Retention Management in the Era of Healthcare Reform

Retention Management In The Era Of Health Reform

2011 Becker’s ASCChicago, Il.

Retention Management In The Era Of Health Reform

2011 Becker’s ASCChicago, Il.

Retention Management In The Era of Health Reform

Managing Employee retention and managing turnover are inherently difficult processes for

health care leaders.

Managing turnover and retention requires different and distinct skill sets

Retention Management in the Era of Health Reform

The employment culture is changing as well. It is now relatively common to change jobs every few years, rather than grow with one company throughout the employment life as was once commonplace.

How do we stem this trend for employees we want to retain?

In addition, employees are increasingly demanding a balance between work and family life.

Retention Management in the Era of Health Reform

The extremely small, unqualified, and diminishing, labor supply pool in the healthcare sector is exposing an alarming weakness in the industry.

Only those at the for front of this paradigm will thrive.

5 Key Steps To Successfully Retain Talent

Step 1: Identify Your Turnover Rate

Employee turnover in the healthcare sector is extremely high; In some US states it is more than double the national average of 15.6%. This alarming (and rapidly worsening) statistic costs healthcare systems billions of dollars every year and is a direct threat to the future of the healthcare sector.


How do you retain high performers, while turning over those who are not. As equally important: How do we identify both of those individuals? Distinction between regrettable and non-regrettable turnover


Human resource recruiters often considerapplicants they would have otherwise consideredunqualified due to a low applicant flow.

Managers often select candidatesagainst HR’s recommendation because they

felt pressure to get the jobs filled rather thanto find the most qualified or even a qualified

candidate.


Estimated costs vary from organization to organization, some as low as a few hundred dollars to as high as four times the annual salary of the employee. These turnover costs should be measured and constantly monitored over time periods so one can know what should be done and or paid to retain key positions vs. having to recruit and train someone to fill a vacant position at a cost to the institution.


It has been estimated that, on average, it costs a company one-third of a new hire's annual salary to replace an employee. Therefore, at minimum wage, the cost to replace an employee is estimated at $3,700.

This cost increases exponentially as the skill set, responsibility and tenure increase per employee

Step 1: Identify Your Turnover RateFor a company to develop a retention strategy, several steps must be taken.

Assess the current situation / measure the turnover rate Industry, geographic & Job specific benchmarks are readily available for comparisons Establish a base line

Monitoring this data will allow for a problem/trend, either positive or negative, to be identified and controlled or capitalized on before it is too late


Turnover is calculated simply by dividing the number of annual terminations by the average number of employees in the work force. The average employee turnover rate is 14.4 percent annually, according to the Bureau of National Affairs.

Simple Solutions Modifying HR recruiter performance/behaviorEvaluations to include ratings related to:

prescreening, tenure after hirer, evaluation of employees KPIs (Generally a success score given and not just a goal of hire, hire, hire)

Learning more about the jobs A standardized applicant screening sheet A standardized list of “cultural fit” questions

Effects: Positive or Negative are Dramatic

Significantly affect the financial performance of an organization. Direct costs include recruitment, selection, and training of new people. Indirect costs i.e. morale, managers not managing (spending time hiring/firing), filling schedules, productivity, overtime…Added costs can be much higher than can be measured

SolutionsFirst, hire the right people and continue to develop their careers.

Does your company have an ongoing career development program, tuition reimbursement, or skills training program? Do you know what your employees want? Many times pay is very low on their list. Do you do an exit interview when an employee leaves/is terminated?

SolutionsAn investment in upgrading the workforce is one of the best investments a company can make when looking at long-term growth. Hiring the people that are a good "fit" with the culture of the organization — meaning that their values, principles, and goals clearly match those of the company & current work force — Training as necessary will go a long way toward ensuring employee loyalty and retention.

A good skill set doesn’t mean a good fit

SolutionsSecond, most companies with low turnover rates are very employee oriented.

They solicit input and involvement from all employees and maintain a true "open-door" policy that avoids closed-door meetings. Employees are given an opportunity for advancement and are not micro-managed. Intrinsic rewards are critical. Employees must believe they have a voice and are recognized for their contribution Remember that "trust" and "loyalty" are a two-way street. Does your company's culture encourage open communication and employee input?

SolutionsThird, develop an overall strategic compensation package

Includes not only base and variable pay scales Long-term incentive compensation Bonus and gain-sharing plans Benefit plans to address the health and welfare issues of the employees Non-cash rewards and perks as well.

SolutionsTo be competitive in today's labor market, most companies find it necessary to offer a standard benefit package, including health, dental, and life insurance, vacation and leave policies, and investment and retirement plans.

But what more could be done that would be cost effective toward creating an employee-

oriented work environment?

