If there's an economic recession this year, how will that impact my home care agency?
Short answer: it'll put some pressure on you in terms of getting/keeping clients but it's likely to have an overall net positive effect on your business because it would alleviate caregiver shortages.
While there's no one-size-fits-all answer, here are some facts and factors to consider.
- Another recession would almost certainly be easier on home care providers than the COVID-19 recession in 2020. That recession was an anomaly because it reduced demand while also reducing availability of workers - an effect that runs counter to "normal" recessions.
- According to Stephen Tweed, founder of Leading Home Care and the Home Care CEO Forum, "major economic upheaval has not had a significant impact on the home care industry," based on his experience working in home care through five major economic downturns prior to the 2020 recession.
- In the same conversation, Tweed did recognize the following areas of impact: 1) overall higher burnout among home care owners due to the need to rapidly adjust to a high level of change and "recession stress" from the recession's impact on other parts of their lives, 2) more acquisitions as home care owners sell their agencies as a result of burnout, and 3) agencies whose clientele are primarily upper-class seeing a temporary loss in demand that corresponds to the behavior of the stock market.
- According to Home Care Pulse, 82% of home care agencies reported having to turn down clients last year due to a lack of available staff. With the impact of a recession on the job market, the supply of caregivers would almost certainly skyrocket, reducing the impact of historic caregiver shortages that we've seen last year and likely offsetting the negative impacts of a recession.
Bottom line? While there are challenges, home care is a good place to be during a recession.
Notes: This was during an interview by our team member Miriam in 2020, on behalf of Home Care Pulse.