How ominous are the healthcare employee retention and recruitment challenges facing healthcare HR leaders? Consider this: in one of the plenary sessions at IPMI’s recent Healthcare HR Management Institute, a VP of HR for a major Midwest health system shared a chart showing growth and expense projections over a ten-year span. In year one, labor and other expenses grew at the same rate as revenue. Every year after, expenses took off, easily outpacing revenue, with labor costs leading the pack.
The audience reaction underscored that this was a shared reality.
There are multiple catalysts driving this unsustainable trend, including shifts in reimbursement rates and historic competition for nursing talent. But the challenges are well understood by today’s healthcare leaders. And their attention is understandably focused on how to change that trajectory.
Naturally, conversations and idea sharing over the next few days focused on how to respond. And there were three broad trends:
Hospitals are rapidly creating new revenue streams in a variety of ways. From areas close to their core business, such as wellness clinics and manufacturing generic drugs, to far flung investments such as golf courses and sports complexes, hospital-based care services to foot all the bills.
Mergers and acquisitions are happening at a frenzied pace, and more than one speaker predicted an era of ‘mega-mergers’ to follow soon. The remaining independent hospitals aren’t complacent, either. They’re pooling together to increase bargaining power and generate supply chain savings.
Data use is on the rise, with employers investing in better metrics to understand the most reliable and cost-effective factors in retention, and shifting their mix of rewards to maximize retention for key roles.
The above reflects the major trends. And given the dire predictions about labor and healthcare employee retention and recruitment , there were a lot of meaty discussions about appealing to employees and optimizing rewards.
The emerging initiatives are both creative and pragmatic. Stay tuned.