to take care of themselves if we don't find them hours. So, it changes that behavior, and it changes the conversation too, to say, 'Hey, I noticed you're five hours short of your goal to be able to earn what you want to earn. Let's find you something. Let's do that. So that way you can be whole. Yeah. I love the way that you're talking about this.

[ 00:54:56 ] Like, I think this is just maybe a topic in and of itself.' That's like under-talked about, is, you know, making caregiving sustainable means we have to give them the hours that equate to the revenue that gets them to survive, like pay their bills. And I love that you're talking about like working that backwards, like quite literally having probably a pretty candid conversation with them of like, what, what is your cost of living? Like, what do we need to do for you? And then working that backwards. And then like you're saying, keeping that top of mind for the scheduler, like, you know, be looking at these hours and looking at these people and their needs, and then like, you know, kind of solving it from that, that perspective is really powerful.

[ 00:55:30 ] I want to ask a question. I'm going to ask you a question. I'm going to ask you a question. I'm going to ask you a question about overtime. Clearly, that's like a pretty big factor in this conversation, I know, maybe they need 50 hours, 55 hours, and overtime is definitely at play there. What's your kind of perspective on overtime? Oh, I mean, it's a necessary evil, right? I mean, it's just it's just part of it with agencies. It's something we can't get around, right? We try to minimize it as much as possible. You know, so that way, we're not our direct care expense isn't going up, but it is a necessary evil. And, you know, right now, with things being as tight as they are, trying to just source caregivers to, to work, it's not uncommon to see someone with, you know, 15% OT, 10% OT, which seems awfully high.

[ 00:56:19 ] But if you're understaffed, that's kind of the world they're living in right now. I think the only time that I get bothered when I look at data and examples of overtime is when I look at, you know, when I look at what's happening within the scheduling process is if there are caregivers being underutilized. And this especially happens with new hires as well, too, because they don't have that relationship yet with the scheduler. And it takes work to build a relationship. It's a lot easier for me to call Miriam, because I know her and ask her to do me a favor than it is, you know, John Smith, who I don't know, now I have to build a relationship with, and then, you know, trying to get them to take the hours.

[ 00:56:57 ] But it really forces them to do that, though, because now with the utilization, you know, that they have to earn it. It's not just asking, but saying, 'Hey, I want to make sure that you can earn what you're supposed to earn to pay your bill.' So, it lowers the barrier and that anxiety, I think, for that scheduler to try and I don't want to say sell the schedule to the to the caregiver. But, you know, I think it does provide an eye-opening way of looking at it to say, you know, if I cut your paycheck by 10% this month, would you be OK with that? And I doubt the answer is yes. So, it's just looking at how it impacts the lives of these folks. Yeah.

[ 00:57:38 ] Seeing everything from like a different lens. You know, I think that's really key here. The other thing, quick thing I want to ask you about in regard to scheduling and staffing is call outs again, kind of just the reality of this business, the reality of, you know, these people that we're working with. What's your take on tracking call outs, reducing call outs, you know, attaching some metrics to the that specific. Yeah. Oh, my goodness. So that's a tough one as well, too. There are so many different reasons why folks call out, you know, sometimes maybe they're working for another agency, and they can make 25 cents more an hour. And so, they're just going to call last minute. And that's just the reality of living paycheck to paycheck.

[ 00:58:23 ] You know, it doesn't sound like a lot, but it's a lot to those folks. You know, I think tracking it and in setting up an expectation is definitely something you need to do. Having those conversations with caregivers because it impacts those clients. So a caregiver that has a relationship with a client isn’t just going to call out the call out because they understand how it impacts those clients. And so, you know, as far as tracking call outs, generally, you'll see the habitual call outers, I guess, or whatever you want to call it. You got to make a decision. Right. On what type of care and how you want to represent yourself in front of your clients.

[ 00:59:04 ] And I think, you know, sometimes that's hard because you don’t want to lose the fact that they’re still willing to pick up some shifts. But is that really healthy for the business long term? So, I would just say whatever policy you have on your call out or at least have a policy and communicate it, but you've got to stick to it and build in some accountability there because you do have a duty to your clients as well to provide that care and their families. That's the promise. That's the promise we made. Yeah, I think I think the key there is, yeah, having policies in place and then tracking the trends like, you know. Oh, yeah. You'll see the offenders. Exactly.

[ 00:59:40 ] Like we talk about call out so much, you know, you jump in any of these home care Facebook groups, it's all about call outs and it's like, OK, like the issue is present. Like, you know, where are the solutions? Are we tracking the trends? Who are they? What's happening? Are you identifying all the reasons? Like, how do we like you said, like, work that backwards? Like, let's identify what's happening. And why? And then we can tackle it, you know, head on once we understand it better. So, I think, you know, that principle applies. Yeah. And that's when O.T. is probably OK as well, too, because they're never, never real time. Right. Like one of our policies was you had to call during our business hours. Now we were open from six until nine p.m.

