AR: Being honest, that is not our product. We operate at the top end of the sector. That is the model we have gone with. We have deployed very successfully in the South-East, and that is what we do. We are about providing the best possible care delivered by people that are really passionate about what they do.
We do have some of the same challenges that face other operators, particularly from a staffing perspective. We have the same difficulty hiring qualified nurses in the UK. We have the same interesting challenges around creating a compelling employee value proposition, particularly for people like carers and nurses for whom it is not all about money. It is also about career development and a fulfilling job.
This is something that has to be delivered, not just by us but by everybody in the sector. Right now we have a shortage of over 20,000 nurses in the UK across health and social care.
The biggest single factor as an operator is attracting those people who really resonate with your value set, who feel like they are working in a company that really cares about what they do, that cares about their development. When it comes to the whole care home sector, we are exactly the same as them in this respect.
CHP: Do you believe you outperform competitors in terms of recruiting and retaining the best talent?
AR: I think we are getting better, but we can improve. We have invested a lot in this over the past 18 months. We are going to open 5-6 homes in 2017-18 and the lead into that is a whole programme that involves a massive amount of recruitment. Each of our new homes will employ around 120 people, so we need to have a very clear strategy to ensure we employ the right people.
We are at the top end of the market with great environments, but to ensure you have the right teams in place you have to make sure that the recruitment and induction process is robust, that people are being developed, that there is a talent management process in play. We need to identify the stars of the future and make sure they are being properly supported and mentored. That is the real challenge.
CHP: What are your greatest concerns if you look five years or more ahead?
AR: From a Signature point of view, we are in the best locations around the M25, so property values are a concern. From a customer point of view, we want people to be able to release equity in their properties.
It is all about people. This is a huge people business. There are huge challenges around recruitment. We want to be the employer of choice so we need to work out how we differentiate ourselves and get that message across.
We have just taken on a very experienced HR director because we are at the level now, with over 1,200 employees, where we need to ensure that the culture of the company is continually endorsed by senior management and permeates its way through to all levels. I think that is going to be powerful for our business.
CHP: What does your leadership team look like?
AR: I started the business with Cabot Square Capital, a private equity company, as financial director. Initially I was involved in a lot of fundraising, which was interesting. My background has been in hotels, holiday parks, even the pub trade back in 1989.
If you look at the senior leadership team today, we have a broad range of skills and a lot of experience. My team comprises a sales and marketing director, a seasoned development and construction director, an operations director who has a nursing background and has been general manager of one of our successful homes. I have a commercial director who looks after all the investor relations side of things. I have a financial director who also supports operations, and I have a care quality director, who monitors compliance and governance.
In addition, we have just recruited an experienced HR director who will focus on organisational development. She starts in April.
CHP: Do your investors have an exit in mind, or it all about yield over the long term?
AR: It depends who it is. If it is a long term yielding REIT, that is more of a long play. If it is more hawkish equity, it can be more of a 5-7 year play. We started life attracting more of the private equity players, but we are now looking much more at long term yield investors.
CHP: Some of the largest care home groups in the UK would look a lot more healthy if they weren’t burdened with debt and elaborate financial arrangements. Is this something Signature is avoiding?
AR: I think that debt is a problem for some companies. For Signature, we believe that our capital partners are extremely important allies. They have to resonate with the ethos of the business and understand the key drivers. It is a true partnership and we are grateful for the energy and support they bring to the table.
In other capital structures, it can be more of a strained relationship. If you have some of these funky capital structures, it can put a lot of strain on the management of the business.