1. Retention Management In The Era Of Health
Reform
2011 Becker’s ASC
Chicago, Il.

2. Retention Management In The
Era of Health Reform
Managing Employee retention and managing
turnover are inherently difficult processes for
health care leaders.
Managing turnover and retention requires different
and distinct skill sets

3. Retention Management in the Era
of Health Reform
The employment culture is changing as well. It is
now relatively common to change jobs every few
years, rather than grow with one company
throughout the employment life as was once
commonplace.
How do we stem this trend for employees we want to
retain?
In addition, employees are increasingly demanding a
balance between work and family life.

4. Retention Management in the Era
of Health Reform
The extremely small, unqualified, and diminishing,
labor supply pool in the healthcare sector is
exposing an alarming weakness in the industry.
Only those at the for front of this paradigm will
thrive.

5. 5 Key Steps To
Successfully Retain
Talent

6. Step 1: Identify Your Turnover
Rate
Employee turnover in the healthcare sector is
extremely high;
In some US states it is more than double the
national average of 15.6%.
This alarming (and rapidly worsening) statistic costs
healthcare systems billions of dollars every year and
is a direct threat to the future of the healthcare
sector.

7. Step 1: Identify Your Turnover
Rate
How do you retain high performers, while turning
over those who are not.
As equally important: How do we identify both of
those individuals?
Distinction between regrettable and non-regrettable
turnover

8. Step 1: Identify Your Turnover
Rate
Human resource recruiters often consider
applicants they would have otherwise considered
unqualified due to a low applicant flow.
Managers often select candidates
against HR’s recommendation because they
felt pressure to get the jobs filled rather than
to find the most qualified or even a qualified candidate.

9. Step 1: Identify Your Turnover
Rate
Estimated costs vary from organization to
organization, some as low as a few hundred dollars
to as high as four times the annual salary of the
employee.
These turnover costs should be measured and
constantly monitored over time periods so one can
know what should be done and or paid to retain key
positions vs. having to recruit and train someone to
fill a vacant position at a cost to the institution.

10. Step 1: Identify Your Turnover
Rate
It has been estimated that, on average, it costs a
company one-third of a new hire's annual salary to
replace an employee. Therefore, at minimum wage,
the cost to replace an employee is estimated at
$3,700.
This cost increases exponentially as the skill set,
responsibility and tenure increase per employee

11. Step 1: Identify Your Turnover Rate
For a company to develop a retention strategy,
several steps must be taken.
Assess the current situation / measure the turnover rate
Industry, geographic & Job specific benchmarks are
readily available for comparisons
Establish a base line
Monitoring this data will allow for a problem/trend, either
positive or negative, to be identified and controlled or
capitalized on before it is too late

12. Step 1: Identify Your Turnover
Rate
Turnover is calculated simply by dividing the
number of annual terminations by the average
number of employees in the work force.
The average employee turnover rate is 14.4 percent
annually, according to the Bureau of National
Affairs.

13. Simple Solutions
Modifying HR recruiter performance/behavior
Evaluations to include ratings related to:
prescreening,
tenure after hirer,
evaluation of employees KPIs (Generally a success score
given and not just a goal of hire, hire, hire)
Learning more about the jobs
A standardized applicant screening sheet
A standardized list of “cultural fit” questions

14. Effects: Positive or Negative are
Dramatic
Significantly affect the financial performance of an
organization.
Direct costs include recruitment, selection, and
training of new people.
Indirect costs i.e. morale, managers not managing
(spending time hiring/firing), filling schedules,
productivity, overtime…
Added costs can be much higher than can be
measured

15. Solutions
First, hire the right people and continue to
develop their careers.
Does your company have an ongoing career development
program, tuition reimbursement, or skills training
program?
Do you know what your employees want? Many times pay
is very low on their list.
Do you do an exit interview when an employee leaves/is
terminated?

16. Solutions
An investment in upgrading the workforce is one of the
best investments a company can make when looking at
long-term growth.
Hiring the people that are a good "fit" with the culture
of the organization — meaning that their values,
principles, and goals clearly match those of the company
& current work force —
Training as necessary will go a long way toward
ensuring employee loyalty and retention.
A good skill set doesn’t mean a good fit

17. Solutions
Second, most companies with low turnover rates
are very employee oriented.
They solicit input and involvement from all employees and
maintain a true "open-door" policy that avoids closed-door
meetings.
Employees are given an opportunity for advancement and are
not micro-managed.
Intrinsic rewards are critical. Employees must believe they have
a voice and are recognized for their contribution
Remember that "trust" and "loyalty" are a two-way street. Does
your company's culture encourage open communication and
employee input?

18. Solutions
Third, develop an overall strategic
compensation package
Includes not only base and variable pay scales
Long-term incentive compensation
Bonus and gain-sharing plans
Benefit plans to address the health and welfare issues of
the employees
Non-cash rewards and perks as well.

19. Solutions market, most
To be competitive in today's labor
companies find it necessary to offer a standard benefit
package, including health, dental, and life insurance,
vacation and leave policies, and investment and
retirement plans.
But what more could be done that would be cost effective
toward creating an employee-oriented work environment?

