Hospital Staff Retention Strategies in the Managed Care Era

This new generation of workers is highly skilled and ambitious, and brings a different perspective to work than the previous generation. While GenX professionals gain greater experience in the workforce, career opportunities in healthcare are growing. As a result, hospitals are feeling the strain of having to compete for and struggle to retain human resource talent. Although attracting new talent is an important function of the hospital human resource program, retaining existing staff should receive at least equal priority. Implementing employment policies that focus on maintaining your current workforce can bring greater staff retention, organizational stability, and cost savings. The Challenge Hospital managers are increasingly charged with the responsibility of retaining valuable staff. Retention specialist Karlene Kerfoot illustrates the critical link between organizational success and its human resource program: The ability to recruit and retain is one of the most important facets of a leader’s responsibility. Without the proper human capital, the best strategic and tactical plans are doomed to failure.² Employees must not be viewed as liabilities, but as assets necessitating attention. ³ Retaining hospital staff goes beyond providing the necessary human resources to operate a consistently competent acute care environment. The collateral cost of staff turnover is often overlooked. Although some degree of turnover is favorable and healthy for any organization¹, excess turnover is associated with a surprisingly substantial cost in dollars. The loss of a single critical care nurse translates to a cost in dollars equal to 156 percent of his or her annual salary. ¹ Maintaining the highest standard of patient care while simultaneously reducing the cost of unplanned staff departures means taking a fresh look at the overall hospital employment program with an emphasis on retention. Before retention strategies can be discussed, it is important to understand why professionals such as pharmacists, registered nurses, and imaging technologists are departing hospitals, creating astoundingly high vacancy rates (see Table 1). Both simple and less apparent reasons lie behind the dwindling healthcare labor pool. First, the overall population decline after 1964 is affecting today’s labor resources. Approximately 44 million Gen Xers born between 1960 and 1980 are filling the labor void left by the much larger baby boomer generation. ¹ As boomers continue to age with greater life expectancy, hospitals are struggling to care for them with a much smaller labor pool. The fiscal constraints of managed care only exacerbate an already difficult labor situation. Hospitals and other health organizations often encounter difficulty competing with the wages offered in other professions. As a result, enrollment in healthcare training programs has experienced a downturn, and a trend has emerged for existing clinical staff to seek out other opportunities. They may choose to leave the clinical setting altogether or to leave their employer for another hospital. An organization’s competitors are also potential poachers of its best employees. ⁶ The reality is that competitors vie for not only each other’s customers but also their employees. Clearly, there is little ethic in healthcare that prohibits this tactic, as Grace Rudolph points out: Upright citizens, who would return a lost wallet containing hundreds of dollars in a heartbeat, think nothing of stealing employees from one another. ⁷ Why Do They Leave? Although the prospect of greater compensation is frequently cited as a reason for changing jobs, reviewing Nancy Aldrich’s studies of exit interview responses will soon dispel this myth. ¹ Exit interview responses included the following reasons as to why employees chose to leave: No linkage between performance and compensation. A lack of opportunity for career advancement; Work viewed by the employee as unimportant or unappreciated. Along with feeling unappreciated, respondents talked about feeling no support and/or having insufficient resources to do their jobs. ¹ Unclear organizational goals and expectations. Perhaps nowhere is this phenomenon of job dissatisfaction more apparent than in the field of professional nursing. A recent survey of nurses in the US revealed an astonishing 41 percent job dissatisfaction rate. ⁸ A closer look at this study reveals commentary that echoes the previously stated exit interview findings. Nurses frequently express dissatisfaction with unresponsive management, little input in policy-making, and a lack of acknowledgement for their patient care efforts. ⁸ One significant complaint voiced by many nurses is that their work has become more clerical as a result of the amount of documentation they are required to complete. ² Additionally, many nurses have cited the overwhelming duty of having to simultaneously care for a greater number of acutely ill patients. Changing Values Building staff loyalty requires adapting to shifting value structures. ³ Employers who do not attempt to implement employment policies sensitive to changing attitudes risk losing staff to other employers who recognize that Gen Xers approach their work in a different way. Since members of the contemporary work force have witnessed their parents’ experiences with layoffs, downsizing, and career disappointments, Gen Xers, not surprisingly, have adopted their own revolutionary work ethic. ⁹ In contrast to their parents’ self-sacrifice for the good of the organization, Gen Xers, according to labor experts, exhibit a greater sense of independence and self-reliance in their work. The expectation of multiple careers, balanced work and home life, and a desire to be coached instead of managed characterizes a typical Gen X individual. ¹ Access to flexible scheduling as a tool to help balance home and work life has also emerged as a priority with the contemporary labor force. For example, many hospitals now offer ten and twelve-hour work days to condense the work week. Understanding what people truly value in their jobs can pay dividends in the short and long run. ³ Yet the best approach to staff retention will take into account both shifts in the values of the contemporary workforce and basic human needs using the familiar guideline of Abraham Maslow’s hierarchy of needs (Figure 1). Employers interested in engaging their staff might begin by recognizing that after survival (compensation) and safety needs, people naturally need to belong, have self-esteem needs met and, if possible, self-actualize. Financial Compensation: Survival Clearly, by offering competitive, robust, and innovative compensation programs, hospitals can compete in the tight employment market. Yet it is futile to hope that by tinkering with compensation programs that a company can insulate itself from today’s freewheeling labor market.6 One problem with compensation is that it is easily matched by competitors. ⁶ Although meaningful and effective compensation packages are still relevant in a staff retention strategy, hospitals interested in retaining staff might wish to alter certain compensation components, such