MANAGING LABOR, FOOD, AND ENERGY COSTS IN SENIOR LIVING COMMUNITIES
tell at a glance who is creeping up toward overtime hours. When a shift needs to be filled, “you can see who is available and how close they are to being in overtime. Then you push that shift availability to those who are less close to overtime. It gives real visibility to the person who is managing that schedule so that they can make better decisions,” Parker said. The communities also are using care
assessment software to better align staffing with resident needs. This allows managers to more precisely hone each shift. “They can look in there and see the peak times of the residents’ needs. Is it around getting people out of bed, or is it shower time? Then we can add partial shifts based on that assess- ment software, rather than just adding eight hours in the morning when maybe that isn’t what is needed,” he said. Paired with thoughtful hiring and training
practices, he said, this kind of software-based scheduling can significantly reduce both reg- ular hours and overtime expense.
Food Costs In order to better manage food costs, don’t think about food costs. For senior living din- ing directors, the key is to approach the cost equation from a resident satisfaction point of view. Everything else flows from there,
said Gottfried Ernst, vice president of hos- pitality for Harbor Retirement Associates. To trim food expenses, it’s important to
determine what residents like to eat. Then, build menus off of that and cost drivers like waste, spoilage, and over-ordering all begin to fall away. “You start with smart and effective menu planning. The menu is the roadmap to suc- cess, just like the care plan drives success in the community,” Ernst said. Menu choices drive the bottom line. “You
need to have a menu that is well-balanced, with highs and lows in terms of items that are more or less expensive. You need a menu that allows you to cross-utilize prod- ucts: You can have broccoli one day and broccoli-cheese soup the next day,” he said. The menu likewise determines what you
keep in the cupboard, but to make the most of a good menu, you need to keep a close watch on that inventory. “You have to keep very good control on what you purchase versus what you are serving. So you check product when it is being received to be sure food is in proper condition. Then you make sure product is stored at the right tempera- ture, so you get the longest shelf life out of every product,” Ernst said. Date product when it comes in and rotate
Wholesale Food Prices Trend Higher in 2017 Producer Price Index for All Foods
-6% -4% -2% 0% 2% 4% 6% 8% 10%
8.1% 7.7% 4.9% 2.2% 2.2% 0.7% -2.0% -3.8% -4.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: Bureau of Labor Statistics, 2016 2017*
Note: Figures represent the overage change in prices paid to domestic producers for their output *Year-to-date through July
36 SENIOR LIVING EXECUTIVE / ISSUE 4 2017 5.5%
oldest product out. This may sound like ba- sic kitchen methodology, but many dining services operations are careless in these ar- eas, and it costs them. All of these details are significant at a
time when food costs are on the rise. After registering five consecutive annual increas- es between 2009 and 2014—a total in- crease of 25 percent—the “Producer Price Index for All Foods” declined in 2015 and 2016, but prices are climbing again. The “Producer Price Index for All Foods” rose in six of the first seven months of 2017, ac- cording to the “Key Economic Indicators: 2018 Trends and Forecasts for Labor, Food, Utilities” report.
MEASURING
COMMODITY PRICES THIS YEAR, THROUGH JULY:
Wholesale BEEF and VEAL prices were down
Wholesale PORK prices increased
Wholesale POULTRY prices were up due primarily to an increase in chicken prices
Wholesale prices for fresh FRUITS increased
EGG prices were down nearly
COFFEE prices were down
Wholesale prices for CEREAL and BAKERY products declined
4.3% 2.1%
2.9%
6.4% 19% 2.3%
0.6% Wholesale prices for dairy were up
6.5% 5.3% 4.3% BUTTER MILK
CHEESE
Source: “Key Economic Indicators: 2018 Trends and Forecasts for Labor, Food, Utilities” report published in Argentum Quarterly Issue 3 2017, based on data from U.S. Bureau of Labor Statistics.
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