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Media Advisory


CHICAGO, September 3, 2002—The nursing shortage is expected to reach one million by 2010 and 1.5 million by 2020. In the current healthcare industry environment - with its staff shortages, higher patient volumes and dwindling profit margins - the healthcare industry must understand that workforce retention is a major factor in an organization's success.

"The cost of replacing a nurse is estimated to be anywhere from $10,000 to $145,000, depending on the type of job, level of experience and clinical skills required," Steven M. Barney, FACHE, senior vice president - Human Resources, SSM Health Care, St. Louis, MO writes. At a time when turnover in healthcare averages 20 percent, only about half of all U.S. hospitals have active employee retention programs. Of those retention programs, only 10 percent are effective.

Retention of employees should be top of mind in healthcare organizations, according to Barney. Healthcare executives must recognize the significant contributions that nurses, radiology, pharmacy lab technicians and other healthcare professional make to quality patient care and patient safety. Barney highlighted five steps in the retention process:

  1. Hire the right people. Finding the qualified person with the right amount of experience is difficult when so few people apply for a position. To ensure a good selection of applicants for every position, internal recruitment efforts must be as aggressive as the external efforts of recruitment firms.
  2. Develop a welcome plan. Human resources leaders know that the first year for any employee is critical. In fact, one-third of nurse turnovers occur during the first year of employment. Managers should be aware of this phenomenon and arrange for many avenues of personal contact with new employees.
  3. Measure turnover. If it is unclear how effectively an organization is in retaining employees, measure turnover. First, identify the worst performing units and the reasons employees left those units. Second, once the reasons have been identified, assign accountability for reducing turnover to the unit managers.
  4. Hold medical staff members accountable for their role in turnover. Work to involve managers in employee-retention initiatives by making them accountable for the turnover on their units. The loss of a piece of equipment valued at $30,000 would certainly be taken seriously and managers would be held accountable, likewise the loss of an employee should be taken seriously too.
  5. Set goals, but be realistic. If the turnover rate in the organization is around 20 percent, setting a goal to decrease the rate to 10 percent next year may be overly optimistic.

Please note: An earlier article appearing in the July/August 2001 issue of Healthcare Executive, "A Model Workplace: Creating an Effective Nursing Environment," outlined several strategies currently in place across the country to cope with the supply and demand for nursing services. For more information about these strategies or for a copy of the article, please contact Edelman at (312) 240-3370.

(Barney S. Retaining Our Workforce, Regaining Our Potential. Journal of Healthcare Management, 2002;47(5):291-294; available upon request)

For more information, contact Edelman, on behalf of the American College of Healthcare Executives, at (312) 240-3370.

To contact Steven M. Barney, FACHE, call SSM Health Care's Press Office at (314) 994-7818.