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Amazingly Bold: Giving everyone in the organization a $3/hour raise

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Talking with Russ Bonanno (CEO, LifeDesigns) about leadership, risk, and change

Speaking to leaders in our field across the country, I’ve found amazing people doing incredible things.  But too often and despite best efforts, the success and opportunity gets lost in so much of the negative news that affects our field.   So, with this blog, I am aiming to change that in one small way: by writing about people doing amazingly bold things. The first one is Russ Bonanno, CEO of LIFEDesigns, Bloomington, Indiana since 2017.

Like many agencies, LIFEDesigns (providing community-focused services for people with intellectual and developmental disabilities with 239 staff) struggles with workforce issues, including filling positions and keeping people. 

When the risk of doing nothing is greater than the risk of change.

Previous efforts in the state of Indiana with the General Assembly, led by The Arc of Indiana and INARF, had been successful in raising reimbursement rates for certain Medicaid Waiver funded-services, with the requirement that 75% of the rate increase went directly to Direct Support Professionals (DSP) salaries only.  This got these DSPs to a starting wage a little over $10 an hour. As this was still insufficient, The Arc of Indiana and INARF tried to get another rate increase from the legislature this year, without success.

Russ looked at the problem differently.  He asked his financial team to identify the following: among the people they already served, how many services and supports had been approved but were unable to be provided because of staff shortages?  The answer for LIFEDesigns was over $1.8 million a year. 

What could be done? LIFEDesigns was faced with people turning down jobs due to wages; others stressed over the amount of overtime and pressure they faced as DSPs and managers spent most of their work time covering shifts; and perhaps most importantly, people they support were not getting what they needed and deserved. Russ knew that people throughout the organization, not just DSPs, had not received raises that kept up with costs of living for quite some time.  This could not continue.

He and his team devised a plan that was implemented at the end of May 2019 to raise wages for everyone in the agency by $3 an hour.  That’s right, everyone, except for him. Why include everyone in the plan?  Because every person in the organization plays a part in its success. Excluding anyone would be unfair and problematic.  

They designed a plan, got it approved by the Board and communicated to everyone the reason they were doing this.  They also shared what was needed from everyone to meet their goal of providing appropriate supports for people, making the most of funding for people, and to stabilize their workforce. Each employee has to help recruit quality new employees, for this plan would only work if the organization became fully staffed.

According to Russ, “I went to the Board, laid it out and shared that the current situation was untenable.  They agreed. In a sense we jumped off a cliff and will learn if we have a parachute in six months.”

The cost of this investment in human capital is $1.4 million a year.  They will pay for it through the increased revenue and savings from decreased turnover, which is calculated at approximately $5,000 per person (check your turnover costs with Quillo’s turnover calculator). They also believe they will no longer be reliant on an outside staffing agency that charges more than the reimbursement rate to cover shifts. The additional benefits they hope to see include the reduction of burnout, more time to channel creativity and energy to improving services, and an overall change in the culture of the organization.

Russ truly believes that LIFEDesigns will be more successful when it pays attention to its primary resource – its people.  He has introduced changes in every facet, starting from orientation and onboarding to internal communications, support expectations, and employee engagement.  He knows the solution is multi-faceted, and these other areas are as important as it is to raise wages.

We will be checking back with Russ in six months to see how he is doing.  I believe he will not only learn that he has a parachute, but that LIFEDesigns and its staff have grown wings that will take them to new heights.

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