How an overtime rate greater than 3% drains an organization and burns out employees

What word causes blood pressures to rise and frustrates both staff and employers?

Overtime. A workforce struggle that spans the ages, overtime has its time and place in nearly every industry. But excessive overtime is a pain point for many organizations and burns out employees.

What constitutes an excessive amount of overtime? In general, a healthy overtime average for a typical organization sits around 3%. Leadership should be evaluating overtime greater than 3%.

In the world of inpatient care, core staff working overtime may be needed in order to reach optimal staffing levels during times of greatest need. As census fluctuates, core staff can occasionally flex up to meet this demand, but this should be a very infrequent source of contingency hours. Core staff working in overtime as a major and ongoing source to fill contingency needs is not only a leading cause of staff burnout and dissatisfaction, but it also reduces the availability of these individuals during times of high need, straining the organization and potentially affecting patient care.

Overtime is just one of the contingency defenses an organization should have to meet demand. Depending on the size of the health system, there are many types of contingency staff resources an organization can have to flex up to patient demand – such as float pool, PRN, and agency.

Every organization has its own reason for excessive overtime, including not having an enterprise staffing mentality. A lack of transparency across the facility or system and failure to share resources drives up labor costs and frustrates staff. If an organization has a cancellation percentage that exceeds overtime, this is a warning sign that resources are not being allocated appropriately. Having shifts frequently cancelled is just as frustrating for staff as being overworked, as they count on working their expected schedule to have a reliable paycheck.

A significant cause of excessive overtime is an imbalance of having the right amount and mix of resources (i.e. core and contingency staff). Despite popular belief, there is no fixed ratio of core to contingency staff that serves the need of every health system.

An obvious reason for excessive overtime is not having enough core staff. The objective is to hire the number of core staff needed to keep them working to their FTE commitment without the need for excessive floating or overtime.

An organization may also not have the right amount or layers of contingency resources – such as enterprise float pools or PRN. How many layers and their size varies depending on an organization’s size and its unique challenges. The process for determining size and layering involves analysis of core staff and trends (expected and unexpected time off, etc.), historical census levels and acuity spikes, predicted future census, staffing levels, and various HR information.

Additionally, programs or scheduling practices that allow for built-in overtime should be eliminated. Overtime should only be scheduled after all core staff resources have been scheduled up to full FTE commitments and attempts to offer shifts to those in extra hours have been made.

In 2014, Penn State Health Milton S. Hershey Medical Center set goals to optimize their workforce and reduce overtime hours, which made up 2.52% of total paid hours in fiscal year 2014. Focusing on ensuring core staff levels were hired appropriately and implementing a scheduling software powered by predictive analytics, the Milton S. Hershey Medical Center strived to balance schedules and make sure they were maximizing their resources without scheduling into overtime.

In May 2014, the average overtime hours per patient day for inpatient units was 0.28. By May 2015, Hershey Medical Center had reduced its average overtime hours to 0.17. Many initiatives led to the decrease in overtime, including implementing a dynamic scheduling software, adopting enterprise staffing strategies, and creating opportunities for sharing of resources. Since fiscal year 2016, Hershey Medical Center has been able to sustain an overtime percentage of total hours of around 2% – down from 3.19% in FY2012.

It is a significant initiative to decrease overtime, and organizations must be cognizant of the fact that decreasing overtime may result in a situation in which those hours are being filled by other types of contingency resources, such as agency. Penn State Health has solved this by establishing a best practice of reviewing their balance of core and contingency resources biannually.

It takes strategic planning and firm commitment to take actions to reduce overtime. Ensuring an organization has the right amount and mix of core and contingency resources is a good starting place. Embracing an enterprise mentality that freely shares resources and leverages workforce optimization further helps reduce core staff working in overtime.

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