20. Solutions
Employee of the month with rewards
Take your spouse to dinner
Half day of work
Special trips for continuing education
Buy the staff lunch…
Non-monetary rewards often go farther than cash.
Money is just money

21. Step 2: Evaluation and Goal Setting
1ST
Set predetermined KPI’s for performance for each job
description
Leave no doubt as to what is expected for baseline
performance, what underperformance will get you
fired and what over performance will get you a bonus

22. Step 2: Evaluation and Goal Setting
2nd
Have knock-out factors such as harassment, excessive
lateness, reckless endangerment
Some infractions will put your institution at risk and
those can not and should not be tolerated for anyone

23. Evaluation and Goal Setting
3rd
Have weekly/monthly/qtly meetings to review
expectations and progress. If the proper job was done in
the hiring process there is no reason an employee
shouldn’t be able to meet expectations as long as they are
realistic and they have been given the tools to accomplish
their goals. Don’t wait until it is too late to correct an
issue

24. Evaluation and Goal Setting
4th
Document all meetings and benchmark data
Create a standardization
Build upon what has been learned

25. Evaluation and Goal Setting
5th
If someone shows a desire to work, want to be with your
institution and truly is giving their best efforts make all
efforts to keep them, not at all costs but train, educate,
and mentor…those employees will value your loyalty

26. Evaluation and Goal Setting
6th
Don’t let terminations be a surprise
a. It puts your institution at legal risk
b. If it is a surprise management hasn’t done their job
c. There is no reason for it

27. Step 3: Let go of Underperformers
Once an underperformer is identified there is no
reason to keep them on
They show others that improper performance is tolerated
It disensentifies your over achievers
You are giving equal pay to those that do there job vs. those
that don’t and that is BAD business.
Makes room for hard working employees to move up from
the bottom + new candidates to fill the ranks

28. Step 3: Let Go of Underperformers
Retention of underperformers is not good retention
management
Decreases productivity, increases wasted HR hours
on micromanagement; undermines the vision of the
organzation

29. Step 4: Challenging Employees
Career trajectories
For certain jobs it is good to set out a road map of what a
career path looks lake at your institution.
Gives something to work towards
Empowers employees to take their careers into their own
hands. The choice is theirs on how far they go
Transparency is a good thing for everyone

30. Step 4: Challenging Employees
Reward
Allows employees to see your institutions
appreciation, recognition and willingness to follow
through with your commitments to them.
Monetary Small gifts
Added time off Extra tuition reimbursement
Public recognition Faster promotions
Event tickets Trips

31. Step 5: Effective Leadership
At first glance it would appear that the root cause of
this problem is an extremely small talent-supply
pool .
Hint: Look Deeper!

32. Step 5: Effective Leadership
Leading to a whirlwind of aggressive headhunting
amongst competing healthcare organizations.

33. Step 5: Effective Leadership
The real cause of this crippling turnover is poor
human capital management in the healthcare sector.
Remember: Most of this can be prevented by patience, proper
hiring techniques, setting a culture of success, rewarding
proper work and removing those that don’t fit in and
underperform on a regular basis

34. Step 5: Effective Leadership
A shrinking, aging, talent pool is a crisis waiting to
happen if you don’t manage your workforce
effectively.
In addition, the new labor pool presents an
incredible opportunity, if capitalized upon, for your
institution to stay way ahead of the pack

35. Step 5: Effective Leadership
The real issue is that most healthcare organizations
are the equivalent of a badly leaking bucket; pouring
more water into them does not solve the root
problem. To think otherwise is pure insanity.
Don’t follow the pack!

36. Step 5: Effective Leadership
Basing hiring decisions on ill-defined parameters,
poor organizational intelligence, and high employee
turnover rates is the perfect storm

37. Step 5: Effective Leadership
All healthcare organizations are in a situation where
the water supply is low; many of them also have very
large holes in their bucket.
It is easier to mend the bucket than affect supply
So why aren’t more of them doing so?

38. Step 5: Effective Leadership
It takes a significant investment of time, effort,
money, and above all an awareness of the
connection between poor human capital
management, employee turnover, and lost profits + a
willingness to change.

39. Step 5: Effective Leadership
Senior management must be aware of, not just the
holes in the bucket and the rapid decline in water
supply, but the astronomical costs that the wasted
water is stealing from their own bottom line.

40. Step 5: Effective Leadership
If senior management have not acknowledged and
understood this dynamic it will be impossible to
execute an effective human capital management
reinvention---Management must be held
accountable and made aware that this is not a
systemic problem but an ingrained problem that can
and must be changed

41. Step 5: Effective Leadership
Management must be held accountable and made
aware that this is not a systemic problem but an
ingrained problem that can and must be changed

42. Conclusion
“The definition of insanity: doing the same thing
over and over again and expecting different results.”
Benjamin Franklin, 1706-1790
Can your institution become an example of employee
retention in an era of major health care reform?

43. Thank You
Nicola V. Hawkinson, DNP, RN, RNFA
306 East 15th St.
New York, NY
WWW.SPINE-SEARCH.COM
1.516.333.5050