During periods of change and increased regulation Retirement Village specialists Russell Kennedy Lawyers recommended in their webinar that villages undertake Stress Testing (link below).
During the government consultation period regarding changes to exit payments many expressed their concerns on how this additional pressure will be managed with all the other new requirements and in the context of an ever-changing sales environment. This has recently been compounded by the Asset management plan and reporting requirements.
The last 2 years has seen rolling legislative changes requiring more of villages and village managers time and stress testing can identify vulnerabilities to trigger remedial action[1] to be prepared before the crisis comes.
What is stress testing?
Used to determine operational effectiveness under adverse conditions it is also known as Business Continuity (BCP) testing and involves working through scenarios to ensure your village is adequately prepared. Not unlike the stress tests people might be informed for health assessments, the test is designed to gauge how well the village can manage issues that may stress the current processes, policies and operations.
Stress testing is not a lot of work and can achieve significant outcomes in a short amount of time through a process most people enjoy.
[1] Borio, C., Drehmann, M., & Tsatsaronis, K. (2014). Stress-testing macro stress testing: does it live up to expectations?. Journal of Financial Stability, 12, 3-15.
How it works
You can design your own or purchase a scenario that will test your preparedness to face a range of issues related to managing a village. This may relate to recent legislative changes as well, and long existing legislation.
Typically, an independent party will prepare the scenario and review your responses which can be in written form or from an interview process. The process broadly takes the form of “What would you do if?” questions. Where there is a team of people it can be particularly helpful in understanding how much you all agree on the approach and how you can come together in a better way.
Having someone prepare it for you can often mean you are presented with situations which you haven’t previously thought of or might not occur to you but have occurred in other villages.
How long does it take?
Most stress tests take around 2 hours via an interview but will leave you thinking through the issues for long after the session is over.
Benefits
Stress tests usually make you think about a series of issues at once. This is because organisational issues usually do not present themselves on their own, and often it is the interplay between several issues which cause the largest problems.
This typically results in a substantial confidence boost. Management and consumers feel increased confidence that potential scenarios are considered, and that they are prepared for anything.
CSS Retirement Village Stress tests
- based on issues other villages have faced.
- designed as fun, engaging village scenarios but based on real problems
- supports villages to identify where their strengths and weaknesses
- tests knowledge of recent reforms.
Currently, CSS has the option of choosing one of 3 Stress Test Scenarios but also works with providers to tailor the test to their needs and their BCP where one is in place.
It involves a test scenario workshop session generally held over 2 hours on ZOOM and is followed up with the provision of a report of findings and recommendations.
Stress Tests: the research –
(Stress testing) contributes to a quick understanding of the components (which businesses need to) monitor, reconsider, or improve. Such stress testing helps enhance business agility.
Borio, C., Drehmann, M., & Tsatsaronis, K. (2014).
properly designed, stress tests can be quite effective as crisis management and resolution tools.
(Borio, C., Drehmann, M., & Tsatsaronis, K. (2014)
BCP Scenario Retirement Living 1: Managing Resident Turnover
Designed to test
1. Media Management: capacity and planning
2. Preparedness for competition from new villages
3. COVID-19 response and staffing levels
4. Managing social media
5. Planning upkeep of village environment
6. Managing Resident concerns
7. Knowledge of Elder Abuse legislation
8. Managing deteriorating residents
9. Staff contingency plans
10. Financial management
11. Refurbishment preparedness
BCP Scenario Retirement Living 2: Ageing Environment/Ageing Residents
Designed to test
1. Media Management capacity and planning
2. Emergency Planning
3. Complaint Management
4. Refurbishment issues5. Planning upkeep of village environment
6. Maintenance Planning
7. Making corporate decisions in the best interest of residents
8. Financial management
9. Refurbishment planning
10. Environment maintenance
BCP Scenario Retirement Living 3. Privacy & Independence, getting involved and legal issues.
Designed to test
1. Media Management: capacity and planning
2. Management of Illegal activity in the Village
3. Understanding of Elder Abuse
4. Testing of Elder Abuse Strategy.
5. Planning upkeep of village environment
6. Maintenance Planning
7. Decision making in the “best interest if the village
8. Ability to link Residents to services and supports
9. Managing disputes with residents.
[1] Bouwman, H., Heikkilä, J., Heikkilä, M., Leopold, C., & Haaker, T. (2018).
CSS Retirement Living BCP Tests are available from $1200 (excluding GST) contact us today
to discuss how a BCP test scenario can benefit your organisation – including aged care.
Contact: Fleur Hannen,
Email: fleur@cssconsulting.com.au or info@cssconsulting.com.au
Mobile: 0414588795 or Office: 02 90520292