[ 01:00:18 ] So we had a different way. I ran seven days a week. So, there was plenty of time for people to call out. Right. But you had to talk to somebody to call out. There was no email. There was no text. That's not a call-out that you're going to be able to stay on board. You had to talk to somebody. And again, your offenders will they'll come up and then you just got to make that decision. Yeah. And our last couple of minutes, let's jump to finance, if that's OK. I think like we were talking about, everything kind of rolls up to, you know, maybe the finance department, the finance person. But I want to just hear from your perspective. Can I say one more thing on staffing, though, that I think we talked about that caregiver care plan.

[ 01:01:04 ] So I think in the first 90 days as well to change behavior and force relationships, what I've worked with agencies with is, you know, we figure out what's the onboarding cost and cost to manage for that first 90 days. And so, if let's say it was the two thousand dollars or whatever, and so you need 200 hours in order to break even on that. So now a KPI for that schedule would be any new caregiver we bring on in the first 90 days needs to complete 200 hours of work. We need to make sure that they complete that. Right. So now, you know, you're going to at least break even, if not be over that. So, you're not losing money on that new hire.

[ 01:01:44 ] And it's going to force them to have to communicate with them to make sure that they're completing those hours and develop those relationships. Yeah, I'm glad you snuck that in. Like you were referencing earlier, it's so easy to call those like go to reliable people. But there's also, you know, there's a lot of people that are like, well, you know, I'm not going to do that. I'm not going to do that. I'm not going to do that. Get those people on schedule, get them working, get them to that break even mark so that we're not losing money on them in the first 30, 60, 90 days. That's huge. Yeah. Great, great point. Glad you got that in. If we've got just a couple of minutes, can we jump to finance just briefly? Want to hear my take on financial metrics, how things roll up, where the finance department's head should be at?

[ 01:02:23 ] Oh, my goodness. I mean, it should. A lot of the influence happens between gross and net. Right. And so, it's really looking at what do you want your net to be? Actually, I was having a conversation with an agency today where they were asking about net and, you know, and potentially bonuses for staff and things like that. And, you know, the thing is, you always need to pay your bills first. And so, you know, you never want to for him, you never want to fall below 10 percent net based on revenue. I said, and that can be a dynamic thing every month. Right. Whether you earn a million dollars, you know, this month, two million next month, that 10 percent is still going to be held for the business for future investments.

[ 01:03:06 ] And then anything beyond that, then you can look at bonuses. Right. Percentage bonuses based on that. So, I think looking at your indirect expenses, the example I use this earlier, you know, are you paying fifteen hundred dollars for you paying twelve thousand dollars a month for rent? Are these really critical decisions to have that expensive of an office space? Does it actually call for it? And so, I think it's really important for your finance people to be able to sift through that to make decisions. Now, I'm not saying go so lean where everyone's uncomfortable, but generally you'll be able to look in there and see where you might be able to make adjustments to help with net, because anything that you do on that bottom of that panel is directly going to affect that.

[ 01:03:55 ] Open air is huge, too. Sometimes I'm surprised at the lack of either a policy or consistency in executing, getting those bills and invoices paid. You know, I've seen organizations that are sitting on twenty, thirty thousand dollars in open air and say, OK, well, what's the recovery process for this and why does this keep happening? Right. How do we figure out if this is a continual issue? You know, is it just a certain set of clients that can't pay their bills on time or is or is there something else that we need to do to help negate the amount of opening or that's taking place because you're spending those dollars, you're paying those caregivers, your bills are still going out, but yet you're not recouping any of that revenue to be able to offset that.

[ 01:04:42 ] And it can be pretty painful, you know, generally with open air and just if people are still paper billing out there, I highly suggest getting away from that. You know, in our organization, we did credit card and ACA. And we just turned the switch one month and there was no more paper option for any new clients, for any clients that stayed on board. We charged a I believe it was eight percent because you have to handle the mail and all that. There are costs associated with that. And then for credit card processing, it was a three percent to cover the merchant fees and ACH was no charge. But I think as soon as we got rid of that paper billing, and I think I know as soon as we got rid of that paper billing, it was a heck of a lot more consistent because it's either hitting the account or hitting that card consistently every month.

