Cost Implications, Hiring Demands and Challenges
In part 1 of a 3 part series, we established the fact there is a significant supply and demand crisis within the healthcare industry. In this article, part 2 of the series, we are going to take a look at the some of the costs, specific hiring demands and challenges which have become a reality within the industry.
Do you know what it costs to hire a healthcare worker today? According to “Diagnosing Today’s Healthcare Staffing Challenge” by Jackie Larson:
- The cost of replacing a nurse ranges from 1.1 to 1.6 times annual base salary
- This includes the cost of recruitment, lost productivity & increased overtime pay, lost revenue (if billable), and training expense
As another point of reference, the Robert Wood Foundation reported the cost of replacing an RN ranged from $22,000 to $64,000.
Regardless of which end of the spectrum an individual healthcare organization resides, the fact still remains; It is not inexpensive to replace a nurse and the fact of the matter is many healthcare employers underestimate this expense. And, it goes well beyond the cost of the recruitment team.
The most difficult-to-fill healthcare positions reported by “Top Healthcare Recruiting Trends for 2015” by Bryan Barajas were:
- Physicians (45,000 shortage for the next decade)
- Surgeons (46,000 shortage for next decade)
- Registered Nurses
- Physician Assistants
- Nurse Practioners
A recent healthcare employer survey of 565 healthcare providers conducted by Job Market Maker, “5 Things to Know about the Healthcare Hiring Boom” reported:
- 58% of the employers expect to grow in 2015
- 55% of the surveyed healthcare employers stated finding talent was their #1 challenge
- 51% say retaining talent is their #2 challenge
- The majority of employers felt a more efficient hiring process was a competitive advantage
- 44% of the surveyed organizations plan to make investments in talent acquisition this year
Numbers can be overwhelming and result in paralysis by analysis. Based on the rankings, employers on the surface seem to think their biggest challenge is a candidate sourcing problem. Is it? Should healthcare employers just give up and assume there is no meaningful way to address the impending crisis? In part 3 of the series we will take a look at what some of the most progressive healthcare organizations are doing to address the challenge.