In our previous article, we discussed employee retention rate by industry and looked at which industries have the best and worst employee retention rates. In this article, we take a closer look at the health care industry.
The turnover rate in the health care industry has risen nearly 5% — across all jobs in the industry — over the last decade.
According to the National Healthcare Retention & RN Staffing Report, the average hospital turnover rate in 2019 was 17.8%, a decrease of 1.3% from the previous year. Since 2013, the average hospital turned over 85.2% of its workforce.
However, since 2015, the average hospital turned over 89% of its workforce. Market analysts say that health care’s turnover is second worst, only to hospitality.
And while COVID accounted for a 9.5% decrease in health care employment from February through May 2020 (mostly in ambulatory health care settings) offices, this is far less than the drop in employment in other sectors.
Market analysts say that health care’s turnover is second worst, only to hospitality.
Concurrently, the health care industry is growing. Roughly 40% of hospitals surveyed in the same report, anticipate an increase in their labor force throughout 2018. The blend of high turnover and growth is creating staffing gaps which have an impact on a hospital’s bottom line.
As the labor gaps grow, it’s important to identify the areas within the health care industry that are particularly susceptible to turnover and learn what we can do to slow rates.Raed More in Our Employee Turnover Health Care eBook
Retention Patterns In Health Care
After analyzing the National Healthcare Retention & RN Staffing Report, several patterns of turnover presented themselves.
- Bedside registered nurse averaged a 16.8% turnover, with bedside nurses slighting lower on the scale and nurses working in emergency care, step down and medical/surgical averaging the highest. The current nurse turnover rate is 8.8% to 37%, depending on region and nursing specialty. With a national average of 17.1% for registered nurse (RN) turnover year over year,
- Certified Nursing Assistant (CNA) 27.7%
- Physician Assistant (PA) 14.2%
- Physical Therapist 10.7%
- Medical Technologist 10.5%
- Pharmacist 8.3%
- Radiologic Technologist 10.8%
- Patient Care Tech (PCT) 19.3%
Additionally, AMN health care reports that hospital CEOS experience a turnover rate of about 18%.
A national study of primary care physicians in the early stage of their careers found that more than one-half left at least 1 practice during a 4-year period and 20% left 2 or more employers. Another study of primary care clinicians and staff in office practices reported 53% turnover during a 2-year period.
Additionally, age may play a role in turnover rates, especially for primary care physicians in rural areas.
Research shows that the turnover rate among younger physicians (i.e., those ages 45 and younger) is roughly double the rate of older physicians; 9 percent compared to 17 percent, respectively.
- 23.8% of all new hires left within a year, which accounts for 32.0% of all health care turnover
- 53.3% of employees who left spent less than two years at their facility
- The current turnover rate for acute care hospitals is 18.2%, with government-owned facilities experiencing the highest rates of total turnover (19%).
- South Central U.S. (AR, AZ, CO, LA, NM, OK, TX & UT) have the highest regional turnover (19.1%)
- North Central U.S. (IA, ID, IL, IN, KS, MI, MN, MO & MT) have the lowest regional turnover (16.8%)
- Hospitals with under 200 beds have the lowest turnover rates (16.8%)
- Hospitals with 350-500 beds have the highest turnover rates (19.5%)
Hardest positions to fill in health care
Turnover rates are compounded by positions that stay unfilled for long periods of time. And, while the nursing shortage has received a lot of media attention, it’s not the only role that’s difficult to fill in the health care industry.
Indeed recently compiled a list of health care job postings from their site, and analyzed which had been left unfilled for two months or longer. Indeed used the percentage of unfilled jobs as a proxy for hiring difficulty. As a result, they identified the following jobs, the 15 most difficult to fill in health care:
- Nurse practitioner
- Agency nurse
- Emergency medicine physician
- Vascular surgeon
- Senior medical director
The longer a job goes unfilled, the more it impacts a hospital’s bottom line. Let’s dive into the cost of turnover and staffing gaps.
