January 12, 2005
Six years into the national healthcare labor shortage, hospital leaders are getting savvier about recruitment and retention. However, deeper changes need to occur if hospitals are going to survive the massive labor shortage that is expected in the next decade: By 2020, the demand is expected to grow 40 percent, but supply is only projected to increase 6 percent.
Some knee-jerk solutions to the immediate need for nurses have been expensive and have sometimes had unintended consequences. For example, the use of agency nurses often costs at least 20 percent more than using staff nurses. Also pricey is the use of foreign nurses, which may also spread the nursing shortage around the globe. Sign-on bonuses have been popular, but tend to make current employees unhappy and encourage nurses to jump from hospital to hospital, wreaking havoc on retention rates.
So what approaches can work in the short-term without causing substantial harm elsewhere? The following strategies, from a new HFMA educational supplement sponsored by Lawson Software, Inc., seem to pay off within a few years with fewer detrimental long-term effects.
Creative Scheduling Options
Many hospitals have lured nurses back to the workforce with flexible scheduling options. Examples include:
* Weekend shifts. "We use a core group of nurses that staff during the week and a core staff of nurses on the weekend," says Jama Johnson, chief financial officer at Saint Luke's Hospital of Kansas City. "The program has proven to be a satisfier among nurses. We try to segment shifts so people can rearrange their personal lives to meet their work schedule."
The Cleveland Clinic Foundation advertises two weekend programs on its web site. Part-timers can work two 12-hour shifts on the weekend and receive pay for 32 hours, plus health benefits and tuition reimbursement, says chief nursing officer Claire Young. Full-time weekend workers receive pay for 44 hours by working two 12-hour weekend shifts and one 12-hour shift during the week.
* Parent shifts. The Cleveland Clinic Foundation also offers flexible schedules for RNs who have trouble committing to 8- or 12-hour shifts because of child care or other commitments. Nurses can choose shorter shifts of two to six hours. "Parents might work around their child's school day from 9 a.m. to 2 p.m.," says Young. "We've recruited 29 new nurses since January to work the parent shifts."
* Internal PRN pools. PRN is short for the Latin term "pro re nata," or "as the situation demands." Rather than relying on agency nurses, hospitals are creating their own pools of temporary nurses. "PRN are part-time staff who want to work here for spot shifts," says Johnson. "They go into our internal float pool, and we tap into that float pool for shortages before we go to an agency." PRN wages are considerably lower than the cost of agency nurses. Cleveland Clinic pays PRN nurses $27-$32 an hour depending on the shift, says Young. Another advantage: Hospitals can require PRN nurses to go through hospital-specific orientation and competency reviews.
Let Nurses Choose Their Overtime
Concerns about patient safety are quickly wiping out the use of mandatory overtime to address nursing shortages. But hospitals are finding that giving nurses a choice of overtime can work in their favor. A growing trend is the use of bid shifting. In bid shifting, nurse managers post vacant shifts online and staff nurses bid for the open shifts at hourly rates that are typically lower than agency nurse rates. One nurse might say she'll work the shift for $27 an hour; another might bid $29. But the shift doesn't always go to the best bid. For patient safety reasons, nurse managers often have the final say over which nurse gets the shift.
Offer Referral Bonuses to Employees
Instead of rewarding new employees with sign-on bonuses, hospitals are giving current employees bonuses for referring needed workers. Saint Luke's uses referral bonuses as a recruiting tool for key hard-to-fill positions. Bonuses are awarded to both individual employees and entire departments or units. "Our No. 1 source of new hires is employees who already work here," says Johnson. "Our employees refer almost half of all the staff that we are able to hire."
SOURCE:
Management Solutions for Combating Workforce Shortages, an HFMA educational supplement sponsored by Lawson Software, Inc. and published in the January 2005 issue of hfm.
Additional Resources
- Understanding the New Labor & Overtime Rules, November 18, 2004, HFMA audio webcast recording.
- Aligning Patient Care and Labor Costs Creates a Positive ROI, 2004 Annual National Institute session recording.
- HFMA 2003 Compensation Survey (Available to HFMA members only. Not a member? Join today!).
- Internet Guide to Compensation Surveys.
- Investing in Your Workforce: Overcoming the Financial Impact of Labor Shortages.
- Time Is Money -- Labor Analysis Toolkit
If you have questions or comments about HFMA Wants You to Know, contact editor Laura Noble.
HFMA Wants You to Know ISSN: 1540-0697. Volume IV, Issue 1. Copyright 2005, Healthcare Financial Management Association. All rights reserved.