Staff Development

Getting a Handle on Staff Turnover

July 9, 2015 11:37 am

Revenue cycle leaders who keep staff turnover in the single digits ensure that their departments operate at peak performance.

Most revenue cycle departments are tackling multiple challenges, including the approaching ICD-10 conversion date, shifting payment models, and increasing patient financial responsibility. As a result, it has never been more important to make sure financial services staff are happy and effective at their jobs. Without a concerted approach to staff retention, organizations can lose key resources right when they need them most. There are many advantages to limiting staff turnover.

Retain expertise. Keeping experienced staff in the organization allows for more efficient processes, which can translate into better cash flow and higher revenue. “There is also a strategic advantage,” says David Catoe, FHFMA, assistant vice president of patient financial services for Carolinas HealthCare System’s Hospital Business Office. “By holding on to your brain trust, you can more easily work through problems and plan for improvements.”

Avoid new hire costs. “Hiring a front line staff person can cost up to 50 percent of that position’s annual salary to pay for advertising, recruiting, interviewing, testing, and so on,” says Catoe. “The cost can be 150 percent of the position’s salary for a mid-level manager. If you have 20- to 30-percent turnover, those new hire costs can add up to real money and start impacting your bottom line.”

Preserve morale. If an organization has high staff leakage, there must be a reason—for example, a stressful environment, low wages, or poor leadership. All of these factors can cause morale to suffer, which can exacerbate staff retention issues. Low morale can also negatively affect productivity, which can have significant financial ramifications.

Avoid negative customer service impacts. “If staff are unhappy, it can rub off on patients,” says Catoe. “Similarly, if you are always replacing staff, it can lessen the level of expertise in the department, which can also influence customer experiences.”

A Multifaceted Approach Yields Results

While being intentional about staff preservation takes work, the potential outcomes are worth the efforts. “Several years ago, I took a job as the revenue cycle leader for a department with more than 50 percent annual turnover. There was a pervasive toxic attitude in the department that I noticed during the interview for the position. I took the role with the goal of turning the department around,” says Catoe.

“My first step was to assess the group’s leadership. There was an individual who had great content knowledge and who was a superb analyst, but her leadership skills were lacking, causing morale issues across the department. I created a new position to better leverage her skills and transition her away from management,” says Catoe.

“Next, I addressed poor performance across the remaining staff and even took disciplinary action in a few cases. We onboarded technology to help drive staff performance, and I instituted a rewards program for both individuals and the department. Based on these and other actions, the department was able to reduce turnover by 10 to 15 percent each year, ultimately dropping from 50 percent to around 5 percent over four years.”

What is Considered “Good” Turnover

Although it is important to keep turnover low, how organizations establish the right targets will vary depending on their revenue cycle departments’ size and scope. “If you have 50 staff people—which would be a mid-size department—then you might expect to lose three to four people a year due to retirement, health issues, or another job,” says Catoe. “However, a smaller shop might not experience any departures for a few years. I try to hold turnover between 5 and 8 percent given our size, but I am careful to assess why people are leaving. If it’s natural attrition that’s fine. However, if people are going because they are unhappy or unchallenged, that’s another thing.”

In some situations, a degree of turnover is good. New people bring in fresh perspectives and different ideas, which can benefit revenue cycle departments. New employees can also reignite existing staff enthusiasm, bringing renewed vigor across the board. As such, organizations should make sure they balance the need to retain staff with the advantages of bringing in new blood.

While turnover will fluctuate, there are certain benchmarks that indicate potential problems. If revenue cycle department staff leakage starts heading into the double digits, leaders should conduct a close review, including assessing root causes and putting action plans in place to improve morale, Catoe says.

Key Employee Retention Strategies

There are many ways to avoid staff turnover and keep employees productive and content. The following are a few strategies to consider.

Engage in servant leadership. Department leaders set the tone for work environments, demonstrating through their actions whether organizations care about their employees, value their opinions, and appreciate their efforts. “In my mind, department leaders must embrace servant leadership,” says Catoe. “Servant leaders accept responsibility for their actions, actively seek and respond to staff feedback, are firm but fair, and are accessible to all department employees. To achieve this kind of leadership, you can’t just give lip service to issues and next steps. You have to say what you mean and mean what you say. The ultimate goal should be a respectful workplace that is built on mutual partnership and respect.”

Assess staff. Before starting on any staff retention initiatives, gain a complete understanding of your current staff’s strengths and weaknesses. “This allows you to leverage strengths and see if you can address the weaknesses through training, education, mentoring, or even job restructuring,” says Catoe. “Rounding with employees is a good way to get to know them and understand what they know about their jobs, including what their goals are. Leadership should try to round with staff every day or so to catch any new developments or emerging perceptions.”

Provide staff with the tools to get their jobs done. Although leadership is critical to staff morale, organizations must also ensure they give staff the right tools to do their jobs effectively. Depending on the organization, this may include innovative solutions to improve productivity, efficiency, and accuracy and/or up-to-date hardware to support any new software products.

Recognize employees for their contributions. “There is a saying about good management that you should ‘recognize publically and criticize privately,’” says Catoe. “I think that definitely holds true when trying to elevate revenue cycle staff morale and retention.” It is important to praise staff often both individually and as a department. This can take the form of awards, lunches, gift cards, or even more casual acknowledgements of a job well done.

Have a good relationship with HR. Despite leaders’ best efforts, sometimes employees are not good fits for certain organizations. In these cases, leaders should work closely with human resources to move individuals to new roles or in some cases, out of the organization. “This can be challenging and some leaders shy away from making staff changes,” says Catoe. “However, if you avoid facing the problem, you can actually cause more harm in the long run.”

Allow for telecommuters. “At my current workplace, I have more than 50 percent of my denials and commercial managed care staff as telecommuters,” says Catoe. “Staff love the ability to work from home, and we value the productivity—high producers—and retention—very low turnover.  We still have people come in for meetings monthly, but their day-to-day commute is ‘0’ miles.”

Access Related Tool: High Morale/Low Turnover Planning Checklist

A Continuous Effort

While organizations shouldn’t expect to improve morale overnight, employing a concerted strategy rooted in strong leadership can safeguard department continuity, helping organizations to navigate rapid healthcare changes and keeping the revenue cycle performing well.

Kathleen B. Vega is a freelance healthcare writer and editor who contribute regularly to HFMA Forums.

Interviewed for this article: David W. Catoe, FHFMA, is assistant vice president of patient financial services at Carolinas HealthCare System’s Hospital Business Office in Charlotte, N.C., and is a member of HFMA’s North Carolina Chapter.

Discussion Starters

Forum members: What do you think? Please share your thoughts in the comments section below.

  • What are some strategies you use for improving morale and limiting turnover?
  • What is your ideal staff turnover rate?


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