When the pandemic took over the world in 2019, many industries were tremendously affected. However, healthcare found itself battling on two fronts: responding to the unprecedented demand for healthcare caused by the COVID-19 virus and ensuring the industry stood its ground amid the staff shortage.

As per the US Bureau of Labor Statistics, employment in healthcare occupations is expected to grow 13% and create about 2 million jobs by 2030. Among all occupational groups, healthcare practitioners and support occupations are driving demand at a faster rate than any other. Despite the industry's resilience, the pandemic has further exacerbated labor shortages and amplified labor market stress (BLS, 2022).

Turnover in Healthcare Industry

A report by the Work Institute estimated that almost 6 million healthcare workers quit their jobs in 2021, a 25% increase over the previous year. According to Morning Consult, the top reasons for healthcare workers leaving their jobs amid the pandemic were: fear of contracting COVID-19, expectations for better pay and benefits, finding better work opportunities, overwork, and burnout (Galvin, 2021).

Source: Morning Consult

Hospital Turnover

Average hospital turnover from 2017 to 2021. Source (NSI)

According to the NSI National Healthcare Retention & RN Staffing Report for 2022, the average hospital turnover rate in 2021 was 25.9%, an increase of 6.4% over 2020. Hospitals failed to meet their turnover reduction goal, and in recent years, 100.5% of their staff have turned over. Further analysis shows that 95.5% of hospital separations were voluntary (NSI Solutions, 2022).

Average hospital turnover rate by region and bed size. Source: (NSI)

In 2021, turnover increased in all regions between 2.9% and 10.0%. North-East turnover was the highest, closely matching the national average, while South-East hospitals saw a lower increase but still above the national trend. Hospitals in the South Central and Western regions with fewer than 200 beds had the greatest retention capacity, whereas hospitals with 300-500 beds in the North-Central region experienced the highest turnover (NSI Solutions, 2022).

Some of the main reasons for hospital staff turnover include personal reasons, lack of career advancement, retirement, relocation, salary and benefits, education, scheduling, commute, and workload/staffing ratios. For more information, visit our website.

Nursing Homes and Elderly Care

The home health and personal aide industry is predicted to grow 41% between 2016 and 2026, according to the Bureau of Labor Statistics. This is due to the aging baby-boomer population and the growing elderly population. However, the number of nursing care workers has significantly declined since the pandemic began. From 976,100 employees in February 2020 to 892,200 in July 2022, there's been a decrease of 8.6%.

The Journal of the American Geriatrics Society found a growing link between turnover and nursing home quality and star ratings. According to their findings, registered nurses and total nursing staff turnover rates were about 44% and 46% respectively. Nursing homes with higher star ratings had lower turnover rates for both groups (Zheng et al., 2022).

Registered Nurses

During the pandemic, a rise in patient ratios, increased occupancy rates, and high acuity led to burnout, fatigue, and emotional exhaustion among medical personnel, particularly registered nurses (RNs). This resulted in a staggering 27.1% turnover rate for RNs in 2021, an 8% increase from the previous year. In the last five years, hospitals have shed around 95.7% of their registered nurses (Strout et al., 2022).

In 2021, all regions experienced an increase in RN turnover. The North East reported the greatest increase, despite being below the national average. Hospitals with more than 500 beds reported the largest increases and turnover rates (Peng & Rewers, 2021).

Source: McKinsey November 2021 Frontline Workforce Survey

According to a 2021 McKinsey survey, nurses more likely to leave the profession valued manageable workloads, while those who stayed placed importance on meaningful work, having caring teammates, feeling connected to the profession, and being engaged with it. Both groups ranked safety, flexibility, work-life balance, compensation, and feeling valued as equally important factors (McKinsey, 2021).

The Cost of Turnover in Healthcare

Turnover significantly impacts hospital margins. In the United States, the average turnover cost for staff registered nurses ranges from $33,900 to $58,300. In 2021, the average hospital lost $7.1M due to elevated turnover rates. Every percent change in staff turnover can cost or save a hospital around $262,300 (Gamble, 2022).

Turnover costs in healthcare are estimated to be 33% of an employee's income, sometimes reaching 1.5 to 2 times the employee's compensation, including recruiting, onboarding, and training. For example, if a company loses 20% of its 3,000 employees at an average salary of $45,000, and the cost of replacing each employee is $60,000, turnover costs would amount to $27 million (Sanborn, 2017).

Similarly, replacing a physician can cost 2-3 times their annual salary. According to the American Medical Association, the economic loss for Stanford Medicine from physicians leaving due to burnout could range from $15.5 million to $55.5 million over two years, considering recruitment costs between $250,000 and almost $1 million per physician (Berg, 2018).

How Healthcare Can Combat Turnover

Despite the alarming turnover rate, healthcare demand is expected to grow at an exponential rate. As the aftershocks of the pandemic settle in, healthcare is expected to regain momentum and get prepared for the future.

Approximately 75,000 new jobs are expected to be created in hospitals between 2019 and 2029, followed by 43,800 new jobs in nursing homes, and 33,200 new jobs for registered nurses outside the healthcare sector. A total of almost 222,000 new RN jobs are expected to be added in the same period (Stiegler et al., 2021).

Healthcare providers must innovate their retention strategies to stay afloat. Here are some key strategies:

Reduce Employee Burnout

A 2021 study by the Mayo Clinic found that one in five healthcare workers intended to reduce work hours or quit the profession in two years due to burnout, fear of infection, anxiety, or a high workload (Henry, 2022).

  • Hire more staff: Burnout is frequently caused by overwork. Alleviate overwork by hiring permanent and temporary staff and scheduling them appropriately.
  • Educate your workforce: Prevent burnout by informing workers about its signs and symptoms, even when they are still students or newcomers.
  • Cut down tedious work: Reduce administrative tasks for clinicians so they can focus more on providing care.
  • Care for your caregivers: Offer treatment and support to help them deal with burnout.

Offer Greater Flexibility in Scheduling

Proper scheduling and adequate staffing are critical to retention. Staff scheduling can be accomplished through various methods:

  • Offer flexible scheduling: Flexible options, such as different start times, overlapping shifts, and job-sharing, allow healthcare professionals to balance work and family responsibilities.
  • Provide self-scheduling: Allow workers to schedule their shifts for greater job satisfaction.
  • Automate scheduling: Use technology and AI tools to predict demand surges in advance, enabling better workforce scheduling.

Increase Employee Engagement

A highly engaged workforce has a greater chance of participating in decision-making, feeling valued, and believing their involvement is important. According to Forbes, engaged employees are more likely to be motivated and remain committed to their employer (Beheshti, 2019).

  • Listen to your employees: Conduct internal surveys to understand how employees feel and what may be hindering their success.
  • Provide professional development: Prioritize staff development to see a decrease in turnover rates and an improvement in care quality.
  • Reaffirm core values and mission: Emphasize the organization's core values and mission to keep employees connected to the purpose of their work.
  • Offer on-demand pay: According to the Workforce Institute at Kronos, 61% of healthcare workers believe they shouldn't have to wait until payday to get their earnings. Offering on-demand pay reduces financial stress, leading to more productive and engaged employees who are less likely to leave (Gouthro, 2019; PwC, 2022).

By addressing these areas, healthcare providers can better retain their staff, ensuring they are prepared for future challenges and demands.

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