Stay The Course
In navigational terms, the captain of a ship may decide to “stay the course” in spite of obstacles such as bad weather or ill winds that may make the progress forward more challenging or slower. In senior living, once a leader or group of leaders at the Board level make an informed decision about the direction of the organization for the future, the same imperative of staying the course is often the best way to achieve success. The primary reason for this aphorism, as will be explained in detail below, is demographics. The aging of the Baby Boom Generation, long discussed and anticipated, is finally having an effect on providers of all levels of senior living.
That is not to say that there is sometimes not a need for slight course corrections as the organization is hit with unexpected headwinds such as staffing issues, inflationary pressures, or new regulatory impediments. However, if a decision was made after careful consideration of relevant internal and external factors that may impact achievement of organizational goals, staying the course with steely determination will prove most often to be the correct choice.
Economic Factors
In looking back at the past decades for clues as to what can influence success and failure, we find that while the economic impacts of the business cycle often drive short-term pressures, the shocks of recessions or economic expansions are not the determining factor of success. In fact, if one looks back to the Great Recession of 2008 and 2009, plus the post-COVID Pandemic recession of 2022 and 2023, we can see similarities in the financial effects of rising prices of goods and services, plus higher interest rates. The main difference in the post-COVID period has staffing shortages that have been endemic across senior living. There are several related reasons for this.
First, the change of work/life balance that occurred when much of the US population either worked from home or were temporarily laid off during the pandemic is not likely to change. There has been an adjustment of expectations regarding what is needed to ensure happiness. The pursuit of a challenging career is now less desirable for larger percentages of people who place higher value on time with family and the enjoyment of leisure.
Second, the young people who typically worked in senior living in dining and food service positions were laid off early in the COVID pandemic as dining switched to to-go approaches or delivery of meals to resident living units. Unfortunately, the high school and college students who were once the core of many dining service programs have not returned in the post-COVID era. The reasons are many, including originally a reluctance to get the COVID vaccine, but now the reality that other jobs that remained available during the pandemic are better options (e.g., grocery stores, fast food with take-out options). In addition, there has been a permanent change in family dynamics which pressured young adults to work during high school and college.
Lastly, some of the stigma of working in senior living facilities, long a hindrance to the field of aging services, have returned as the news media highlighted deaths in assisted living and nursing homes. The lockdowns during the pandemic kept many senior living organizations from hiring new staff. As the pandemic ended, career options in senior living were no longer a priority for many of the young people who might have considered it.
Unfortunately, the shortage of staff in senior living communities will likely remain a challenge for the foreseeable future. With the turmoil in immigration policies at the federal level, a likely source of potential new workers will remain closed for the remainder of this decade.
On the inflationary front, especially as relates to prices for products and services, as well as interest rates in the capital markets, the news has been improving in recent months. While there is still the need for more stabilization in some sectors of the economy, the rate of inflation has returned to a manageable level. These economic factors, while a source of improved outlook for many in the short run, are difficult to predict over the long term since they are often tied to world events that are impossible to forecast and public policy whims that can change radically with the next election cycle. Organizations looking to undertake the renovation of older buildings or the construction of new ones are wise to make sure their financial pro formas are conservative with regard to construction cost escalation rates and borrowing costs. This will help insulate projects from unforeseen financial conditions.
Demographic Factors Will Drive Success
For many years, the discussion of the aging of the Baby Boom generation was highlighted at conferences in senior living. The largest generation in American history, 75 million strong, started to turn age 65 in 2010. The statistic that was staggering to consider was 10,000 boomers hitting age 65 every day for 20 years (2010 – 2030). While normal mortality rates have shrunken the overall number of boomers, there are still 71 million heading into their prime retirement years. This is certainly an unprecedented demographic factor. It is only now, in 2025, that this massive generation is beginning to impact senior living at the first boomers begin to turn 80 years of age.
The impact will be particularly noticeable in 2026 and beyond since the age of admission to life plan communities and other levels of care, including assisted living and skilled nursing, have risen steadily in recent years. Most communities have seen the average age of move-in rise to 80 years and above. These represent the front edge of the tsunami of boomers we have been expecting. What does this mean for the future? A demographic impact that should not be underestimated or ignored as organizations plan for the future.
The challenge for senior living providers will be to have the types of residential living units and services available for this massive generation as they reach the age when they are ready to move into a communal setting. Prudent organizations will have developed models of living, amenities, and services that emphasize flexibility in programming for the residents. Baby boomers, known for having disrupted society as every stage of their life cycle, will certainly do the same thing in their retirement years. It is incumbent upon senior living organizations to anticipate the differing wants and desires of the boomers as they choose to move into life plan communities and other types of senior living campuses.
Conclusion
In senior living, if a leader or group of leaders at the Board level have undertaken a thorough planning process and arrived at an informed decision about the direction of the organization for the future, staying the course is often the best way to achieve success. While adjustments to a renovation or expansion plan are to be expected when facing headwinds of increasing inflation, uncertainty in the capital markets, or rising construction costs, the willingness to stay focused on the long term goals of the organization and it marketplace will ensure that the project moves forward to successful completion in time for the demographic boost in demand that is just beginning. The future in senior living markets is bright as the baby boomers make one final mark on society before they become a large footnote in US history.
