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The Cost of Turnover in Healthcare Industry and What to Do About It

September 28, 2023

In recent years, the healthcare industry in Canada has been facing challenges related to its growing labour gap, with healthcare organizations finding it hard to meet the labour demands. This has become even more profound and apparent during the height of the COVID-19 pandemic, where healthcare workers have experienced a lot of toll on their physical and mental health.

In this article, we discuss the reasons and costs of the high turnover rate in the healthcare industry. We also discuss the strategies that healthcare employers can implement to boost employee morale and make them want to stay in their jobs.

Understanding What Turnover Is

A healthcare professional performing their daily duties.

Employee turnover refers to the rate, in a specific period, at which an employee leaves an organization and is replaced by a new hire. It can be calculated by dividing the number of separations by the average number of employees currently in the company at a specific timeframe. These separations may be voluntary terminations (resignation) or involuntary (lay-off or firing).

Typically, companies keep track of their turnover rate because it provides valuable insights into the health and functioning of their organization. Studying the trends of turnover helps an organization to understand why their staff members are leaving, which may be due to dwindling job satisfaction and employee morale, and also provides them insights into the effectiveness of their recruiting and onboarding strategies.

They also strive to keep their turnover rate at a minimum so they'll be able to retain their valuable employees while letting go of underperforming ones.

What Does It Mean to Have a High Employee Turnover?

While turnover inevitably happens in every organization or company, it may be a serious problem that managers should ponder when the rates are high. Having a high employee turnover means that a company experiences a consistently high rate of employees leaving their roles.

A high turnover rate is generally considered undesirable and can have negative effects on the company and its employees. It indicates a lack of employee satisfaction and stability within the organization. This can lead to various issues, such as increased costs for hiring and training new employees, decreased productivity and efficiency, and a loss of institutional knowledge. It can also impact employee morale and engagement, as well as the overall company culture and reputation.

What is the "Great Resignation" and What Does It Mean for the Healthcare Industry?

The "Great Resignation" is a phenomenon marked by a large number of employees leaving their jobs, which happens at an alarming rate. This may be due to a number of factors, which include an overall feeling of job dissatisfaction because of hostile work environments and being underpaid.

The health care industry, for instance, took a really great blow from this phenomenon, especially during the COVID-19 pandemic where healthcare providers experienced a significant increase in their workload and the need to take more overtime work, more severe health risks, and the need to strictly adhere to the rapidly evolving health protocols during the pandemic.

In fact, results of the 2023 Mercer Canadian Turnover Survey showed that the healthcare industry ranked third in the industries with the highest turnover rates.

Even more alarming is that, despite recapturing the staff members lost during the "Great Resignation," results from the 2023 NSI National Health Care Retention and RN Staffing Report showed that registered nurses (RN) are the most unwilling to return. The registered nurses even have a very high turnover rate that's comparable to the average, with those with less than two years of nursing tenure contributing the most to this high turnover rate.

Reasons Why Healthcare Professionals Decide to Leave Their Work

While it's true that the COVID-19 pandemic led to a surge in healthcare providers leaving their work, the hospital staff had already experienced a lot of stress and burnout in their careers before the pandemic, proving that this healthcare workforce crisis has already long existed. Here are some of the pressing reasons behind the hospital separations of these healthcare professionals:

1) Demanding Schedules with Little Flexibility

Healthcare is, by nature, a demanding career, with employees working long and irregular hours, including night shifts, weekends, and holidays. Medical professionals have little to no flexibility and rarely have a good work-life balance, as providing high-quality patient care should be their priority. The staff shortage contributes more to this problem, with team members needing longer work hours to cover the need for quality care.

2) Additional Workload from Administrative Work

The healthcare industry has become increasingly complex, and the amount of administrative work required has increased substantially. This includes tasks like documentation, billing, and coding, which can be time-consuming and add to the workload of healthcare professionals. This takes away the healthcare professional's time to provide the patient with the care they need and promote better patient outcomes. The heavy administrative workload can lead to burnout, stress, and job dissatisfaction, eventually driving healthcare professionals to leave their jobs.

3) Heavy Workload

The healthcare profession is a demanding career in many aspects, whether on the physical, emotional, or skills part. Healthcare providers must apply their knowledge in complex medical conditions that vary per patient. They must also continuously engage themselves in staying up-to-date with the new and emerging trends in healthcare, to ensure that they provide the best quality of care and best patient outcomes.

Healthcare providers must also employ different soft skills like critical thinking during emergencies and communication skills to effectively collaborate with patients and team members to ensure optimal patient recovery.

Thus, for healthcare workers, balancing all their tasks requires hard work, which, in addition to staff shortage, may lead to the healthcare workers leaving the bedside and seeking other opportunities elsewhere.

4) Lack of Interaction with Managers

In many healthcare settings, there is often a disconnect between frontline healthcare workers and their managers or supervisors. This lack of interaction can lead to feelings of isolation and a lack of support from management. When healthcare professionals do not have regular communication and feedback from their managers, they may feel undervalued and unappreciated in their roles. This can ultimately lead to job dissatisfaction and a desire to seek employment elsewhere.

5) Being Relatively Underpaid

Physicians and nurses are considered two of the highest-paid healthcare workers in Canada, with their annual salaries being more than CAD 80,000. However, most healthcare providers may still feel that their salaries are insufficient to compensate for the high demands of their jobs to ensure that high patient safety and care standards are met.

Specifically, healthcare professionals invest significant time, effort, and resources into acquiring the necessary qualifications and skills to provide quality care to patients.

The financial stress of needing to pay student loans and debt incurred to finish school to pursue a healthcare career doesn't help, and many healthcare workers find it hard to live comfortably while paying for these debts only with their salary.

The Cost of High Turnover and Staffing Gaps in Health Care

Direct Costs of High Turnover in Healthcare

High turnover and staffing gaps in healthcare may easily and directly be correlated to quantifiable costs that a healthcare organization may incur, such as the following:

Indirect Costs of High Turnover in Healthcare

Some less apparent costs may also affect a healthcare organization, such as are as follows:

Strategies to Improve Employee Retention and Decrease Turnover Rates

To reduce the costs incurred by the hospital due to high employee turnover, it's a must to take proactive steps to improve retention and decrease turnover rates. Here are some of the significant changes that you may implement in your organization that can help maintain the employee's job satisfaction and prevent them from leaving their jobs:

Build meaningful connections with candidates through the Caring Support platform.

Streamlined Recruitment Process at Caring Support

Healthcare employees are important assets in any healthcare organization. This, in turn, stresses the importance of increased efforts by healthcare leaders to implement effective retention strategies and prevent experiencing the effects of high resignation rates and incurring losses due to the average cost of turnover.  

At Caring Support, our innovative platform is curated to streamline your healthcare organization's recruitment process by using a behaviour-driven approach to help you match easily with the right candidates. We also help employers form valuable connections with healthcare providers, which may contribute to improving employee engagement even before the candidate has filled the current position being applied to. Book a demo now and maximize the benefits brought by the Caring Support platform today.

About The Author
Cam Adajar
Content Writer

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