Human resources in a skilled nursing facility is not a nice-to-have function. It is a core operational requirement that directly impacts compliance, quality of care, staff stability, financial performance, and legal exposure.
Yet in many nursing homes -- particularly smaller and mid-sized facilities -- HR is treated as an afterthought. The administrator doubles as the HR director. Policies are outdated or nonexistent. Compliance is reactive rather than proactive. Employee relations issues fester until they become legal liabilities.
This approach may seem workable when things are going smoothly, but it creates enormous vulnerability. One Department of Labor audit, one EEOC complaint, one wrongful termination lawsuit, or one mass resignation event can expose the fragility of a facility operating without professional HR infrastructure.
The good news is that you do not need to hire a full-time HR director to solve this problem. Fractional and outsourced HR services provide professional-grade human resources support at a fraction of the cost of a full-time hire. But how do you know when it is time to make that investment?
Here are five unmistakable signs.
Sign 1: You Are Reacting to Compliance Issues Instead of Preventing Them
If your facility's approach to HR compliance can be summarized as "we deal with it when it comes up," you are already behind.
What Reactive Compliance Looks Like
- You update your employee handbook only when an attorney tells you something is missing after an incident.
- You learn about new labor law requirements from a citation rather than proactive monitoring.
- Your I-9 files have not been audited in years, and you are not confident they would survive a Department of Homeland Security inspection.
- You are not sure whether your facility is compliant with the latest changes to overtime rules, paid leave requirements, or wage transparency laws.
- Your job descriptions were written years ago and no longer reflect actual duties or current ADA essential function requirements.
Why This Is Dangerous
The regulatory landscape for employers -- especially healthcare employers -- is complex and constantly evolving. Federal, state, and local employment laws change frequently, and nursing homes are subject to additional industry-specific requirements from CMS, OSHA, and state health departments.
Non-compliance carries real consequences:
- Department of Labor (DOL) audits for wage and hour violations can result in back pay awards, penalties, and liquidated damages that double the amount owed.
- EEOC complaints for discrimination, harassment, or retaliation can result in costly investigations, settlements, and damage to your facility's reputation.
- OSHA citations for workplace safety violations -- common in healthcare settings -- carry fines of up to $16,131 per serious violation and $161,323 per willful violation.
- State labor board complaints for issues like improper termination, unpaid wages, or break violations can snowball quickly.
A professional HR function monitors regulatory changes, conducts proactive compliance audits, and ensures your facility stays ahead of requirements rather than scrambling to catch up.
Sign 2: You Do Not Have a Current, Comprehensive Employee Handbook
The employee handbook is one of the most important documents in your facility, yet it is one of the most commonly neglected.
What an Inadequate Handbook Situation Looks Like
- Your handbook has not been substantially updated in more than two years.
- It does not address current topics like remote work policies (for administrative staff), social media use, or workplace violence prevention.
- Anti-harassment and non-discrimination policies do not reflect current legal standards and protected classes.
- Disciplinary procedures are vague or inconsistent, leaving supervisors to make it up as they go.
- The handbook was not reviewed by an employment attorney before distribution.
- Employees signed acknowledgment forms years ago, and new hires may not have signed at all.
Why This Matters
Your employee handbook serves multiple critical functions:
Legal protection. A well-drafted handbook establishes your facility's policies and the employee's acknowledgment of those policies. In wrongful termination, discrimination, or harassment claims, your handbook is often the first document an opposing attorney requests. If your policies are outdated, ambiguous, or nonexistent, you lose a critical layer of defense.
Operational consistency. When supervisors do not have clear policy guidance, they make inconsistent decisions. One charge nurse writes up a CNA for a first-time attendance violation. Another gives a verbal warning for the same offense. Inconsistency creates the perception (and sometimes the reality) of favoritism and discrimination.
Employee expectations. Staff deserve to know what is expected of them and what they can expect from the facility. A clear, comprehensive handbook reduces misunderstandings and provides a foundation for accountability.
An outsourced HR partner will audit your existing handbook (or create one from scratch), ensure it complies with all applicable laws, and establish a regular review cycle to keep it current.
