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Healthcare Turnover is 30% Worse than other Industries - The Role of Selection Strategies

December 17, 2015


According to a recent report, U.S. industries see first year turnover of 21.5% but in the hospital sector it’s 28.3%. As many as 22.2% of nurses will leave after their first year.

Turnover has a real bottom line impact. Consider a hospital with 2,000 employees of whom 35% (700) are nurses. Average annual base salary is $67,000 and annual turnover is 20%. Assuming turnover cost of 1.5x average annual base salary, cutting turnover in half could save $7M! 139911315

This cycle of losing nurses but then throwing more resources at nurse recruiting and staffing efforts costs the organization in other ways: Contingent staffing costs increase; continuity of care is disrupted; training costs increase; process improvement and quality programs suffer; the ability to develop nurses into leaders is impeded; staff workloads, accident rates and absenteeism increase (contributing to staff dissatisfaction and greater turnover). Finally nursing turnover leads to medical staff dissatisfaction as communication and care continuity are disrupted.

On-boarding, training, employee retention and assimilation programs are important to retention but these strategies should follow a more deliberate approach to selection. Studies have looked at why employees leave and, invariably, it has to do with job fit and behavioral performance issues – of staff and managers.

Based on research and hundreds of nursing focus groups, our consultants have identified the most common causes of turnover and the role of selection:

  1. Involuntary terminations. Nearly always related to personality traits and interpersonal behaviors - dependability, professionalism, a lack of emotional intelligence, or poor decision making.
  2. 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.
  3. Relationship with Supervisors. Assess each candidate’s leadership potential so that great nurses do not become poor leaders.
  4. 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.

The most successful organizations do a better job of selecting nurses. They take a three-pronged approach:

  1. Define important behavioral competencies.
  2. Become better at interviewing candidates. It’s amazing how far behind healthcare is when it comes to this basic HR skill. Many hospitals don’t even have a structured interviewing program. If they do, they have no idea how consistently it’s used.
  3. Use proven behavioral assessments to examine behavioral 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. The right tool allows the hiring manager to focus their interviewing time on the right candidates.

 Reducing Turnover in Healthcare

Bryan Warren Bryan Warren is the President of J3 Personica, a consulting, assessment, training, and coaching firm, and a guest blogger for PSI. Bryan is an expert in progressive talent strategies, with a particular focus on leader and physician selection and development.