Healthcare's Billion Dollar Problem and How to Solve it.

?Over the last two years our nation’s gratitude has deepened toward essential workers, especially our appreciation of nurses. Their jobs involve long work hours. Their care for us and our loved ones is the literal backbone of the health of our society. It has become evident we, as a country, need to listen and learn. Nurses are unhappy with the burden of their positions. For our society to avoid a crisis in nursing, we need to study and understand the reasons nursing turnover is approaching crisis levels. We need to take action to ensure nurses are properly compensated and appreciated. ?

? Turnover in hospital settings has been a long-term problem, and many studies have been done to analyze the underlying issues (Price, 2001). When experienced nurses leave, they impact the hospital system in many ways. Loss of revenue is easily measured, but other aspects such as loss of institutional knowledge, loss of productivity related to tenured employees, and training and development investments made beyond onboarding can stack up quickly (Bliss, 2001).

? Social media has exposed us to the difficulty of a nurse’s life. The revelation of long hours, pressure, and a lack of industry standard in compensation has surprised many people, especially hospital administration staff. The heavy legal and moral responsibilities put onto the shoulders of nurses lead to burnout rates that are higher than other industries. It is no longer surprising when a nurse leaves their position to find work elsewhere.

? The recent drop in nurse retention rates nationwide calls for desperately needed employee experience research in the nursing field. How can employee research fill gaps in understanding where the health care system fails its employees? First, we must understand what it is that nurses are experiencing. Then we can understand the effect nursing staff experience has financially and learn what actions can be taken to solve this problem.

? Figuring out how to get employee research started in a hospital might seem complicated. However, the numbers behind the ‘why’ demonstrate how crucial it is to implement employee research strategies. The pandemic revealed the massive labor crisis the healthcare industry is facing and is the reason behind the urgency surrounding this topic.

? As hospitals nationwide frantically tried to keep up with demand, they struggled with turnover. With a 6.4% average increase in turnover and an average between 5.1% to 40.8% range in turnover from previous years (NSI, pg.2), the system was stressed. What does this look like for these hospitals on a financial level? NSI calculated based on the average turnover rates in 2022, this is cost hospitals $7.11 million a year (NSI, pg 8).

? More and more RNs experience employee burnout and are choosing to go into retirement. Hospitals and health care systems are experiencing increased competition for labor and are forced to hire traveling nurses to fill the growing need. The RN vacancy rate has now reached an all-time high at 17% (NSI, pg. 8). Travel nurses have been in high demand since the onset of the pandemic, as shortages in essential workers fought a losing battle with increasing numbers of patients. Travel nurses make roughly 2.5 times the salary of regular nursing staff and receive a daily allowance for housing and food.?Travel nurses have typically been compensated more generously because of the inconvenience of living away from home.?During the pandemic, the opportunity for long term assignments became more frequent, and travel nurses would work in one hospital for up to six weeks. Some contracts last as long as six months.?

? The staff nurses at those same hospitals would often be working the same long hours for significantly less pay and fewer benefits. Their tasks are functionally the same as a travel nurse working beside them who was being compensated more generously. Staff nurses took note, in frustration. The discrepancy was sharp.?Hospitals began to see attrition in higher numbers than before, and from nurses with long tenure. The problem being highlighted wasn’t that the travel nurses were overcompensated; the benefits and compensation of staff nurses were inadequate. Nurses began to voluntarily quit. Some chose retirement because of burnout. Many found better compensation with a travel nursing agency. Savvy competitor health systems smart enough to see the future poached nursing staff by bumping their pay and benefits, or by offering hefty sign on bonuses.

? Employee Experience (EX) research could have told them everything. When hospital systems began having to hire more travel nurses, they could have done a pulse check on their tenured staff. Instead, they lost valuable staff to travel nursing companies, and then required travel nurses to fill their void. In some ironic cases, hospitals may have hired their own former staff nurses, now employees of travel nursing agencies, to perform the same duties. By doing experience research, they could have bumped staff nurse pay and retained loyal employees at a significant cost savings per nurse. The amount of money hospitals save by hiring employed RN’s versus traveling RN’s is significant. On average health systems save $4,203,000 for every 20 traveling nurses they can replace (NSI, pg. 1) with full time RN staff.

? Employee Experience research is essential to understanding the satisfactions and struggles of staff members. The Great Resignation was a wake-up call for many industries, especially the health care industry. Investing in research to increase understanding of how to retain employees is crucial to remaining financially viable. Those who commit to a program of ongoing employee satisfaction measurement can not only retain their skilled staff, but they also create employees who are happy, healthy, and make fewer mistakes.?Understanding attrition drivers is the key to limiting attrition and ultimately, to the financial success of your business.

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Citations:

Bliss, W. G. (2001, August 6). Calculating the costs of employee turnover. Fairfield County Business Journal, p. 12.

NSI, N. S. (2022). 2022 NSI National Health Care Retention & RN Staffing Report. https://doi.org/https://www.nsinursingsolutions.com/Documents/Library/NSI_National_Health_Care_Retention_Report.pdf?

Price, J. (2001). Reflections on the determinants of voluntary turnover. International Journal of Manpower, 22(7), 600–624.