Sign 3: The Administrator Is Doing HR
This is perhaps the most common scenario in small and mid-sized nursing homes, and it is one of the most problematic.
What This Looks Like
- The administrator handles hiring, disciplinary actions, benefits questions, workers' compensation claims, and employee complaints in addition to their operational, clinical oversight, and regulatory responsibilities.
- There is no dedicated HR inbox or phone line -- employee issues are handled informally and inconsistently.
- The administrator conducts investigations into harassment or discrimination complaints themselves, without training in proper investigation techniques.
- HR tasks are perpetually deprioritized because census management, survey prep, family concerns, and clinical issues always seem more urgent.
- Personnel files are incomplete, disorganized, or stored improperly.
Why This Is a Problem
Bandwidth. Nursing home administrators already have one of the most demanding jobs in healthcare management. Adding HR to their plate means that something -- often several things -- gets insufficient attention. Either operations suffer because the administrator is dealing with an FMLA request, or the FMLA request is mishandled because the administrator is dealing with a clinical emergency.
Expertise. HR is a specialized discipline. Employment law, benefits administration, workers' compensation, leave management, and employee relations each require specific knowledge that most administrators do not have. Good intentions do not protect you from a wage and hour lawsuit when overtime was calculated incorrectly.
Conflict of interest. When the administrator is also the HR function, employees who have complaints about the administrator have no one to turn to. This creates legal exposure and undermines the trust necessary for an effective employee relations program.
Documentation gaps. Administrators juggling HR with their primary responsibilities inevitably cut corners on documentation. Verbal conversations replace written warnings. Performance issues are not documented consistently. These gaps become liabilities in legal proceedings.
Outsourced HR does not replace the administrator's leadership role -- it supplements it with the specialized expertise and dedicated bandwidth that professional HR requires.
Sign 4: Your Turnover Is High and You Have No Retention Strategy
We discussed turnover extensively in our article on nursing home turnover rates, but it bears repeating in the HR context: high turnover without a systematic retention strategy is an HR failure.
What This Looks Like
- Annual turnover exceeds 50% (and you may not be tracking it precisely enough to know the real number).
- Exit interviews are not conducted, or they are conducted informally without standardized questions or data analysis.
- There is no onboarding program beyond a first-day orientation packet and a shadowing shift.
- Employee engagement is not measured in any systematic way.
- The same positions are posted repeatedly on job boards, and the cost of perpetual recruitment is accepted as normal.
- Retention efforts consist of occasional pizza parties and a holiday bonus.
The HR Connection
Turnover is not just a staffing problem -- it is an HR problem with HR solutions. Professional HR support addresses turnover through:
Data-driven diagnosis. Before you can fix turnover, you need to understand it. An HR professional will calculate your true turnover rate by position and department, analyze exit interview data for themes, conduct stay interviews with current staff, and identify the specific drivers of attrition in your facility.
Structured onboarding. The first 90 days are the highest-risk period for turnover. A proper onboarding program -- not just a day of paperwork -- significantly improves first-year retention.
Compensation benchmarking. Are you paying competitively? An HR professional conducts market wage surveys, analyzes your total compensation package against competitors, and recommends adjustments that balance retention with financial sustainability.
Performance management. Staff who receive regular feedback, clear expectations, and opportunities for growth are more likely to stay. Building a performance management system is a core HR function.
Employee relations. Workplace conflicts, supervisor issues, and cultural problems drive turnover more than pay in most facilities. An HR professional provides a neutral, trained resource for resolving issues before they drive employees out the door.
Sign 5: Your Benefits and Compensation Are Falling Behind the Market
In the intensely competitive healthcare labor market, your total compensation package is either attracting and retaining talent or pushing it toward your competitors.
What Falling Behind Looks Like
- You have not conducted a compensation analysis in more than two years.
- You are losing candidates and employees to competitors who offer better benefits, and you are not sure what those competitors are actually offering.
- Your health insurance renewal comes with a double-digit premium increase, and you accept it because you do not know how to negotiate or shop alternatives.
- You offer no retirement plan, or your 401(k) has high fees and low participation because no one has evaluated it.
- Your benefits enrollment process is manual, confusing, and generates frequent errors.
