Poor Employee Retention is Costing You Money. Here’s How to Fix It.

November 8, 2021 11:48 AM

Poor Employee Retention is Costing You Money. Here’s How to Fix It.

Like many aspects of our daily lives, the coronavirus pandemic has upended the hiring market. As the virus began spreading in April 2020, the economy shed more than 20 million jobs. Since then, businesses have struggled to rehire those lost workers. While this ongoing labor shortage has been troublesome for employers, workers have come out on top. Dissatisfied employees can leave their jobs and easily find higher-paying positions as fierce hiring competition has driven wages up 4.6% year-over-year

This situation is even more dire in healthcare. After nearly two years of battling COVID-19, healthcare workers are leaving their jobs in droves. According to the website dailypay, the year-over-year turnover rate for registered nurses is more than 17%. Turnover among certified nursing assistants is even higher at 27.7%. But COVID-19 is only part of the story. The average hospital has turned over 85% of its workforce since 2015. What's more, a recent study of primary care clinicians and staff in office practices reported 53% turnover during a two-year period. Clearly, something is wrong with healthcare worker retention.

The High Cost of Turnover

These departing workers are extremely expensive for healthcare institutions. By some estimates, the cost of losing a nurse could be as much as $50,000, and the cost of a lost physician could reach $1 million. The healthcare industry is predicted to grow by 16% over the next ten years to make matters worse. That means a shrinking number of employees will be available to fill a growing number of jobs, creating a concerning staffing gap.

Between high industry turnover and the pressing labor shortage, healthcare organizations must be laser-focused on improving their worker retention strategies. Without clear plans to right the staffing ship, hospitals and primary care practices will be sacrificing revenue. 

Five Strategies for Improving Healthcare Retention

The traditional churn and burn approach to staffing is simply no longer tenable in light of the growing cost of employee turnover. As a result, healthcare leaders should turn their attention to developing strategies that support their most valuable employees. Here are a few places to begin.

Foster Employee Engagement

Employees who are disconnected from their jobs are at the highest risk of jumping ship. This disconnection can come from any number of places. However, it's often fueled by burnout, feeling underappreciated, or working for managers who are out of touch with what's happening on the front lines.    

Healthcare organizations can improve employee engagement by making transparent and good-faith efforts to listen to their employees through surveys, meetings, or informal check-ins. Most importantly, management must follow up on what they discover through these efforts. If they don't, engagement will grow even worse. 

Beyond listening, healthcare organizations should communicate with their employees in clear, meaningful, and timely ways — especially when the news may be bad. Management should also go out of its way to recognize and reward excellence wherever it's found within the organization. 

Encourage Teamwork and Collaboration

Nothing alienates employees faster than feeling like they’re working on an island. Communication problems, interdepartmental turf wars, out-of-date technology, and workflow issues all serve to increase employee frustration levels exponentially. To combat these challenges, healthcare organizations need to make it as easy as possible for their employees to work together efficiently and collaborate whenever possible.

These efforts will look different for every organization. Sometimes a technology investment can work wonders for improving collaboration. Other times, management needs to intentionally break down walls between departments in places where it hinders productivity. In all instances, management must have a clear understanding of how their workers cooperate and collaborate before making efforts to improve it.

Offer Competitive Compensation

While pay and benefits won’t always fix turnover problems, they can certainly amplify them. If workers believe they’re being underpaid for their labor, especially based on the competitive market, they’ll quickly grow disillusioned and disengaged. In previous hiring markets, employees would have to upskill to boost their pay. But these days, an underpaid employee can quickly earn more money by simply changing jobs. If you’re not paying market value for your open positions, or better, you’ll be fighting a losing battle.

Focus on Work/Life Balance

When employees feel like they can never escape work, they'll burn out, disengage, and inevitably leave. Healthcare organizations can address this by focusing on improving work/life balance issues. These efforts could begin by addressing scheduling issues so that employees always have plenty of consecutive days off to recharge their batteries. In other instances, requiring your employees to use their available vacation time can work wonders in this area.

This is another topic that requires healthcare leaders to listen to and address their employees' concerns. Otherwise, any actions you take will be ineffective and could actually drive your employees further away.

Invest in Your Employee’s Futures

Finally, employees are more likely to stay with an organization if they see a future for themselves and feel that management wants to help them grow in their careers. After all, nobody wants to work in a dead-end job. That's why employers who invest in their workers through on-the-job training, education bonuses, mentorship opportunities, and career coaching see tangible engagement improvements. When employees consistently receive new opportunities to learn and advance, they're much more likely to invest in their work and the organization's success.

Don’t Wait Any Longer

Treating employees as though they're interchangeable cogs in a giant machine is a road to ruin. Even the largest employers must recognize that their employees are individuals with needs beyond a regular paycheck. The better employers are at identifying these needs and meeting them as well as possible, the more employees will be willing to buy into the organization's vision. However, it takes consistency and a genuine commitment from healthcare leaders to turn employee retention into an actionable strategy. Until then, the healthcare industry will continue losing good employees for all the wrong reasons. 

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