There were an estimated 73 million baby boomers — people born between 1946 and 1964 — in the United States as of 2019, with over 10,000 turning 65 every day. As the number of older baby boomers continues to grow, the need for compassionate, well-trained care providers is also growing. 

Home care agencies face the challenge of being profitable while attracting, training, and retaining quality talent. Understanding caregiver rates of pay can help you decide how much budget to allocate for caregiver salaries.

Understanding Caregiver Costs

It's important for eldercare agencies to understand the costs of care, as that helps manage expectations for clients and families about the overall cost of care and provides a benchmark against which you can compare your own rates.

The cost of healthcare, particularly after retirement, is significant. On average, retirees spend about $4,400 on annual healthcare expenses including health insurance premiums, over-the-counter drugs, doctor visits, dentist visits, and prescriptions. 

These costs increase as people age, averaging about $6,600 for people 85 and over. This includes costs for recurring health care services/predictable care (e.g., your annual physical). They don't include non-recurring services like hospital stays or outpatient surgery. They also don't include expenses associated with long-term in-home care or nursing home care. 

Unpaid family caregivers often fill in care gaps, spending, on average, about $7,200 per year on out-of-pocket expenses related to care. This doesn't include lost wages, productivity, and other indirect costs.

Types of Caregivers

When most people think about caregivers, they think of someone providing custodial care. Custodial caregivers assist with the activities of daily living (ADL). Tasks can include helping someone bathe, eat, and get dressed.  

Providers of custodial care might be a home health aide, personal care aide, live-in caregiver, or a family member. 

Home health aides (HHAs) have training in working with people who have chronic illnesses, disabilities, or cognitive impairments. They often work for home health agencies and provide services like wound care, checking vital signs, and helping with physical therapy exercises. 

Personal care aides (PCAs) provide services similar to that of HHAs, but they don't usually work for an agency. Families often hire PCAs directly. PCAs may be full-time, live-in caregivers, or part-time, hourly caregivers. 

In addition to custodial care, some caregivers provide skilled care. Skilled caregivers are licensed health professionals like registered nurses and physical therapists that work for home health agencies and long-term care (LTC) facilities. They provide services like physical therapy, changing wound dressings, administering IV medications, and giving injections.

Caregiver Rates of Pay

The following are some average caregiver pay rates for various types of caregivers in 2022:

• Non-medical home health aide: $8-12/hour for beginners; $9-15 for experienced HHAs
• Certified nursing aides (CNAs): $10-16/hour
• Certified home health aides (CHHAs): $9-$16/hour
• Live-in caregivers: $24/hour for 6-12 hours of care per day

Keep in mind caregiver salary and rates of pay vary widely based on state, skill level, and experience, so it's always good to see how much caregivers make in your area. The national average for a live-in caregiver is about $38,000 or $18/hour in 2022, though this can also vary widely based on location, credentials, and responsibilities. ZipRecruiter reports that most live-in caregiver salaries fall within the $25,000 to $44,500 range.

How to Be More Profitable

While there's not much flexibility when it comes to caregiver salary amounts, there are many ways to remain profitable while providing professional caregiving services. Here are some approaches that can help you cut costs and increase revenue. 

• Get more clients without spending on advertising — Seek friend/family referrals and work with other businesses to cross-promote your services. You should also focus on optimizing your online presence as part of your home care marketing strategy. 

• Maximize cash flow with prepaid retainers — Set up a system where customers pay for services in advance. You could require that clients pre-pay for a fixed number of hours of care per week. This way, you're guaranteed payment for the time your caregivers are on the clock.

• Use tiered pricing models — Tiered pricing incentivizes clients to purchase more over longer periods of time. For example, you can charge a lower hourly rate for customers who sign 6-month versus 3-month agreements. You can also charge a higher or lower rate based on the level of care required (e.g., skilled versus custodial care). 

• Turn your business into a premium brand — Work on establishing your company as a leading home care service provider. Building a roster of positive customer reviews is one way to do this. You should also ensure that your caregivers are well-trained and certified, and that caregiver pay is competitive. Premium brands are trusted brands, meaning you can charge more than your competitors.

• Improve caregiver retention — Replacing just one staff member can cost as much as $41,000/year. Improving retention rates by even a small percentage can have a big impact on your bottom line. Caregiver salary is a key factor in retaining employees — it’s so important that we created a webinar focused on keeping your caregivers happy, so they stick around.

• Improve customer retention — Eldercare is a competitive field, and dissatisfied clients can easily choose a different provider. Retain customers by providing excellent customer service.

Level Up Your Caregiving Training

Looking to get your caregivers trained quickly? CareAcademy offers state-approved online courses for non-medical caregivers and personal care aides. 

We have an innovative training model to train and certify new HHAs, continuing education for CNAs, and ANCC-accredited continuing education that meets state requirements for OTs, PTs, RNs, LPNs, and LVNs. Contact us to book a demo today