Staff turnover rates costly to hospitals – will we see them escalate further?

How organizations determine the cost of employee turnover can vary. Some look at only the recruitment costs. For example, in 2008 HealthForce Ontario estimated it costs $25,000 to recruit a nurse. Others look at broader impacts, including the cost of severance, recruitment, training, overtime and lost productivity. London Health Sciences Centre, for example, estimates the real cost of employee turnover can be as much as 1.5 times the position’s annual compensation.

At the Niagara Health System Kevin Smith, the government appointed supervisor, noted in his interim report the difficulty the regional hospital system faces in recruitment and retention, estimating a 5.7 per cent annual rate of turnover to 2019. That turnover is about equally divided between retirees and those who simply decide to resign and seek work elsewhere. That means about 1,750 staff will need to be replaced between 2013-2019. Seventy physicians will also need to be replaced over that period.

“There is intense pressure and frankly competition to attract the best and the brightest to any organization and the NHS is currently at a disadvantage,” Smith notes.

The reasons include the reputational damage the NHS has suffered in recent years, including a lack of trust and confidence in the multi-site hospital by the community. The fact of his appointment, and dismissal of the previous board, places the hospital on an “interim” footing that gives little confidence to prospective employees.

Smith is also concerned that low morale will discourage the professionals that presently work at the hospital from encouraging others to work there.

What’s curious about all this is that the staff turnover rate at Smith’s home hospital of Hamilton St. Joseph’s Healthcare is posting inconsistent numbers that, depending on how you read them, are either similar or worse compared to Niagara.

On a page devoted to the hospital receiving a top employer award, Hamilton St. Joe’s states they have an 8.34 per cent voluntary turnover rate. Under the “system performance” section of their website, Hamilton St. Joe’s states their staff turnover rate for October-December 2011 was 5 per cent. Their target is to keep below 7 per cent.

If you think that Hamilton St. Joe’s is out of line, London Health Sciences posted a 7 per cent staff turnover rate during the third quarter of 2011-12. According to the LHSC website, physicians, residents and staff number about 15,000.

Surprisingly, despite an insecure economic environment, many hospitals are recording an upswing in their turnover rate. Instead of hunkering down and weathering the economic storm, many health care workers are clearly expressing their views by walking out the door.

If health care professionals and support staff are beginning to vote with their feet, it could turn out to be very costly to Ontario’s health system.

This comes during a time in which the Tories are introducing a private members bill to freeze wages in the public sector for two years. For non-union workers, that could mean four years without a wage increase.

There isn’t barbed wire around the province to keep health care workers in. The decisions made at Queen’s Park, as well as their local hospital, could mean both high HR costs and a decline in quality of care.

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