How to manage labor shortages, rising compensation, retention and workforce expectations

Persistent labor shortages, rising compensation costs for permanent and contingent employees and employee expectations present significant challenges. 

Adam Rousey, Senior Vice President at VISTA Staffing Solutions, reported that recent surveys showed for the first time in 20 years, personnel shortages are the top concern for hospital CEOs. 

During a roundtable session at the Becker's Hospital Review 12th Annual Meeting sponsored by VISTA Staffing Solutions, Mr. Rousey was joined by two other healthcare staffing experts: Mansoor Khan, MD, Chief Clinical Officer at Envoy Envision Healthcare, and Andrea Nelson, Chief Operating Officer at VISTA. They facilitated a discussion among healthcare executives regarding staffing issues and solutions. 

Four key takeaways:

  1. Provider shortages and physician burnout are top concerns; contingent staffing is only part of the solution. According to Mr. Rousey, a survey by VISTA found that 78 percent of respondents saw provider shortages and physician burnout as the most significant challenges in their organizations. Ms. Nelson said that when it comes to using contingent staffing to help alleviate these issues, it requires balancing healthcare systems financial goals while filling service line gaps. "In those cases where facilities are more rural or more difficult to staff, we are seeing overall labor cost and staffing concerns that are even more strenuous, she said.

  2. Retention initiatives need to focus on a positive culture, flexibility and lifestyle benefits. Dr. Khan has had many discussions about what's important to clinicians. He finds it's "always about the soft stuff. Does my clinical leader care about me? ... Trying to offer things like paternity leave — those things people really care about. Another big part of it is camaraderie," he said. "For instance, we used to give every site $2,000 a year so the medical director could take the team out for drinks or get pizza for the nursing staff. Those little things make a huge difference."

  3. To manage rising compensation costs, strategy must be tightly focused on key challenges. Mr. Rousey noted that one-third of hospitals have a negative operating margin. "Some labor and contingent labor costs are 200 percent above where they were in 2019," he said.

    Ms. Nelson emphasized partnership as part of the solution. "We have a very aligned partnership with Dr. Khan's organization," she said. "We know his organization's growth and we focus our resources to support that. We can manage some of his cost containment because, working together, we understand the opportunity, what our pipeline looks like and existing market constraints."

  4. Creativity is key to managing workforce expectations. It's important to regularly listen to employees about what's important to them. In many cases, non-compensation issues such as work-life balance and career development are as important as money. In addition, roundtable participants shared that providing project leadership opportunities can help identify future leaders.

    "We provide compensated, short directorship roles for our physicians," one participant said. "We let them come in and see how hard it is to keep stakeholders engaged and how difficult it is to lead through influence rather than authority. That can give somebody a taste of what leadership looks like in a low-risk environment."

    Another participant described his organization's leadership training course. "Each cohort member has to do a project, and half of them don't even complete it. The ones that can — those are the ones who become your future department chairs."

Judiciously using contingent staffing solutions along with focusing on long-term culture and compensation improvements, based on employees' wants and needs, can help healthcare organizations address ongoing staffing challenges.

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