Hospitals pay high turnover costs due to RNs leaving the profession
Hospital turnover increased by 1.7% during the past year and currently stands at 19.5%.
Photo: Dean Mitchell/Getty Images
Due largely to the COVID-19 pandemic, registered nurses are leaving healthcare, with many retiring early or simply leaving the profession for other pursuits, burdening hospitals with exorbitant turnover costs, a new report finds.
The 2021 NSI National Health Care Retention & RN Staffing Report found that since 2016, the average hospital has turned over about 83% of its RN staff and 90% of its overall workforce, with the cost of turnover for a bedside RN ranging between $28,400 and $51,700 – enough to cause many hospitals to lose between $3.6 and $6.5 million per year.
Overall, the healthcare job market continues to trend upward, with 37.4% of surveyed hospitals anticipating an increase in their labor force. But this upward trend is being dampened, and is down more than 16% from the previous year, suggesting uncertainty caused by the coronavirus.
Hospital turnover increased by 1.7% during the past year and currently stands at 19.5%. While hospitals didn't meet their 2020 goal to reduce turnover, they're now doubling down on a higher goal, eyeing a 4.7% reduction in turnover rate.
Still, hospitals are experiencing a higher RN vacancy rate. Currently, this stands at 9.9%, up another point from last year. Less than a quarter of hospitals reported a RN vacancy rate of "less than 5%," but more than a third (35.8%) reported a vacancy rate exceeding 10%. In total, it takes three months to recruit an experienced RN, the data showed.
Feeling the financial stress, hospitals expressed an interest to decrease reliance on supplemental staffing, particularly given the higher rates being charged due to COVID-19. The greatest potential to offset margin compression is in labor expense.
For every 20 travel RNs eliminated, a hospital can save, on average, $3,084,000, NSI found.
WHAT'S THE IMPACT?
To further understand turnover, the survey respondents were asked to identify the top five reasons why employees resigned. Participants were asked to select from a list of 20 common reasons. Career advancement and relocation were at the top of the list, while retirement was the third most common reason, moving up two spots from 2019 and cracking the top three for the first time.
Rounding out the top 10 reasons are: personal reasons (caring for a child/parent, marriage, disability, etc.), unknown, education, workload/staffing ratios, working conditions, scheduling, and salary.
An overwhelming 94.8% of hospitals view retention as a "key strategic imperative." Almost 81% have retention initiatives in place, but only about half have tied these to a measurable goal.
Meanwhile, the RN vacancy rate continues to be concerning, and currently stands at 9.9%, almost a full point higher than 2020. An elevated rate directly impacts quality outcomes, the patient experience and leads to excess labor costs such as overtime and travel/agency usage. In 2019, less than a quarter (23.7%) of hospitals reported a vacancy rate greater than 10%. Today, more than a third (35.8%) are in this group.
This downward shift indicates that the RN labor shortage will continue to challenge hospitals. Of significant concern is that 62% of all hospitals have an RN vacancy rate higher than 7.5%. Given the economy and impact of COVID, RNs are no longer delaying retirement, and many have gone back to travel nursing, particularly given the lucrative contracts. During the pandemic, travel nurse packages reached $10,000 per week.
Step down RNs saw the greatest rate of turnover in 2020, at 24.4%, followed by behavioral health (22.7%) and emergency (20%) nurses. Women's health, surgical services and burn center RNs saw improved turnover rates, by contrast. Among all RNs, the turnover rate was highest among those with 2-5 years of experience.
While hospitals expect to grow their hospital and RN workforce, only 26% anticipate an increase to the recruitment budget, and just 18% plan to increase their recruitment staff.
To strengthen the bottom line, hospitals need to build retention capacity, manage vacancy rates, bolster recruitment initiatives and control labor expenses, the report concluded.
THE LARGER TREND
A number of COVID-19-related issues are affecting the employment and turnover metrics, not least of which is nurse burnout, which has been prevalent during the pandemic. Almost a third of nurses who left their jobs in 2018 did so because of burnout, according to a study in JAMA Network Open. Even among those that didn't leave their job, 43.4% identified burnout as a reason that would contribute to their decision to quit.
Working in a hospital setting was associated with 80% higher odds of burnout as the reason for quitting than for nurses working in a clinic setting, according to the study.
The added layer of the pandemic, and with it, higher levels of staffing shortages and fears of exposure, has only made matters worse for healthcare workers. During the spring and summer of last year, 49% of healthcare workers reported feelings of burnout, 38% reported having anxiety or depression, and 43% suffered work overload, according to an EClinicalMedicine study.
Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com
