As the healthcare system in the U.S. struggles with a shortage of nurses and clinical support occupations, administrators are burdened with the impact this has on patient safety, public health, and the financial costs of employee turnover. The cost of turnover, particularly in the field of nursing, is growing and the number of nurses currently entering the field is outpaced by those who are leaving. In addition to the impact that an insufficient supply of nurses can have on the safety, quality and experience of care, the direct and indirect financial costs associated with nurse turnover can drastically influence the operating margins of healthcare providers.
That’s why nurse managers, CNOs and HR Directors are turning more of their attention to innovative retention plans and resources. Many administrative practices have been identified as useful tools for retaining nurses and growing the value of their experience. These practices include improved hiring processes, continuing education, encouraging professional development, company culture, and supportive, collaborative management styles.
How We Arrived Here
Even before the pandemic and Great Resignation took its toll, a steady exodus of RNs had already been in place for at least a decade. The annual number of nurses leaving the workforce has almost doubled from 40,000 in 2010 to nearly 80,000 in 2020.[1]
Hope For Recovery
In the presence of an aging population and industry growth, it may be difficult to see an end to this shortage in the foreseeable future. The US Bureau of Labor Statistics reports that the healthcare industry is projected to grow 16% and add about 2.6 million new jobs through 2030. This industry growth is happening in tandem with the growing rate of vacancies.
There is hope for a rebounding workforce, but it will take time, patience and innovative investment in education, recruitment and retention. While leadership cannot be expected to alleviate all of the stresses and pain points of a nurse’s day-to-day workload, hope comes in the form of empowerment from the top down, providing tools and career pathways that nurses can utilize to grow and advance in their career. With clear pathways for advancement, nurses gain trust in their employer as the driving force behind the goals they aspire to reach, while employers reap the benefits of retaining nurses determined to rise within the ranks of their organization.
Financial Costs of High Turnover
The average cost of turnover for one bedside nurse is estimated to range from $38,000 to $61,100. Per hospital, that adds up to a loss of between $4.4 million and $7 million annually. Based on these estimates, each 1% change in nurse turnover is worth $337,500 in either direction. These trends and costs are further complicating financial performance that is already burdened by increasingly complex payment models and a rapidly changing regulatory environment.[2]
The average length of time to fill a vacant nursing position is 85 days, and it can extend beyond three months for more specialized roles.[3] Not only is that a loss of a critical member of your team, but potentially a position that can only be filled by traveling or contract nurses. The longer the position is open, the more costly it becomes in terms of contract expenses, overtime and staff burnout.
Turnover: Motivational Factors
In order to get a clear vision for what might motivate nurses to stay in their jobs, it is important to examine why they are leaving. In fact, a better understanding of employee needs is a first step in moving towards a solution.
Surveys of RNs who have left their organization reveal that the top reasons for leaving are:
- workload and staffing
- career opportunities
- supervisor issues
- schedule
- compensation
- benefits[4]
The key to retention lies in addressing these factors.
Smart Retention Strategies
Recruiting efforts may be the most effective option in addressing workload, staffing, schedule and compensation. The path forward in the areas of career opportunities and supervisor issues is rooted in a retention-oriented strategy.
A recent NSI report named specific retention strategies with effectiveness rates of 80% or higher. They included continuing education, support in career advancement and team collaborations that enable care settings to do more with less. These learning resources — professional development, management culture and pivoting to innovative staffing team collaborations (float/flex pools) — are immediately available solutions.
Compared to the roughly $50,000 loss of profits resulting from the resignation of just one nurse, an investment in learning resources is certain to be a cost-effective venture. It is not too early to move in this direction.
[1] 2020 AACN Nursing Shortage Fact Sheet
[2] [2] 2022 NSI National Health Care Retention & RN Staffing Report
[3] 2022 NSI National Health Care Retention & RN Staffing Report
[4] People Element – The Hidden Cost of Nursing Turnover 2020