Key Insights from Argentum’s 2025 Forecast Report
The senior living industry stands at a pivotal moment. After years of pandemic-driven disruption, it has emerged as a beacon of resilience, overcoming significant workforce, operational, and economic challenges. Employment has rebounded to record levels, wages continue to grow, and demand for senior living services shows no signs of slowing. Yet, challenges persist: labor shortages, regional disparities, rising costs, and demographic pressures will demand a thoughtful, strategic approach.
Argentum’s 2025 Forecast Report offers an in-depth analysis of the trends shaping the year ahead, providing senior living leaders with a data-driven roadmap for success. From workforce recovery to economic headwinds and demographic shifts, the report outlines both challenges and opportunities for operators seeking to thrive in an evolving landscape.
Employment Surpasses Pre-Pandemic Levels—A Historic Milestone
For the first time, the senior living workforce is projected to exceed 1 million employees by the end of 2024. This milestone represents more than just a numerical achievement—it is a testament to the industry’s perseverance in the face of unprecedented challenges.
In the early days of the COVID-19 pandemic, the senior living industry faced catastrophic workforce losses. More than 105,000 jobs were eliminated as communities struggled to operate amid health concerns, financial pressures, and shifting regulations. By January 2022, employment levels were at their lowest since 2015.
The road to recovery was neither quick nor easy. Assisted living facilities led the rebound, surpassing pre-pandemic employment levels by early 2023. In contrast, continuing care retirement communities (CCRCs) have lagged behind, with workforce numbers remaining below 2019 levels through late 2024.
The uneven nature of this recovery is further reflected at the regional level. States such as Arizona, New Hampshire, and Idaho have led the charge, registering job growth above pre-pandemic levels. Meanwhile, regions such as the Midwest and parts of the South are still struggling to regain lost ground.
This milestone comes with a clear message: workforce recovery is possible, but it requires sustained effort and innovation. Operators will need to focus on targeted recruitment strategies and retention initiatives to ensure they maintain momentum as staffing needs continue to grow.
Balancing Wages and Sustainability
For nearly a decade, wages in the senior living industry have consistently outpaced those of the private sector. Between 2019 and 2024, hourly earnings for senior living employees increased by 33%, a notable jump compared to the private sector’s 25% growth during the same period. This wage growth highlights the fierce competition for talent and the sector’s reliance on strong, dedicated workers.
However, there are signs of moderation ahead. The 2025 Forecast Report projects that wages will grow at a slower pace—3.8% in 2025, compared to 4.8% in 2024. This deceleration offers some financial relief for operators navigating tight margins, yet the need for competitive compensation remains critical.
Turnover remains an ongoing concern. While overall healthcare turnover rates have declined from the pandemic peak of 45%, they remain stubbornly high at 40%—still well above pre-pandemic norms. At the heart of this issue is employee-initiated turnover. Workers are leaving for opportunities elsewhere, often lured by sectors like hospitality, retail, and professional services.
For senior living operators, retaining talent in a competitive labor market will demand more than just wage adjustments. Investment in professional development, career pathways, and workplace culture will play a central role in reducing turnover and stabilizing the workforce.
Economic Factors: Growth, Inflation, and Rising Costs
The senior living industry does not operate in isolation; it is directly impacted by broader economic forces. In 2025, the U.S. economy is expected to grow at a rate of 2.2%—a slowdown from the 2.7% growth projected for 2024. While this marks a moderation, it also represents a fifth consecutive year of positive economic growth, something the U.S. has not seen in decades.
Several factors underpin this cautiously optimistic outlook. The labor market remains resilient, with declining unemployment and steady wage gains providing a strong foundation for consumer spending. Inflation, while still elevated in some categories, is expected to trend lower, with the overall rate projected to decline to 2.3% in 2025.
This inflation moderation will provide some relief on key cost drivers for senior living operators. Notably:
- Energy Costs: Natural gas and fuel prices are expected to decline in 2025, helping to offset other rising expenses. For operators, this translates to savings in heating, cooling, and transportation costs.
- Food Prices: Conversely, food costs are projected to increase, particularly in essential categories like protein and produce. Operators will need to carefully manage procurement strategies and dining program efficiencies to mitigate these rising costs.
The balance between these economic tailwinds and headwinds underscores the importance of operational agility. Leaders must continue to monitor cost drivers, leverage supplier partnerships, and embrace efficiencies to maintain financial resilience in the year ahead.
Demographic Trends: Opportunity for Growth
As the 85+ population continues to expand, the senior living industry is well-positioned to meet growing demand for its services. This age group remains the most likely to require senior living solutions, making its rapid growth a key opportunity for the sector.
Simultaneously, the labor force itself is aging, with older workers (65+) emerging as the fastest-growing workforce demographic. Over the next decade, an additional 3.6 million workers aged 65 and older will enter the labor market. For senior living operators, this trend represents a unique opportunity to address workforce shortages by expanding and diversifying their talent pipeline.
Older workers bring a wealth of experience, reliability, and institutional knowledge—qualities that are particularly valuable in senior living communities. By embracing these demographic shifts, operators can not only address staffing challenges but also enhance the quality of care and service delivery.
Strategic Planning for the Future
The 2025 Forecast Report delivers a clear message: Resilience is not enough. The senior living industry must remain proactive, innovative, and data-driven as it prepares for the year ahead. Key priorities include:
- Addressing Workforce Shortages: Recruitment and retention strategies will be essential, particularly as competition for workers remains high. Operators must invest in training programs, career pathways, and workplace culture to stabilize staffing.
- Managing Rising Costs: While energy prices offer some relief, rising food costs and wage pressures will demand ongoing attention. Strategic cost management will be critical to operational sustainability.
- Leveraging Demographic Trends: The growing 85+ population and increasing workforce participation among older adults present unique opportunities for growth. Operators must adapt their workforce strategies and service offerings to meet these shifts.
- Staying Agile Amid Economic Uncertainty: While economic growth is expected to continue, geopolitical risks and global headwinds remain. Operators must remain vigilant, agile, and ready to adapt to changing conditions.
Download the Roadmap to Success
The 2025 Forecast Report is more than just a collection of data—it is a strategic guide for senior living leaders seeking to navigate the year ahead. By offering actionable insights into workforce recovery, economic trends, and demographic opportunities, the report equips operators with the knowledge they need to make informed decisions.
Argentum members can download the full report for free, unlocking critical data and analysis to drive their organizations forward. For non-members, the report is available for purchase at $295—a small investment for insights that will shape the future of senior living.
The path ahead will not be without its challenges, but the senior living industry has already proven its resilience. By embracing innovation, data-driven planning, and proactive leadership, senior living leaders can position their organizations for long-term success in 2025 and beyond.
To access the full 2025 Forecast Report and chart your course for the future, visit https://www.argentum.org/forecast_report/.
