3 factors driving high turnover at your hospital — and what to do about them
Healthcare is a labor-driven service that depends on the talent and skills of every staff member, from the C-suite to nurses. Finding and keeping this talent is paramount to running a cost-effective organization that provides exceptional care.
While most health systems seek to reduce turnover, many fail to understand its costs or causes and lack effective strategies to improve retention. About 81.8 percent of organizations say retention is a key strategic operative, but only 51.5 percent have formal retention plans, according to data from NSI Nursing Solutions' 2016 National Healthcare Retention and RN Staffing Report. Compared to other industries, healthcare ranked third highest in turnover rates at 18.9 percent, according to CompData's 2015 BenchmarkPro Survey of 28,000 organizations.
The financial burden of high turnover significantly impacts health systems. The turnover of a single physician represents at least a $200,000 loss for an organization, according to a 2016 report from B.E. Smith/AMN Healthcare. NSI Nursing Solution's report gives a conservative estimate that it costs at least $58,400 to replace each nurse — 1 to 1.5 times the salary of the employee — which adds up to a loss of $5.2 to $8.1 million annually, or $373,200 for every percentage point change to the turnover rate.
Outside of financial detriments, poor retention can also negatively impact continuity of care, training costs, staff workload and medical staff satisfaction, among other factors.
"When you look at estimates of turnover costs, people often dismiss the cost of productivity and the value of job performance," said Ted Kinney, PhD, director of research and development of Select International, during a webinar hosted by Becker's Healthcare and sponsored by Select International. "When you factor in replacement costs, recruiting costs — those hard costs associated with someone leaving — with the actual productivity, performance and impact on patients, that cost jumps considerably."
Dr. Kinney explained three main drivers that fuel turnover. Individual drivers revolve around employees' personal attributes — like impulsivity, adaptability and integrity — that make them more or less prone to turnover. Strategies to address this driver include performing behavioral assessments, providing a realistic job preview and using alternative recruiting strategies during the hiring process.
Many health systems often jump to the selection process when they're having problems with turnover and don't think about their own internal forces, such as workload, leadership and growth opportunities, that can impact an employee's decision to leave. According to Dr. Kinney, these internal factors are the biggest driver of turnover and therefore the single most important thing a health system can focus on to improve retention.
While internal drivers are crucial to acknowledge, external factors like the local labor economy and health system competition should also be considered when addressing turnover, said Dr. Kinney. Conducting a market analysis can serve as a helpful benchmark to other hospitals or careers and provide an indication of where the hospital is positioned in the local labor market.
To successfully address turnover, hospitals must understand the contributing individual, internal and external forces and implement interventions that address all three. Select International provides a series of data collection processes that help hospitals identify which factors to address to make the biggest impact on turnover. Hospitals can then develop an individualized system of turnover reduction that addresses their specific needs.
Lauren Lloyd, senior director of recruitment services delivery at Pittsburgh-based UPMC, worked with Select International to develop a unique UPMC values assessment that was integrated into the employment application process about nine months ago.
UPMC's recruiting team uses the assessment results to rank and prioritize the candidate pool based on how well their values and characteristics match the hospital's culture of service. After the assessment, hiring managers conduct behavioral-based interviews with candidates. The updated recruiting process has proven beneficial for UPMC. "We've already seen a decrease in our six-month turnover rate," said Ms. Lloyd. "It's not just about hiring someone who has the right clinical skills. How they work is actually just as important as the clinical work they do."
Hospital leadership also plays a huge role in talent management and retention, according to Scott Hopkins, director of leadership development at CHRISTUS Health. According to a 2015 Gallup survey of 7,200 individuals, 50 percent of people have quit their job because of a bad boss. At CHRISTUS Health, Mr. Hopkins promotes sustainable employee engagement by focusing on leadership development. Leaders are taught how to effectively communicate expectations to high, solid and low performers, and meet with HR business partners to develop individual leadership development plans. CHRISTUS also encourages a method of continuous learning to help employees grow into their roles at the hospital.
"The CHRISTUS experience is defined by the trust our associates have in their leaders and the trust that patients have with their caregivers," said Mr. Hopkins. "As we keep that sustainment and engagement for our employees, they are there to keep our patients safe, and that's really what it's all about."
Watch the presentation on YouTube here.
Download a copy of the presentation here.
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