Solutions Employee of the month with rewards Take your spouse to dinner Half day of work Special trips for continuing education

Buy the staff lunch… Non-monetary rewards often go farther than

cash. Money is just money

Step 2: Evaluation and Goal Setting 1ST

Set predetermined KPI’s for performance for each job description

Leave no doubt as to what is expected for baseline performance, what underperformance will get you fired and what over performance will get you a bonus

Step 2: Evaluation and Goal Setting2nd

Have knock-out factors such as harassment, excessive lateness, reckless endangerment

Some infractions will put your institution at risk and those can not and should not be tolerated for anyone

Evaluation and Goal Setting3rd

Have weekly/monthly/qtly meetings to review expectations and progress. If the proper job was done in the hiring process there is no reason an employee shouldn’t be able to meet expectations as long as they are realistic and they have been given the tools to accomplish their goals. Don’t wait until it is too late to correct an issue

Evaluation and Goal Setting4th

Document all meetings and benchmark data Create a standardization Build upon what has been learned


If someone shows a desire to work, want to be with your institution and truly is giving their best efforts make all efforts to keep them, not at all costs but train, educate, and mentor…those employees will value your loyalty


Don’t let terminations be a surprisea. It puts your institution at legal riskb. If it is a surprise management hasn’t done their

jobc. There is no reason for it

Step 3: Let go of UnderperformersOnce an underperformer is identified there is no reason to keep them onThey show others that improper performance is toleratedIt disensentifies your over achieversYou are giving equal pay to those that do there job vs. those that don’t and that is BAD business.

Makes room for hard working employees to move up from the bottom + new candidates to fill the ranks

Step 3: Let Go of Underperformers Retention of underperformers is not good retention management Decreases productivity, increases wasted HR hours on micromanagement; undermines the vision of the organzation

Step 4: Challenging EmployeesCareer trajectoriesFor certain jobs it is good to set out a road map of what a career path looks lake at your institution.

Gives something to work towardsEmpowers employees to take their careers

into their own hands. The choice is theirs on how far they go

Transparency is a good thing for everyone

Step 4: Challenging EmployeesReward

Allows employees to see your institutions appreciation, recognition and willingness to follow through with your commitments to them.Monetary Small giftsAdded time off Extra tuition reimbursementPublic recognition Faster promotionsEvent tickets Trips

Step 5: Effective Leadership At first glance it would appear that the root cause of this problem is an extremely small talent-supply pool .

Hint: Look Deeper!

Step 5: Effective LeadershipLeading to a whirlwind of aggressive headhunting amongst competing healthcare organizations.

Step 5: Effective LeadershipThe real cause of this crippling turnover is poor human capital management in the healthcare sector.Remember: Most of this can be prevented by patience, proper hiring techniques, setting a culture of success, rewarding proper work and removing those that don’t fit in and underperform on a regular basis

Step 5: Effective Leadership A shrinking, aging, talent pool is a crisis waiting to happen if you don’t manage your workforce effectively. In addition, the new labor pool presents an incredible opportunity, if capitalized upon, for your institution to stay way ahead of the pack

Step 5: Effective Leadership The real issue is that most healthcare organizations are the equivalent of a badly leaking bucket; pouring more water into them does not solve the root problem. To think otherwise is pure insanity.

Don’t follow the pack!

Step 5: Effective Leadership

Basing hiring decisions on ill-defined parameters, poor organizational intelligence, and high employee turnover rates is the perfect storm

Step 5: Effective Leadership All healthcare organizations are in a situation where the water supply is low; many of them also have very large holes in their bucket. It is easier to mend the bucket than affect supply

So why aren’t more of them doing so?

Step 5: Effective Leadership It takes a significant investment of time, effort, money, and above all an awareness of the connection between poor human capital management, employee turnover, and lost profits + a willingness to change.

Step 5: Effective LeadershipSenior management must be aware of, not just the holes in the bucket and the rapid decline in water supply, but the astronomical costs that the wasted water is stealing from their own bottom line.

Step 5: Effective Leadership If senior management have not acknowledged and understood this dynamic it will be impossible to execute an effective human capital management reinvention---Management must be held accountable and made aware that this is not a systemic problem but an ingrained problem that can and must be changed

Step 5: Effective Leadership

Management must be held accountable and made aware that this is not a systemic problem but an ingrained problem that can and must be changed

Conclusion “The definition of insanity: doing the same thing over and over again and expecting different results.”

Benjamin Franklin, 1706-1790

Can your institution become an example of employee retention in an era of major health care reform?

Thank YouNicola V. Hawkinson, DNP, RN,

RNFA306 East 15th St.

New York, NY

WWW.SPINE-SEARCH.COM1.516.333.5050

http://www.spine-search.com/

Retention Management in the Era of Healthcare Reform

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