Patrick Ryan, CEO of Press Ganey recently co-wrote an article for the Harvard Business Review with Thomas Lee, the Chief Medical Officer at Press Ganey, entitled "What makes health care workers stay in their jobs?" It's a timely and relevant article given many of the challenges that health care organizations have faced during the last three or so years. The opening sentence of the article is perfect - "Ask leaders of health care organizations about their top three challenges for the year ahead, and many answer 'Workforce, workforce, and workforce.'"
Health care leaders are struggling to recruit and retain providers. We've heard a lot about the national shortage of nurses, largely driven by an aging population with greater health care needs, increasing nurse burnout (particularly relevant during the COVID-19 pandemic), and a limited number of degree-granting training programs in the United States. Even before the COVID-19 pandemic, there was a growing gap between the supply and demand for nurses in health care organizations (in the wrong way), which has grown even wider during the pandemic. In order to meet the demand, health care organizations have traditionally hired temporary nurses from staffing agencies. Unfortunately, the cost of temporary nurses have skyrocketed, and with the rising supply chain costs, hospital margins have remained negative for the past several months.
While nurses are among the most sought after health care professionals today, they are not the only ones. Health care organizations are faced with labor shortages across the board. And since recruiting for all of these positions continues to be a challenge, retaining staff has become an organizational imperative! Becker's Hospital Review recently reported that the average cost of turnover for one staff RN increased by 13.5 percent from 2021 to 2022 to $52,350. Each percentage decrease in RN turnover will save the average hospital $380, 600 per year. The cost of physician turnover is less clear, as it usually depends upon the specialty. However, most studies estimate that turnover costs are roughly 2-3 times the physician's salary with a range between $88,000 to $1 million per physician. Lastly, while maybe not as relevant to health care organizations (I would argue that it is relevant), an analysis of financial services companies found that workers promoted internally have significantly better performance for the first two years (the analysis did not extend beyond that time-frame) than workers hired from outside the organization. Just as important, the external hires costed 18% more than the internal ones. So not only is it much less expensive to retain employees, but it also is better for organizational performance.
So back to the article from Harvard Business Review - how can health care organizations make sure that they keep their best employees? Press Ganey analyzed their database of literally hundreds of thousands of employee experience data for physicians, nurses, and allied health providers and found that (1) pride in their work and (2) loyalty to their colleagues were the two strongest drivers of their desire to stay at their current organization. Ryan and Lee summarized their findings by saying, "While competitive pay and other support options are essential to recruiting caregivers...organizational culture, including a commitment to excellence, is what makes them stay."
The Press Ganey survey asks providers to rate their level of agreement to two highly relevant statements: "I would stay with this organization if offered a similar position elsewhere" and "I would like to be working at this organization three years from now." They observed a marked decline in both metrics from 2020 to 2022. However, the pattern of decline was not the same for every organization or every position (physician, nurse, etc). Their analysis showed greater variation, a "spreading of the pack" if you will, between organizations that were doing well in terms of employee engagement versus those who were not.
Regardless of job type, the organization's commitment to quality and patient-centered care were among the top drivers of providers' willingness to stay at an organization. If they rated an organization low on these drivers, providers were six times as likely to say that they were preparing to leave! For physicians specifically, the top factors that were correlated with their expressed likelihood of staying with the organization were (1) whether they liked their work, (2) whether they felt the organization was making good use of their skills, and (3) organizational culture. These findings are similar to a study published last November in JAMA Health Forum which found that the "intent to leave" among physicians had increased from 24% in 2019 to more than 40% in 2021. Again, "feeling valued", "good teamwork", and "having values that are aligned with those of leaders" were the three strongest predictors of staying with the organization.
These staffing challenges likely won't change, at least in the near term. Keeping an engaged and productive workforce for the future requires a collective effort. It will also require leadership. Health care leaders need to focus on "the 5 R's":
1. Recruit new staff. Keep in mind though that for all of the reasons discussed above, this shouldn't necessarily be the first priority (retention should be the first priority).
2. Retain staff. Remember, it is less expensive to replace your experienced providers with new ones, who not only will be more expensive, they may not be as experienced or as productive.
3. Remove waste, particularly the kind of wasted effort that decreases productivity and engagement.
4. Replace non-productive work with productive work (similar to #4 above).
5. Re-allocate staff to areas or jobs where they can work at the top of their license.
Finally, there is an old adage that "Culture eats strategy for lunch", and when it comes to staff engagement, nothing is more important than organizational culture. As leaders, we need to foster a culture of collaboration, teamwork, and mutual respect, where everyone feels like they are valuable members of the team. And making staff feel valued starts with gratitude, which I will cover in my next post.
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