1. Make customer service the top priority. Getting attuned to staffing standards involves making sure you never have to refuse to provide service to someone who walks through the doors of your hospital. Hospitals able to satisfy patients’ needs for timely service will become known as quality providers, which in turn will support staffing levels. Keeping volume high will ensure staffing levels are not threatened, Mr. Taylor says.
2. Familiarize yourself with state requirements and use benchmarks to adjust staffing levels. Hospital staffing levels need to meet certain state standards, and hospitals must always make sure they meet those minimum requirements. As hospitals try to evaluate their labor costs, they must remain aware of these base staffing levels and not sink below them.
Once the minimum base staffing level is established, hospitals should adjust their staffing level to volume trends, relying on proven benchmarks to do so. For critical access hospitals, spending roughly 50 percent of net revenue on labor is a reasonable estimate, while larger hospitals with greater opportunities for creating efficiencies should spend roughly 42 percent of net revenue, Mr. Taylor says. “More specific benchmarks are provided by other companies, and they all help you get to a benchmark that is appropriate for your specific hospital,” he says.
3. Communicate staffing benchmarks to managers and department heads. An understanding of staffing benchmarks should be “driven down into the bowels of the organization,” Mr. Taylor says. “If you have a nurse manager who does not know what the standard is, it’s going to be very difficult to reduce staffing or reduce labor costs,” he explains. “It has to be driven down to that level so managers have a tool to work with.” Department managers should adjust staffing levels daily, or even by shift, based on fluctuations in volume.
4. Fight “FTE Creep.” Mr. Taylor says full-time-equivalent creep occurs when volumes increase and more employees are brought on board, and then volumes drop. “It’s an easy thing to add them, but it’s a difficult thing to reduce them,” he says. When volumes rise, limited use of overtime might be preferable in the short-term until it becomes clear whether the increase reflects a long-term trend or is just a spike. Hiring someone just to avoid overtime could easily backfire if volumes then return to lower levels.
5. Pay attention to the details. Employees who clock in before getting their morning coffee or clock out late, as well as those who routinely arrive late and leave early, need to be managed. Even a few minutes here and there can add up to unnecessary labor-cost increases, Mr. Taylor says. Software can help track and flag these slight variations in the schedule, allowing hospitals to better manage employees and avoid wasted money or lost productivity. “We want to pay them accurately and appropriately,” he says.
