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Hospital Turnover 30% Worse than other Industries – and Worsening

December 17, 2015


U.S. Bureau of Labor Statistics reports show that healthcare continues to add jobs, month after month. That’s the good news. Sadly, the bad news is hospitals are having a hard time keeping the people they hire! Voluntary turnover, particularly in the first year, is a good indicator of an organization’s effectiveness in hiring and assimilating staff.

In this context, hospitals are seeing that the quality of their hiring approach is worsening. According to a recent report from PricewaterhouseCoopers (PwC) Saratoga, first year turnover in the hospital sector, at 28.3%, is significantly higher than the rest of U.S. industries at 21.5%. More worrisome, the report says that first year turnover is increasing, with 22.2% of first year nurses leaving after their first year at a hospital. To learn more, see the PricewaterhouseCoopers Saratoga 2012/2013 U.S. Human Capital Effectiveness Report.101796561

The report also points out the impact of turnover on an organization’s bottom line. It estimates the cost of turnover as 1.5 times the base salary of an exempt employee and .5 times the base salary of a non-exempt employee. Do the math and think about what it would mean to reduce turnover by 25 or 50%.

Consider these facts in light of our recent blog entry about Quint Studer’s assertion that 8% of hospital staff underperform. In summary: We don’t do a very good job selecting candidates who will stay. We probably don’t do all we need to do to assimilate those we do hire and give them a reason to stay. At a time when both clinical and financial performance is paramount, many of those who stick around aren’t very good!

Human resources in hospitals can continue to provide “transactional” services where they handle posting requisitions, sending candidates to hiring managers, and paying and exiting staff. Or, HR can be the experts in talent acquisition and retention. Which role do you think will have a more transformational impact on the organization?

On-boarding, training, employee retention and assimilation programs are important to retention but these strategies need to be augmented by a deliberate approach to selection. The PwC report gets into “why” employees leave and, invariably, it has to do with job fit and behavioral performance issues of both staff and managers. The place to begin to correct this problem is in the healthcare hiring process, by using valid behavioral assessments and a structured interview program you will increase your odds of finding the right people. See our previous blog entry about turnover results.

 Four Hospitals Save $1.3 Million by Cutting Service Worker Turnover in Half

Bryan Warren Bryan Warren was the former Director of Healthcare Solutions at PSI. He was responsible for developing and promoting tools and services designed specifically for the unique challenges faced by healthcare organizations.