Health System Management and the Use of New Grad Program for Reducing Turnover Research Paper

Excerpt from Research Paper :

Reducing Turnover in New Graduate Residence Program

Introduction- The process of recruiting and training, particularly in high-impact fields like healthcare, has become increasingly complex and expensive. Turnover is the rate at which an organization gains or loses employees. High turnover means that more employees are leaving more rapidly, which can be harmful to productivity and finances. Real costs of hiring including recruitment time, opportunity costs, and investment in both the new employee and the staff in Human Resources. Indirect costs include training, loss of production, reduction of performance levels, overtime due to inexperience, etc. In fact, this issue is so important that in for-profit organizations, the cost of employee turnover is estimated to be about 150% of the total payroll and benefit package (Rothwell, 2012). One needs to also understand the high costs of post-employment; drug-screening, physical exams, orientation, learning curve, coaching from others, etc. Staff time is difficult to calculate, but in a busy medical facility, for example, more work tends to equal less attention to detail and may result in a decrease in customer satisfaction (The Real Costs of High Turnover, 2012).

The issue of high turnover rates is important in healthcare, as well. Our issue surrounds Community Health Center and the trend over the past few years for new graduate Nurses to leave after one year at CHC. The problem is acute: there are tremendous fiscal losses that cannot be mitigate; quality of care is reduced during periods of low-experience, high-training times, and the public's perception of care and management of the Hospital are reduced due to turnover rates. In the United States alone, nursing colleges and university continue to expand enrollment to meet the rising demands of care. These demand curves in care are influenced by demographics (an aging population requiring more healthcares), hospital budget cuts, and the high cost of educating and training new nurses. Compound this with demand for more experienced employees, and it is easy to see why the market would woo nurses with at least a year's experience away from a Residency or Training Program (American Association of Colleges of Nursing, 2012; United States Department of Labor, 2012).

However, one can look at the issue in two ways: 1) Employee turnover, which is a negative; and, 2) Employee retention, which is a positive. Employee retention focuses on keeping the talent with the organization, reducing costs, and increasing quality of care and patient (customer) satisfaction. Research shows that the largest reason for employee turnover, and therefore the place to start with employee retention is job satisfaction within the first few months of employment. However, this same research shows that it is not just monetary factors that form the reason for turnover; but the manner that they perceive their value to the company. 21st century employees want to be valued, know the company is honest, transparent, and secure with a long-term view of utilizing their talents in a mutually win-win situation (Chen, G., et al., 2011)

Turnover and Healthcare- In the healthcare context, high turnover rates have been associated with poor patient care, patient and employee satisfaction, and in some cases, actual quality of clinical medicine. In modern nursing theory, one of the more important components revolves around the combination of ethical behavior, patient advocacy, and communication within a busy healthcare environment. Losing employees after one year puts the organization into a continual mode of catch-up, without ever really getting ahead. The conundrum is complex, and one has to balance the needs of the organization with the overall patient care paradigm, which means balancing nursing care with fiscal demands, and the ability of the nurse to provide appropriate care, as well as a robust learning environment for their own educational and career needs (Glazer & Alexandre, 2009).

The issue of turnover accounts for about 30% of all healthcare employee separations, and about 25% of all nurses. The same reports shows that 88% of all healthcare organizations view turnover as a "key strategic imperative," most do not focus on it in the strategic and tactical planning process. Figure 1 illustrates the RN turnover vs. hospital turnover, on average, in the United States:

Figure 1 - Hospital vs. RN Turnover Rates

(NSI Nursing Solutions Inc., 2012)

Budgetary and Fiscal Implications - Nationally, the impact is staggering. If one looks just at turnover by tenure, those that leave in the first twelve months account for about 50% of the hospital's total. The actual cost of turnover, as noted, is difficult to measure, but probably amounts to about 20-25% of the organization's final net income. The more significant the turnover ratio is in departments with a high degree of patient impact (and thus fiscal impact) the higher the cost. Further, the higher the qualifications are for the new employee, the higher the cost will be if they resign within one year. This has further economic implications in not only the healthcare market, but the ability for workers to find new jobs, what new geographic locations are available, and where and how they spend their money. To tabulate it more simply, the average hospital loses about $300,000 per annum for each percentage increase in annual nursing turnover (Cottingham, S., et al., 2011)

Healthcare Policies- Within healthcare policies and practices nurses have the highest level of direct patient contact out of any healthcare employee. There are several ways that this turnover impacts the ability of the organization to perform its mission;

Patient Care -- Shortages caused by turnover are proven to cause a decrease in the length of time a patient stays in the hospital, the general quality of care, and a greater number of hospital-acquired illnesses that do not qualify for Medicare / Medicaid reimbursement, thus shifting the fiscal responsibility to other patients or insurers.

Loss of Patients -- A high yearly turnover might result in needing to turn away patients to other facilities; particularly in states that may mandate certain patient to care ratios

Staffing costs -- Contract personnel or simply increasing the workload onto other employee's places high demand on those employees left in terms of excess workload, lack of perceived worth, and high stress.

Support Staff -- High levels of turnover create a disruptive environment that impacts other medical service providers, both in house and external. This also impacts Human Resources, who often then find it more difficult to recruit top talent because of a reputation for higher than average turnover.

Accidents/Absenteeism -- High turnover tends to increase hurried behavior and more likelihood of accidents, as well as burnout, stress, and higher levels of absenteeism among current staff (Hunt, 2009; Bittner, N, et al., 2012).

Implications on Policy and Practice- Solving the retention issue will likely have a drastic and synergistic effect upon CHC. Figures as high as 13% of all new nursing graduates will leave the profession, causing a rebound effect in the stability of the healthcare market. In the short-term, establishing a mentoring program for new graduate hires might seem an excessive expense. However, data shows that the use of qualified mentors significantly reduces the stress, communication, and negatives towards first-year positions. This might mean adding additional hours for those who serve as mentors, or bringing back retired professionals part time, but if the new RN has the psychological support, the communications outlet, the benefit of experience, and an organization that shows them they value their participation through a reward system (See Figure 2), then additional costs would be unnecessary. This, then, would have a positive impact on policy, budgets, employee satisfaction organization-wide, and particularly patient perception and quality of care (Battistoni, S., et al., 2011).

Change Management- Change of any kind, and at any level, is quite difficult. Change and transformational management models focus on take the issue from what it is today to what is desired. This is less formal, sometimes, and more psychological, but requires research and attention to employee's perceived needs. For example, there may be new techniques, different styles or approaches, the use of ancillary skills to foster growth, or even a complete revamp of a program to be successful. The change, or transformation, then, is not just with the employee or employee program, but for management as well (Bass & Riggio, 2011).

In our case study, the use of draconian measures is certainly not a viable option. What is being done now does not seem to be working. Change management implies a shared vision; in this case in which the world of healthcare focuses on higher patient satisfaction, better quality of care, higher employee satisfaction, and cost control. Quality care is expected, and patient advocacy simply cannot be limited because of turnover. In this case, change would solve a problem and improve efficiency. In the long-run, it would reduce unnecessary workload as well, due to training time and using employees in more than one job scenario simply because of need. There are simple key steps that management at CHC could make to find ways of improving this situation:

Figure 2 - Steps to Improve Retention




Sources Used in Document:

Works Cited

Nurses' job satisfaction well below average. (2012, March 5). Retrieved from Medical Express:

The Real Costs of High Turnover. (2012, October). HRNNewsdaily. Retrieved from:

Agency for Healthcare Research and Quality. (2013, January). Researcha dn Data. Retrieved from U.S. Department of Health and Human Services:

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