4 Ways to Cut the Cost of Turnover in Healthcare Staffing

Last Updated on April 24, 2024

4 Ways to Cut the Cost of Turnover in Healthcare Staffing

Turnover has always been a challenge in healthcare. But never more so than today, as surging rates of turnover take up a larger and bigger share of labor budgets. Moreover, the real cost of turnover in healthcare can cut much deeper than that, affecting staff morale, patient satisfaction and even clinical outcomes.

How can employers calculate and mitigate the real cost of turnover in healthcare staffing? Discover direct and indirect costs of turnover, and how it affects other key operational components like safety, patient outcomes, efficiency, and morale — along with a few ways to combat it.

How Covid-19 Changed Turnover

The total number of employees who leave a company over a certain period — either voluntarily or not — turnover is an inevitable part of business in any industry. When closely managed, it plays a critical role in maintaining an effective workforce. For instance, turnover helps leaders evolve positions to meet new needs and implement new staffing models, among other benefits.

A new study from January 2024 is the latest to confirm that turnover surged as a result of the pandemic. When Covid-19 first hit, many workers powered through out of a sense of duty and obligation to patient health. But turnover skyrocketed in the subsequent “great resignation.”

True, many hospitals and health centers have seen turnover return to relatively normal. But high rates persist in certain parts of the country and in specific departments, like behavioral health and emergency medicine. And turnover is still rising for skilled nursing and long-term care (LTC) providers, many of which are already struggling with tougher post-pandemic staffing ratios.

In 2022, hospital turnover rates decreased to 19.5% after reaching up to 26% the year before, according to an Oracle report. During that same year, turnover reached as high as 65% for home care providers, and a whopping 94% for nursing facilities.

Calculating the Cost of Turnover in Healthcare Staffing

Although the exact amount varies by factors like geography, specialty, and facility, it now costs providers as much as $58,000 to replace a nurse, as per the Oracle report. This generally amounts to between six and nine months of pay for that position. However, the cost of replacing “highly specialized” workers can reach as high as 200%, they warn.

> Stay on top of average nursing pay with our 2023-2024 Nurse Salary Guide for Employers

Even at the low end, replacing just 20 nurses per year adds up to more than a million dollars. For organizations that turn over dozens or even hundreds of nurses on a quarterly basis, the costs quickly escalate.

What’s Driving the High Cost of Turnover in Healthcare?

Yet high as they are, these numbers don’t cover the full cost of turnover in healthcare. They account for the direct costs to source, hire, and onboard new staff, and severance paid to departed employees. They may also include other measurable expenses, such as hiring fill-in contractors.

But other, indirect costs of turnover in healthcare can be harder to quantify. For instance, the more time managers spend hiring and training, the less they spend on other initiatives, particularly patient care. Because high turnover usually means overtime and extra shifts, turnover can also harm employee morale, further hurting retention efforts.

Losing core staff without an immediate prospect for backfilling their position can leave facilities unable to provide core clinical services. This can harm continuity of care and, by extension, outcomes. It can also negatively affect patient satisfaction, which can lead to a damaged reputation and the loss of referrals and new business.

4 Ways to Fight Turnover in Healthcare Staffing

Equipped with a clearer understanding of its costs and causes, what can leaders do to curb turnover? The short answer: Hire smarter, train better, and work to improve your core staff’s day-to-day life and career fulfillment. And here are a few ways to do just that.  

#1: Improve Scheduling

One of the more frequent complaints in the recent nursing strikes are the demanding schedules imposed on workers. When a facility is short-staffed, it’s hard to avoid extra work for core employees. But this burden can be eased with an updated approach to scheduling that integrates direct feedback and advanced technology to give workers a better work/life balance.

> Read more about how to improve scheduling with healthcare MSP.

#2: Promote Training & Development

Many states require nurses and clinicians to earn continuing education (CE) credits to maintain their license. Supporting clinical professional development pursuits offers a number of direct benefits to employers. It expands an organization’s skillset while boosting job satisfaction, for starters. The Oracle authors recommend also offering training in “soft skills” like “management, communications, and ethics.”

#3: Intentional Hiring & Upgraded Onboarding

Being intentional with hiring means making the effort to customize each job description to fit the open role. And that mindset should extend to the onboarding and training process, where special care should be taken to encourage new workers with mentorship programs, customized development programs, and a personal, engaging approach to essential training.

Yes, this process will take more time. But the costs saved in employee retention, and the benefits of a stronger culture, will easily justify them. And enlisting the help of a specialized workforce solutions partner can help ensure that these new processes are implemented smoothly, efficiently, and effectively.

#4: Set a Contingency Staffing Strategy

From hospitals to nursing homes, temp workers and travel nurses have become an essential feature in virtually every healthcare workplace. And, while some may balk at the perceived expense of using contingency staff, these skilled workers, when used strategically, can help managers avoid the high cost of overtime, and even keep turnover low by creating a healthier workplace for core staff.  

Pro tip: Getting the best use of travelers means preparing core staff. Leaders should emphasize that contingency staff is a temporary necessity, “but the ultimate intention is not to bring in traveling techs or to minimize the current staff in any way,” one expert advises. Instead, encourage staff to work productively with them “so they can better understand how to create a better environment.”  

> What’s it take to implement a successful contingency staffing strategy? Find out here.

Fight the High Cost of Turnover with CareerStaff

Reducing turnover is about more than cost containment. It’s about better supporting core staff in a way that secures an organization’s future. It’s an important goal, and one that takes expertise.

As one of the nation’s leading providers of healthcare staffing and managed services, CareerStaff offers not just advanced contingency staffing services, but also the strategic guidance needed to put them to the best possible use. With locations across the United States, we have the personnel you need, in the places you need them, to contain the cost of turnover and preserve continuity of care.

Contact us today for more info on how our Joint Commission-Certified healthcare workforce solutions can help your organization. Or fill out our quick form to request staff now!

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