as sign-on bonuses. For example, instead of paying a big golden hello, hospitals may wish to spread bonuses over a period of time.6 In order to receive the golden handcuffs bonus, the employee would have to remain with the organization over a predetermined period of time, such as one or two years. Although the golden handcuffs may merely delay a staff member’s departure, it is a demand in the current market. ⁶ Another approach involves the hospital paying the highest wages in its community and promoting itself as doing so. After publicizing itself as the hospital with the highest standards tied to the highest market salaries, one facility found that staff turnover actually decreased. A sense of pride was associated with belonging to this particular organization because it expected nothing less than excellence from its publicly touted top-notch, well-screened, and well-compensated staff. ¹⁰ Clearly, retaining the best staff goes beyond simply ensuring that employees can financially survive. Connecting the Employee and the Organization: Belonging When people feel connected to a particular organization or group, they are reluctant to leave it behind. Hospital employment retention programs can encourage a sense of connectedness to the organization. One previous example demonstrated how one hospital created a sense of membership by promoting and paying for performance excellence. Other methods and ideas can be implemented to foster an atmosphere of membership. First, keep employees in the loop. Withholding organizational knowledge from employees is divisive and unproductive. In order to accomplish an enhanced level of communication, employment specialists Harris and Brannick suggest making open and honest communication a key organizational value. ⁹ The payoff is that shared information builds trust. ¹ How is this put into practice? To start, publish meeting minutes as soon as possible. Hospital intranets, chat rooms, and electronic bulletin boards can prove to be an invaluable means of communication. Hold open meetings, when possible. Share the organization’s financial information as a way to actively engage employees and allow them to feel a sense of ownership. ¹ Another inexpensive strategy conducive to keeping people is building and maintaining a strong team spirit. ³ Facilitating team-oriented work goals promotes stronger interpersonal bonds. Often these work bonds will spill over into personal bonds, further enhancing a sense of community at work. ³ Strategies that create an organizational sense of membership are simultaneously associated with little or negligible cost. Thus, these strategies can be implemented at even the most budget-strapped hospitals. Individual Feedback: Self-Esteem Creating a policy of helping people feel good about their work is the next step in redesigning a retention strategy. Designing and facilitating a hospital atmosphere where managers understand how to deliver a meaningful, personal, and positive message to each employee’s efforts is crucial in the staff retention strategy. Again, the cost of such an effort is insignificant. Performance reviews must be regular and timely in order to be an effective part of the staff retention strategy. ¹ Your best employees will applaud the availability of real-time feedback systems and are often self-motivated to improve their work without supervisor input. ⁹ One nursing manager who was constantly on the watch for staff excellence puts recognition into real-time practice. Whenever this manager witnessed an example of an individual staff member’s exemplary effort, the manager would promptly recognize the effort with praise that was instant, sincere, and in front of peers. ⁷ Another health organization implemented the S.K.I.P. (Safety, Kindness, Image, and Productivity) program. Employees are nominated by other employees after performing a service above and beyond the normal level of performance. At periodic intervals, award ceremonies are held which mimic the Academy Awards. Nominees are recognized, and a single winner in announced in each category. ¹¹ Emory Healthcare in Atlanta recently implemented a similar recognition program, called You Mean the World to Us. Any hospital employee can fill out an I just noticed you doing something special card whenever a good deed is witnessed. Nominees are eligible for a quarterly drawing for gift certificates and a pin. ¹² Encouraging Staff: Self-Actualization Helping employees to achieve their best in their career can encourage loyalty. ¹ Perhaps the most complex psychological need according to Maslow, self-actualization can be put into practice in a variety of ways. Hospital employment programs can choose to integrate in-house training, offer tuition reimbursement, provide a staff library, promote mentoring, and ensure continuous on-the-job training. Job training increases an employee’s comfort level and leads to a decreased likelihood of departure. ¹ In-house training should target core job skills. Hospital orientation classes are an essential activity for new hires. Structured, formal mentor relationships are another excellent tool and resource for in-house training. Technical training and updates on current and new equipment provide the staff member with the essential knowledge, skills, and confidence to perform at the highest level of competency. In-house training and development should be ongoing and involve a wide variety of curricula and methods tailored to the individual staff member’s needs. ¹ Tuition reimbursement has traditionally been a controversial concept for many employers. Certainly, cost is a major factor when deciding how to help staff achieve. The opinion that financial assistance for education results in employees’ eventual departure has been proven false in the majority of cases. As noted previously, investing in an individual employee tends to strengthen loyalty and retention. Although the cost of a tuition reimbursement program may seem high, many employees do not take advantage of the benefit. Instead, just knowing that it is available can be an enticement. ¹ Although formal training is the best way that hospitals can assist their employees’ achievements, other options should be considered. Providing a comprehensive, staffed, and accessible hospital library helps keep individual employees current on issues important to their jobs and careers. ¹ Another avenue for assisting is encouraging specialty certification in various technical areas and so-called body of knowledge certifications. Hospital-backed staff achievement, validated by an outside certification authority, illustrates the organization’s commitment to recognizing the learning accomplishments of its best staff. Meeting Non-Tangible Needs is Key Psychology long ago recognized that humans have a hierarchy of needs. Due to today’s economy, job market, and social changes, it’s become easier for more people to seek higher levels of compensation, and non-tangible benefits can receive a great deal of consideration. Hospital human resource programs must tailor employment strategies to meet these needs. Staff retention initiatives, aimed at keeping your most talented staff, can be surprisingly cost effective.