For physicians’ offices, more than 60 percent of respondents in a recent STAT poll from the Medical Group Management Association (MGMA) said their organizations had the hardest time recruiting and retaining non-clinical staff.
Specifically, the MGMA study shows median turnover rates as the following for non-physician positions:
- Business operations support staff turnover: 9.92%
- Clinical support staff turnover: 15.83%
- Front office support staff turnover: 20%
As you can see, the high turnover is most prevalent with front-office staff. For many physicians’ offices, this can be detrimental to quality care and customer service, as the front-office staff is often recognized as the face of the business.
Reasons for the recruitment issues are commonly attributed to the lack of career advancements in the billing and medical coding fields. Furthermore, the same MGMA poll indicates one-third of facilities reported lower turnover after raising wages for non-clinical staff indicating that financial wellness may play a strong role in retention methods.
The cost of turnover and staffing gaps
There are many factors that go into the true cost of turnover. For example, when a health care professional leaves, the hospital must account for:
- Staffing costs: Overtime payouts, agency nurses, travel nurses
- Continuity of care
- Training costs
- Staff workloads
- Accident rates
- Medical staff dissatisfaction
Not to mention, programs like those dedicated to mentorship and professional development worsen as the staff tenure decreases.
Industry experts estimate the average cost of turnover, across all occupations in the health care industry, is around $60,000, though specific positions will have a varying impact on a hospital’s bottom line.
For example, the average cost of turnover for a bedside RN is estimated at $49,500 but costs can range from $38,000 to $61,100 depending on hospital and location. And some reports estimate that replacing a physician is at least $200,000 but can reach as high as $1 million per exiting doctor.
The data tells us that decreasing turnover rates should be top of mind for all facilities in order to protect their profits and reputation.
Why turnover is a problem in the health care industry
Understanding why turnover is a problem in the health care industry is the first step toward being able to solve it. Common issues that perpetuate turnover numbers may be the following:
- Lack of workplace engagement
- A tight labor market, and stiff competition for talent
- Baby boomers reaching retirement age leaving vacancies
- Job hoppers
Health care leaders believe that the key to solving the turnover problem lies in the ability to improve workplace engagement. Improved engagement can minimize a worker’s consideration of other job opportunities, attract top talent in a competitive landscape, and keep current employees happy.
How to recruit, retain, and engage
The trifecta of recruiting, retaining and engaging employees is a necessity to continue to protect patient care, staff morale and profitability.
Improve retention strategies
Even though the turnover rates in the health care industry are notoriously high, only 21.6% of hospitals have retention strategies in place for retaining older workers. The current emphasis has been placed solely on new hires, as 58.6% of hospitals have implemented new hire retention strategies. Though the tactic is useful, it doesn’t appear to be comprehensive. Finding ways to increase tenure at your facility can help ease staffing gaps, improve patient care and evolve programs that maintain a well-trained arsenal of staff at your facility.
Focus on employee experience
We can all agree that bedside manner is an important component of a nurse’s job. But, have you thought much about how your facility treats your nurses? Across the board, HR departments are starting to realize that an employee experience is a huge part of keeping employees engaged and happy in the workplace.
In fact, employee engagement was one of the core topics of the 2018 HR Tech conference.
To offer an enhanced employee experience, facilities must get to the core of what their staff wants from an employer, whether it be financial wellness, workplace flexibility, or otherwise. Listening to employee’s feedback is a key ingredient for successful recruiting, retention and employee engagement.
Find leverage in a competitive market
In a tight labor market, hospitals must differentiate themselves in order to attract and retain top talent.
One way to do that is through daily pay benefits. DailyPay is a perk that gives your employees control over when and how they receive their pay. DailyPay is designed to help alleviate financial burdens that may affect employees while simultaneously empowering them to smarter financial decisions.
DailyPay is viable and cost-effective benefit for many organizations. Not only are daily pay solutions non-disruptive to your current payroll process, companies who offer on-demand pay:
- Fill open positions 52% faster than organizations who don’t offer an instant payroll benefit
- Experience an average of 41% reduction in attrition