'Quiet cutting' in hospitals: Outsourcing may be 1 example

At least 80 hospitals and health systems have laid off workers this year amid ongoing financial and operational challenges. With such challenges expected to continue for the foreseeable future, healthcare may be leaning into a new workforce trend to avert more hard layoffs: "Quiet cutting." 

In an Aug. 27 article, The Wall Street Journal reported on the trend in which companies avoid hard layoffs but still cut jobs by reassigning employees to different roles. From August 2022 to 2023, mentions of "reassignment" or similar terms more than tripled in company earnings calls. 

Executive coaches and advisors told the Journal that in many cases, reassignments can be a way for companies to avoid letting people go by offering them new roles that are better suited to meet organizational goals. In other cases, the motive is instead a soft nudge to get employees to quit by offering them new roles far below the pay and experience level of their original job, which then allows employers to avoid paying out severance or unemployment benefits.

Outsourcing may be one way the trend is showing up in the healthcare industry. 

In July, Greenville, S.C.-based Prisma Health entered into a partnership with Compass One to provide environmental services, affecting 689 jobs. A press release on the outsource said all employees working in environmental positions were given "an opportunity to become part of Compass One" and that "no positions will be eliminated," though there were no details on what would change for those choosing to stay on with Compass One. 

Earlier this month, Burlington, Mass.-based Tufts Medicine filed WARN documents indicating it plans to eliminate 574 jobs by outsourcing its outreach laboratory business and some operating assets to Labcorp. The agreement is expected to be finalized in October, and the health system previously told Becker's it plans to have the majority of laboratory employees receive comparable job offers through Lapcorp. 

Meanwhile, at least two hospitals and systems have said they plan to outsource IT jobs to reduce operating costs in recent weeks: Providence, R.I.-based Care New England recently said it would outsource some of its IT employees to health IT provider Kyndrel. In July, Franscican Alliance, the parent company of Mishawaka, Ind.-basd Francican Health Indianpolis said it plans to move 61 employees from its information services department to an outside company.

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