As healthcare organizations struggle with employee burnout and staff retention, they're making several changes to compensation.
Five trends to know when it comes to compensation, as reported by Becker's:
1. The cost of labor is outpacing the number of hours employees are working. This suggests that hospitals are paying a lot more than usual because of staffing shortages, according to a Nov. 1 Kaufman Hall report. Although hospital revenue and volumes increased in September compared to 2020, higher expenses made margins decline.
2. This doesn't mean employees are working less. The number of overtime hours employees worked increased by 52 percent in September 2021 compared to 2019, according to an analysis from Premier. But overtime work costs more, the report also shows. Employers are paying over 50 percent more for overtime work and/or use of agency staff than they normally would.
3. Turnover rates have increased because of burnout. The annual turnover rate in emergency, intensive care unit and nursing departments increased from 18 percent pre-pandemic to 30 percent this year. The cost of turnover is expensive. The average cost of turnover in 2020 for a bedside registered nurse was $40,038, according the "2021 NSI National Health Care Retention & RN Staffing Report." Each percent change in nurse turnover costs or saves the average hospital $270,800 per year.
4. Turnover is forcing hospitals to turn to contract employees and temporary labor. Agency staff and temporary labor is up 132 percent for full-time workers and 131 percent for part-time, Premier shows. But these positions charge more than someone directly employed by a hospital. Travel nurses made on average $1,673 per week pre-pandemic, but now can make more than $4,000 per week in some cases, according to Sumner College.
5. Hospitals are investing more in employee compensation to help retention. They are doing this through pay increases and "thank you" bonuses for their work during COVID-19. Several hospital executives told Becker's these bonuses did help with retention, as they acknowledged employees' hard work.