[ 01:05:34 ] You're preaching to the choir on that one. I wish we could set a goal as a as an industry to get rid of paper billing by 2025. Like we've just got to get past that. So, you know, preaching the choir there. I think, you know, one of the things that I'm hearing around this department is the finance department probably above all has to balance like the short and the long term. You know, everyone in the office has to be thinking about, you know, short and long. But I think the finance department particularly, you know, they own the budget, they own revenue. And so, they've got to keep, you know, everything in the balance of, you know, short-term decision-making costs, expenses, et cetera, but also, you know, longevity of the business hours, sustainability, et cetera.

[ 01:06:13 ] And so, you know, that's a lot of pressure, maybe a lot of weight on them. But they're the department that really has to keep focus on both. It is. And they have to be able to explain the why for that long-term to you. Right. Because I've seen a lot of great financial controllers that have you know, created ways of generating more net, but they're just not listened to because the owner doesn't want to. Now, I don't want to give that up or I don't want to do that. And I think sometimes that can be short-term thinking, you know, especially when times are good. Those suggestions tend to go out the window. But we know this is a very cyclical industry, like just the market.

[ 01:06:52 ] Like right now, this is something else I look at with folks is their cycle. So, you know, they'll say five years of weekly data, so 52 weeks over five years and overlay it, and you'll be able to see your own market trend when you have the peaks and valleys. And right now, there's a lot of agencies that are in a valley. And I just want to say from the various agencies that I've been working with, it's going to go up here pretty soon. So, if you find yourself right now at a low, March is generally what I've seen. And this is from own is East Coast, Southwest. There's a lot of folks right now that're have lost some hours, but it should be back on the rise based on the data.

[ 01:07:33 ] I'm glad you're saying that. I've talked to a lot of owners recently, you know, the last few weeks that have said exactly what you just said. And I, you know, I just reassure them that like, hey, I'm hearing this, but it's good to hear you even like validate that further, that we're in a valley right now and don't feel like, you know, you're lost or it's on you. I think it's just, you know, the time of year and there are a lot of factors that contribute to that. Yeah, absolutely. I love to, yeah, what you said about, you know, the finance team, like they are usually pretty good at tracking and they've got the numbers on hand, but you just said like the justification, the why they have to be the ones to tell the story, to paint the picture, to justify the decision-making in the short term, because they know the impact on the long-term.

[ 01:08:15 ] And I think that that's a, that's a big role, you know, those are big shoes to fill, but that's, you know, kind of the nature of that department as well. Yeah. I know, I know we're at time here. I just want to, you know, maybe give you a couple minutes here at the end to just talk about, you know, in general, anything that we missed or any advice, you know, leaving this session for owners that are thinking about KPIs, you know, maybe refactoring their current KPIs, like what maybe just general advice do I have for people that are in this state of mind thinking about, you know, how to approach business metrics? Yeah. Again, I would, I would really look at, when I look at KPIs, like, why am I tracking this?

[ 01:08:54 ] What's the expected outcome of behavior and what's the expected outcome that's going to influence the revenue, right? It's always that way, like, why am I looking at this? Am I looking at this because I want to manage this person to make this many calls? Is that really, but is that really what I want to do here? Or do I want to go a little bit higher, and they know that like, this is the expected outcome from it. So, I'd say, don't get so, so far into the weeds. Yeah. I think that's a really good point. And, you know, this is a really interesting industry because there's a lot of friendly competitors have discussions about the KPIs that you're tracking and why, and if something's worked or hasn't worked.

[ 01:09:35 ] I mean, we do that in our community all the time in the home care CEO community, people share, and they say, well, I've started looking at this number and this is why, and this is what it's, what it's done, but, but share them. I think there's plenty, plenty of room for, for a lot of agencies to grow as a result of this population continues to age. You know, it's just, we're going to have more and more folks that we've got to care for. And I think by focusing on the, on the right things to improve our agencies and in building resources for them, it's just going to create a greater experience, not only for the clients, but the caregivers. And then in the end, it's going to benefit the owner.

[ 01:10:12 ] Jensen, this session has been awesome. A lot of great nuggets here. And I just want to thank you for all that you've done for this industry. You know, I think you're a great example personally and professionally, and you're driving this industry forward with these mastermind groups. You know, when everyone elevates and gets better, you know, it improves everyone and everywhere, you know, in this industry. So, you, you're doing a lot on, in that regard. And so, I just want to thank you for your efforts. And I hope everyone enjoys the session, gets a lot of, you know, great feedback out of it. If anyone wants to reach out to Jensen, you know, he's active on LinkedIn. He's a busy guy, travels a lot, but you know, shoot him an email, or shoot him a DM. To get ahold of him and stay involved. So, Jensen, thanks for being here. And thanks for everything you've shared. Yeah. Thank you, Miriam. This was, this was a fun conversation. Appreciate it. Awesome.