How Much Does Employee Turnover Really Cost You?

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Healthcare organizations have long been at the top of employee turnover lists. It’s a huge, costly problem. Dailypay says, “Since 2013, the average hospital turned over 85.2% of its workforce.” Becker’s Hospital Review points out that healthcare has the second-worst turnover rate of all industries except for hospitality. This creates a huge financial drain on healthcare providers as they constantly source and train new workers.

There is considerable debate in the healthcare field about how much this excessive turnover rate costs healthcare providers. In this article, we’ll review some of the costs associated with this problem and how healthcare providers can finally begin to get it right.

What is the High Cost of Healthcare Turnover?

High turnover can have a significantly negative impact on healthcare providers, the staff at the facility, and the patients. Some of the direct costs of high healthcare turnover, whether the position is operational or clerical include:

  • Candidate sourcing and recruiting
  • Staff orientation and training
  • Everything associated with worker termination

There are also indirect costs of healthcare staff turnover. They include:

  • Diminished productivity
  • Lowered staff morale
  • Increased work for the teams that lose staff
  • Reduced work/life balance

However, this doesn’t take into account the impact on patient quality of care and the reputation of a hospital or community healthcare provider continually in churn. A shortage of nursing staff can affect patient healthcare outcomes not only because there may not be enough staff to respond quickly. One study found patients who were cared for by a nursing staff who were happy in their jobs had higher levels of satisfaction with the care they received. High turnover results in low morale as the left-behind workforce struggles to stretch workloads while replacements are found. This, in turn, could affect the facilities ability to attract talent into an organization perceived as having a revolving door.

Too, there are lost opportunity costs associated with having empty seats on your bus. These may be embedded costs but they have a large impact. If you lack the volume of people necessary to answer the phone, you’ll miss revenue opportunities to schedule appointments. If you can’t schedule appointments, you’ll lose bottom line income. It may take longer to share test results with patients and that could have serious impact on the quality of care.

Quantifying the true cost of healthcare turnover varies, but one study suggested it can run as high as 150% of the annual salary of mid-level employees. Assuming that mid-level salary is $50,000 annually, then the average cost of having even one employee leave is $75,000. If the healthcare provider has 300 employees with just a 10% turnover rate, the annual fiscal cost of turnover is estimated to be more than $2 million.

FQHCs typically experience higher turnover than some healthcare institutions. While 2020 may go down as our most challenging in healthcare in recent memory, the pandemic only heightened the burnout and turnover many of our institutions are experiencing. What can community healthcare providers do to alleviate the problem?

Working closely with an experienced staffing team like UHC Solutions can help your organization improve employee turnover by ensuring that every hire is the right fit. Find out how our team can help your organization improve employee morale and patient satisfaction by providing top talent when and where you need it the most.

 

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