Nursing is the largest single component of the hospital workforce. Nothing has a greater impact on hospital culture and success than the quality of nursing leadership and the front line care providers. From the Director of Nursing to the nursing assistants, nursing performance drives quality metrics, cost control efforts, and patient satisfaction.
According to the 2012/2013 U.S. Human Capital Effectiveness Report by PricewaterhouseCoopers Saratoga, first year turnover in the hospital sector is 28.3% which is significantly higher than the rest of U.S. industries at 21.5%. More worrisome, first year turnover is increasing, with 22.2% of new nurses leaving after their first year.
Reducing turnover presents substantial cost savings opportunities. The PwC report estimates the cost of turnover as 1.5 times the base salary for exempt employees. This is consistent with human resources industry standards and some estimate it at twice the base salary. The average hospital is estimated to lose about $300,000 per year for each percentage increase in annual nurse turnover.
A Complex Problem
The causes of turnover vary within and across healthcare systems. Based on research and hundreds of nursing focus groups, our consultants have identified the most common causes of turnover. Nurses are rarely terminated because of poor technical or clinical skills. The most cited reasons for involuntary terminations are lack of dependability or professionalism and poor decision-making skills.
Selecting the right candidates is the ideal place to begin reducing turnover and improving performance.
Consider some of causes of turnover that can be addressed through selection:
- Involuntary terminations. Nearly always related to personality traits and interpersonal behaviors - dependability, professionalism, a lack of emotional intelligence, or poor decision making. These behaviors that have nothing to do with technical knowledge and behaviors that are poorly evaluated in the traditional hiring process.
- Workload. Workloads are going to increase, as are demands to constantly roll out new quality and cost control initiatives. Evaluating a candidate’s ability to adapt and handle stress prior to making a job offer becomes important. Similarly, it’s important to ensure a good cultural and operational fit with the organization.
- Relationship with supervisors. Nursing must do a better job identifying candidates for leadership and management roles. Assess each supervisor candidate’s leadership potential so that great nurses do not become poor leaders.
- Relationship with colleagues. The desire and ability to collaborate with others is difficult to train. However, it is possible to assess a nursing candidate’s abilities and propensities in regard to teamwork before the job offer.
- Define important behavioral competencies. Traditional selection strategies do an adequate job evaluating knowledge, training, and technical skills. Where they fail is in the areas of motivational fit (work schedule, pace of work, amount of autonomy or teamwork, and time spent with patients), and behavioral competencies. These include emotional intelligence, collaboration, patient focus and adaptability.
- Become better at interviewing candidates. Traditional, unstructured interviews have no predictive validity. You may as well flip a coin. Start with a concise, easy to use interview guide built around validated job competencies.
- Use proven behavioral assessments to examine functional competencies. Nearly 75% of successful companies in other industries increase their odds of selecting the right candidate, and reducing turnover, with pre-employment behavioral assessments. Healthcare is catching on. Nothing is more effective at evaluating motivational fit factors and behavioral competencies than a well-designed, healthcare-specific assessment designed for selection.
Nursing turnover is a complex, costly problem. Committing resources to solving it should be easy, based on its operational impact, but it may be necessary to make the business case, citing the substantial costs of turnover. It requires a thoughtful and comprehensive strategy but starts with a structured and diligent three-step selection process.