A few years ago, I was in Argentina and saw advertisements for housing complexes targeting U.S. visitors. The gist of the ads was “move to Argentina in your retirement because we have lots of affordable home care workers.” It was an awkward ad – and I was surprised that even in Argentina, they recognized that the U.S. has a future labor supply problem in the health care sector.
This isn’t news to health and human service managers. Just a few headlines from our reporting in the last couple months paints a picture of the challenge:
- In Illinois, some developmental disability services provider organizations are reporting a 70% turnover rate (see Court Monitor Says Illinois Policy Has Created Workforce Shortage).
- Non-profit organizations that provide developmental disability services in New York State report a 23% staff turnover rate (see New York Non-Profits Providing Developmental Disability Services Report 23% Staff Turnover Rate).
- In Florida, the correctional officer turnover rate has grown by 50.4 %, from 11.7% in 2010 to 17.6% in 2015 (see Chronic Understaffing Of Florida Prisons Creates Safety Risk).
These specific examples are confirmed in the most recent version of Compdata Surveys’ national survey, Compensation Data Healthcare, that reported the turnover rate reported for health care employers in 2015 at 19.2% – up from 17.7% in 2014 (see Rising Turnover Rates In Healthcare And How Employers Are Recruiting To Fill Openings). And we all know that the costs associated with turnover are high. According to the Center for American Progress report, There Are Significant Business Costs For Replacing Employees, replacement costs, by employee wage level, include:
- Low-paying jobs ($30,000)– turnover costs are about 16% of an employee’s annual salary
- Mid-paying jobs ($50,000) – turnover costs are about 20% of an employee’s annual salary
- High-paying jobs, like executives and physicians, which require specialized training – turnover costs are about 213% of an employee’s annual salary
The reasons for high turnover are many. For one, working in health and human services is not easy. And two, compensation plays a big role (see Money Is Only Part Of The Employee Retention Equation). These two factors are compounded by organizations that don’t offer professional development, employee training, and organizational support to staff (see The High Costs Of Paraprofessional Employee Turnover – Sizing Up The Challenge).
The challenge is how to “morph” staffing in health and human services in a world that is increasingly a “gig economy” (see The Gig Economy – Welcome To The World Of Microentrepreneurs and Choices In The World Of The “Gig” Worker).
What is the evidence? A great article from Harvard Business Review (see Aligning Your Organization with an Agile Workforce) notes that 20%-30% of the total workforce is outside “full-time” status (see The Rise Of The Extended Workforce); 30%-40% of full-time employees are supplied from external resources (see Workforce On Demand. Are you ready?); and 25% of employees are project-based and work for multiple organizations (see 53 Million Americans Are Freelancing, New Survey Finds).
The solution presented by both HBR and the Forbes article, Rethinking Employee Turnover, is that in an economy of freelancers, organizations need to develop an “agile workforce.” This means developing a flexible, results-oriented talent approach that uses both traditional employment and a range of alternate forms of employment. But there are a host of regulatory, competency, and recruiting issues for deploying alternate forms of employment in health care. We also have a field with heavy reliance on locum tenens and other temporary staffing – perhaps embracing the agile workforce concept in a formal way would result in performance improvements.
How ready is your organization for embracing the agile workforce concept? HBR outlined the key competencies that organization needs to master in our current market; I’ve selected five key issues that I think executive teams need to take into consideration:
- Identify the critical staff capabilities you need to position your organization for success, and determine the best way to add those competencies to your team – whether that means hiring new talent from outside the industry, utilizing short-term consultants or technical experts to implement a project, or making long-term contractors part of your regular team
- Define the scope of roles and relationships for consultants, advisers, and/or temporary technical experts – and make sure your budget and planning supports those roles
- Clearly define performance assessment, feedback, and metrics for internal — and external — employees; and then assess performance problems promptly and effectively
- Make talent choices based on how an employee or contractor will work with your organization as a whole – filling important positions needs to be as much about cultural fit as technical expertise. This means positioning external employees as colleagues and not “necessary evils.”
- Make sure all external employees are engaged and connected with internal staff – the goal is to have everyone on your team, regardless of position or employment status, focused on the same strategy and working collaboratively to achieve the same goals
For more, check out these resources in the OPEN MINDS Industry Library:
- Reducing Paraprofessional Employee Turnover
- Staff Recognition: More Important Than Ever
- Do You Have The Right Team?
- Maximizing Staff Recruitment Efforts
- Winning the Human Resource Wars: Tried, True & New Strategies for Behavioral Health & Social Service Organizations
- Strategic Human Resource Management: Tackling the Issues of Employee Recruitment & Retention
For more, join the OPEN MINDS team on September 27 for the session, “Development How To Retain & Grow Employees: Turning The Millennial Generation Into The Leaders Of Tomorrow” at The 2017 OPEN MINDS Executive Leadership Retreat, in Gettysburg, Pennsylvania.