- You do not offer benefits that are increasingly standard in healthcare: tuition reimbursement, employee assistance programs, shift differentials, or flexible scheduling options.
Why This Requires HR Expertise
Benefits administration is one of the most technically complex areas of HR, and it is also one of the most impactful for recruitment and retention.
Benefits brokerage and negotiation. An HR professional or outsourced HR firm can shop your health insurance across multiple carriers, negotiate rates, and identify plan designs that balance cost and coverage. The savings from a single well-negotiated renewal can offset the cost of outsourced HR services for the entire year.
Compliance requirements. ACA reporting, ERISA requirements, COBRA administration, and state-specific mandates create a web of compliance obligations that most administrators are not equipped to manage. Errors carry penalties.
Total compensation strategy. Pay and benefits should work together as a coherent strategy, not a collection of ad hoc decisions. An HR professional aligns your compensation philosophy with your retention goals and financial constraints.
Benchmarking and market positioning. Knowing where you stand relative to competitors is essential for making informed compensation decisions. Outsourced HR provides access to salary surveys, benefits benchmarking data, and market intelligence that individual facilities rarely have.
What Outsourced HR Actually Looks Like
If you are considering outsourced HR, it helps to understand what the engagement typically involves.
Fractional HR
A fractional HR model provides your facility with an experienced HR professional who works on-site or remotely for a set number of hours per week or month. This person functions as your HR department -- handling employee relations, compliance, benefits, and policy development -- but at a fraction of the cost of a full-time hire.
Typical fractional HR arrangements:
- 10 to 20 hours per week of dedicated HR support
- Regular on-site presence (weekly or biweekly) supplemented by remote availability
- Direct access via phone and email for urgent issues
- Ongoing compliance monitoring and proactive policy updates
Project-Based HR
Some facilities need specific HR projects completed rather than ongoing support. Common project engagements include:
- Employee handbook development or overhaul
- Compensation and benefits benchmarking study
- HR compliance audit
- Onboarding program design
- Investigation of a specific complaint or incident
- Personnel file audit and remediation
Ongoing HR Consulting
A hybrid model that provides regular strategic guidance without the day-to-day operational involvement of fractional HR. This works well for facilities that have a capable office manager handling administrative HR tasks but need expert guidance on complex issues.
The Cost Comparison
The numbers make a compelling case for outsourced HR:
Full-time HR Director: A qualified HR director for a healthcare facility typically commands a salary of $70,000 to $95,000, plus benefits (health insurance, PTO, retirement contributions) that add 25% to 35% to the base cost. Total annual cost: approximately $90,000 to $130,000.
Fractional HR (15-20 hours/week): Typical fractional HR engagements for skilled nursing facilities range from $3,000 to $6,000 per month, or $36,000 to $72,000 annually. You get experienced, senior-level HR expertise without the overhead of a full-time salary, benefits, office space, and management time.
The value calculation: If outsourced HR prevents a single successful employment lawsuit (average settlement: $40,000 to $150,000), reduces turnover by even 10 percentage points (saving $50,000+ annually in replacement costs), or negotiates a better benefits renewal (saving $20,000 to $50,000), the engagement pays for itself multiple times over.
When to Make the Switch
There is no perfect time to bring in outsourced HR, but there are moments when the need becomes urgent:
- After receiving a DOL audit notice or an EEOC charge
- When turnover reaches a level that threatens operational stability
- Before or after a change in leadership
- When the facility is growing (adding beds, acquiring another facility)
- When the administrator acknowledges they can no longer manage HR adequately alongside their other responsibilities
The best time, of course, is before a crisis forces your hand. Proactive facilities that invest in professional HR support avoid the costly, disruptive events that reactive facilities endure.
Get Professional HR Support for Your Facility
If you recognized your facility in any of the five signs above, it is time to have a conversation about what professional HR support could look like for your operation. Every facility's needs are different, and we tailor our engagement to match your size, complexity, and priorities.
Our nursing home HR services provide experienced, healthcare-specific HR support that protects your facility from compliance risk, improves staff retention, and frees your leadership team to focus on what they do best: providing excellent care to your residents.
Reach out to schedule a free HR assessment and find out where your facility stands -- and how we can help you get where you need to be.