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Challenges Facing Leadership Selection in Healthcare

September 21, 2017

healthcare-leadership-selection.jpgWe were thrilled to be at the year’s largest gathering of healthcare human resources professionals – ASHHRA’s annual meeting! I was particularly honored this year to present with Lisa Reynolds, Vice President of Talent Management for CHRISTUS Health.

Lisa leads the overall vision, strategy, standards and protocols for the Talent Management Center of Excellence at CHRISTUS which includes Leadership Development, Workforce Planning, Performance Management, Career and Succession Management, Learning and Capability Development and technology to support Talent Management.  She has an MBA with a healthcare emphasis, and a PhD in Leadership Studies.  She’s passionate about what she does and her team’s support of the CHRISTUS mission.

Lisa’s team has put in place a program of selecting, onboarding, and then coaching and developing leaders that has reduced their leadership turnover by over 50%!

For those who weren’t able to join us, here’s a brief summary of what we discussed:

Today’s senior leaders are facing unprecedented challenges.

  • Integrated Health Systems are in the business of providing care AND paying for it. Leaders need to understand and manage complex lines of business.

  • Consolidation and Growth as large systems continue to grow and smaller systems merge to keep pace. Even single hospitals often have insurance products and a network of employed physicians.

  • Uncertainty systems are facing with an almost unmanageable state of regulatory flux.

As the industry continues to evolve, it is vital to find, onboard, and retain senior level talent that can help an organization navigate these uncharted territories. Organizations can’t leave this to chance, and need to find these individuals and make sure they stay. Which bring us to our next point.

Healthcare senior leader turnover is at 18% and it hurts.

This is significantly higher than other industries. Some studies, like this one, indicate that almost 50% more healthcare leaders leave their organizations.

Here’s some food for thought. Replacing a mid-level to senior executive can cost anywhere from $50,000 to more than $200,000, and according to other estimates, that impact can be as much as 2-3x the individual’s salary! In the case of an executive, that could be somewhere between $400,000 to $600,000.

Plus, the loss of key leaders has a huge impact on:

  • Strategic planning and service development

  • Physician and employee engagement

  • Organizational Culture

Whether this attrition is voluntary or not, the cost associated with this loss can be astounding and sometimes debilitating.

There is a big gap in leadership competencies.

We not only need to keep good talent, but we need to think about what it takes to lead in today’s evolving market. A Center for Creative Leadership study (of over 35,000 healthcare leaders) found that the number one rated competency in terms of importance for organizational success – leading and growing talent – was also the number one gap in those same leaders’ skillsets.

That’s why it’s important to think strategically about the behavioral competencies that we need/want to bring into the organization – those that are in line with the ability to execute on our business strategies. We need to measure those competencies in the selection process, and bring individuals with those competencies into the organization.

We encourage our clients to use MULTIPLE data sources to find out important information about a person:

  • Performance: What have they done/accomplished which you can tell through a resume review?

  • Perception: How has their performance been perceived by others (through a 360, or in the case of selection, a reference)?

  • Potential: This is the real gold mine. This is information that you can’t otherwise get through those other methods and where you really find out the true depth of those behavioral competencies.

Do you have an onboarding and retention strategy?

A 2016 National healthcare and RN Staffing Report found that while an overwhelming majority (85.7%) or organizations view retention as a “key strategic imperative,” less than half (43.4%) have translated these into a formal retention strategy. That’s a serious disconnect!

Research shows that almost 25% of executive turnover occurs within the first 12-18 months of tenure and the median tenure of a hospital executive is only 3.5 years.

There are a few different reasons why new hires leave in this short period of time:

  • They don’t feel a strong connection to their peers, their leaders, or the organization

  • They feel like they are underperforming

  • They decide usually within the first 3 weeks if they “fit” or they don’t

An investment in onboarding can not only increase first year retention by 25%, but can also increase performance, boost engagement, and decrease time to productivity.

Are your leaders engaged?

A Center for Creative Leadership study found that 50% of new leaders feel ineffective, and 60% of leaders receive NO development. Which are astounding statistics.

At the executive level, a strong focus on coaching and development can have a serious impact. A Bersin by Delotte study found organizations with excellent cultural support for coaching have 75% higher talent management results and 13% stronger business results than those who have no or weak support for coaching.

Executive coaching is related to:

  • Improved productivity

  • Increased collaboration and teamwork

  • Stress Reduction

  • Executive engagement

  • Retention

Our leadership solutions team helps our healthcare clients in several areas, including:

  • Building leadership competency models

  • Creating a more consistent, user-friendly leader selection process

  • Adding objectivity to leader selection

  • Choosing participants for leadership training programs

  • Incorporation assessment tools into leadership development efforts

Research continues to show that these approaches, and the types of programs implemented by Lisa and her team at CHRISTUS Health correlate with better patient and employee engagement scores, employee productivity, turnover, the ability to fill open executive positions internally, and diversity.

To learn more, download our free whitepaper:

healthcare leadership

Laurie Wasko, Ph.D. Laurie Wasko, Ph.D. was the Director of Consulting Services at PSI.