In the past few years, national unemployment rates have slowed, while turnover rates are on the rise. That means that doctors, nurses, and other medical service providers have options about where they work; if they’re not satisfied with their current organization, it’s relatively easy to find a new job. According to data from CompData Surveys, the average turnover rate in the healthcare industry is 19 percent—2.3 percent above the average across industries. This high turnover rate makes it essential that healthcare organizations understand the difference between healthy and unhealthy turnover, actively look at their organization’s rates, and address issues to reduce costs, while also keeping top talent engaged.
Who is leaving your organization?
It’s easy to focus all your efforts on decreasing turnover; but it’s also important to understand who is leaving your organization. Are top performers leaving? If so, that’s a problem. If you’re replacing 19 percent of your most talented workers every year, it’s costly and counterproductive.
If low performers are leaving, that makes room for you to recruit, hire, and engage new talent and focus your efforts on building an engaged and high-performing workforce.
Why are employees leaving?
Effective leadership, engagement, and recognition are critical when it comes to retaining the employees you want to keep. As you tackle turnover, review your organization’s data to identify who is leaving (high or low performers), but also examine what is causing them to leave. Employees leave organizations for a variety of reasons, including:
- Professional growth (position with more responsibility and higher pay)
- Leadership issues (ineffective management)
- Personal needs (relocation, family, etc.)
To discern whether or not your organization’s turnover is healthy, measure and identify trends. Look at the data to understand if, before departure, the employees:
- Received market-competitive pay rates
- Worked on the same team or under the same supervisor
- Earned promotions
- Participated in career development opportunities
These data points will help you understand if there are areas you need to address (management, training, compensation, career advancement, etc.) to keep top performers interested and engaged.
What does turnover cost your organization?
Executives and business leaders are concerned about turnover not only because it means people are choosing to leave, but because replacing those employees impacts the bottom line. Replacing even one entry-level employee can cost up to 50 percent of their annual salary; replacing someone at a higher level or with specialized training can cost even more. The organization also loses any financial investments they made in that employee for skill development or advanced training.
In addition, a healthcare organization may experience related costs when an employee leaves, including:
- Decreased quality of patient care
- Costs for contingent workers
- Increased accidents
- Higher absenteeism rates
When there’s a high rate of turnover, the instability that’s created affects the entire organization. Particularly in the healthcare industry, where stress levels are high and employees face life and death situations on a daily basis, workers are not only losing a colleague, they may also be losing a key member of their support network who helps navigate stressful situations. As a result, staff may begin to question their jobs and wonder if there are better opportunities outside the organization—which could lead to additional turnover.
Reducing Unhealthy Turnover
If you’ve determined that the turnover in your organization, or within a particular department, is unhealthy, it’s time to develop a plan for employee retention. There’s no way to ensure every outstanding employee will stay with your organization forever; however, there are things you can do to keep them around if unhealthy turnover is cutting into your business’s bottom line.
Fair compensation, decent schedules, and good benefits are all important factors for choosing a job, but they’re rarely the only factors. Many times the best way to reduce turnover is to first take a look at how your organization is operating from the top down and fix leadership issues that cause ambiguity, foster organizational politics, and cause employees to lose focus on patients, which should be their first priority. All employees need to understand the organization’s core values and mission and be coached by a manager who makes it clear how they can be successful in supporting those directives. Finally, employees must be recognized for their efforts, which only reinforces the mission and goals set out by your hospital or health system.
Bottom line: turnover isn’t always a bad thing, but unhealthy turnover can be costly. There’s no magic wand that will fix every turnover issue your healthcare organization faces; but if you use creative ways to address and improve turnover rates, it’s more likely that you’ll engage—and retain—the top performers who truly make your organization stand out.