Key insights for your executive team
The pressures that have recently transformed the American workforce have especially burdened healthcare workers. The healthcare industry was uniquely affected by the COVID-19 pandemic in that they were the front lines of the battle to end it.
Healthcare was seeing some distressing trends even before the pandemic:
- The supply of workers was decreasing.
- A lack of nursing programs starved the pipeline.
- An aging workforce threatened to deplete it; while the average age of the American worker is 42, the average age of the American nurse is 50.
- Workers with less training were poached by retail and fast-food businesses.
- Workers with more training were poached by life sciences companies.
- Hospitals are too dependent on traveling nursing programs.
The issue was encapsulated by Grant Thornton Healthcare Tax Services Leader Mary Torretta: “I think healthcare was probably the hardest hit industry, and we’re certainly hearing it from clients. It’s a time where our country needs healthcare workers, and they’re not there.”
Consolidations, COVID-19 and other stressors
Using our employee engagement calculation, 50% of healthcare workers are engaged, and 22% are highly engaged. Engaged employees have a behavioral connection to the company. They say good things about it to others, they go above and beyond in their daily work activities, and they want to stay working at that company. Employee engagement can drop by 10 or 20 percentage points the minute a merger is announced, and the new organization can take a year and half to bounce back. By that time, another merger is often underway. These consolidations have resulted in larger and larger healthcare systems and thus added more layers between C-suite executives making the decisions and front-line personnel providing patient care, including physicians. At its worst, the mentality becomes Us vs. Them.
In addition, massive stresses on the industry have come by way of COVID. Grant Thornton Principal in Human Capital Services Sharon Whittle emphasized this factor: “Pre-COVID, we had a shortage of clinical folks in the healthcare industry. COVID really magnified the situation. It accelerated the labor supply shortages that we knew we were going to have anyway.”
While the healthcare industry is not able to accommodate remote working to a great extent, the ability to offer some remote jobs has been a boon in that is has expanded the size of the labor market. But even this ability has presented drawbacks – particularly for hospitals located in lower labor markets.
“We’re seeing now that employees that were geographically limited can now work remotely at larger markets like, say, San Francisco or Miami, at higher pay,” David Tyler, national managing principal of Healthcare for Grant Thornton, said, the consequence is that the pay differential that used to be a benefit for smaller market facilities, for cost savings, is now a disadvantage because they cannot attract even local workers to these positions.
Workers face long hours, difficult working conditions and devastating patient losses, even by healthcare standards. In their private lives, many healthcare workers are also caregivers, sandwiched between debilitated parents and dependent children. Many are single parents; others carried significant debt. Recent studies show that many are suffering post-traumatic stress disorder symptoms more commonly associated with veterans returning from war.
The crisis is most acute in nursing, with an estimated 1.2 million nurses are needed to replace those leaving this year, in a field where the average age is significantly higher (50) than the average worker age overall (42). Tyler said the first step in addressing this is to understand what motivates nurses to choose the profession.
“Nurses, in particular, are doing it because they really care about people,” Tyler said. Making sure their job conditions are helping them however possible – through fair pay, meaningful benefits – offers them a way to be focused on their patients and not on whether a move to a cross-town hospital is what they need.
Tim Glowa, principal of Human Capital Services at Grant Thornton, said hospitals also have to enlarge the pool of applicants and that means considering international talent. Tyler said one of the few ways the government can help healthcare is to make it easier to credentialize workers who are crossing international borders to take a job.
Fortunately, the people who are attracted to healthcare are naturally resilient and optimistic. And, even more fortunately, there is some reason for optimism.
Where does it hurt? Find and address the pain points
The key to winning as an employer is to think like a marketer. The best practice is to survey employees and organize focus groups to determine what matters to them — including benefits — and levels of satisfaction. You can then estimate the probability that any given employee will leave your organization, and take appropriate steps to keep them.
The Grant Thornton study found that among healthcare workers, the top three drivers of stress are personal debt, medical issues and mental health. That’s a valuable starting point to think about the benefits that make the most sense.
Consider, for example, financial coaching for younger employees, extra payments into retirement funds for older ones, meal services for busy parents and student loan relief for recent graduates. Although hospitals can’t offer the option to work from home to all workers, you could offer longer shifts for fewer days. Given the importance of mental health, you can enhance your employee assistance programs and offer services beyond the traditional employee supports.
Tyler said one way to relieve the stress of understaffing is to cross-train nurses so you are better able to shift them to temporary assignments to plug staffing holes. Understaffing issues also can be addressed by selecting areas of a hospital to close for periods of time, and less profitable areas should come under some scrutiny for these adjustments. According to Tyler, “This crisis can be a catalyst to have challenging discussions about service rationalization – particularly when combined with the M&A activity.”
Getting the table stakes right includes providing competitive compensation and working conditions. Are there pay equity imbalances between current and new employees? When employees do leave, make the offboarding process smooth and friendly. About 15% of employees are either referrals or later returnees; treat outgoing employees as potential incoming employees — and treat incoming employees well.
Healthcare facilities also must address their over-reliance on traveling nursing programs. Traditionally, Tyler said nursing programs were a beneficial arrangement that enabled nurses to travel to different areas seasonally both for personal and professional reasons. But their overuse to fill labor gaps has made hospitals too dependent on them because there is such an acute need, which in many cases has been very beneficial to the travelling nurse programs many of which are reaping unprecedented profits. Tyler said this is top-of-mind for many hospital CEOs who are trying to join efforts to refocus these programs on people over profits.
Changes must be made to the healthcare worker pipeline, too. Thinking long-term, some organizations are beginning to introduce middle school students to the possibilities of healthcare careers. Many high school students concurrently attend college and graduate with an associate degree, making obtaining an LPN or CNA license in high school a reality. A few liberal arts schools have changed their purpose and curriculum to align for the heightened demand for clinical healthcare occupations.
Ultimately, the best recruiters are current employees who serve as raving fans, whose passion to live their natural compassion finds fulfillment in your culture. They’re the essential element of a workplace where people want to stay and where desirable candidates want to be.
David Tyler is a partner in Grant Thornton’s Health Care Advisory Services practice. Based in the firm’s Atlanta office, Tyler leads the national managed care services and the Health Care Advisory Services practice in the Mid-South market territory.
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