The Pros and Cons of Nurse Turnover and Retention, Causes and Solutions

Did you know that it can actually cost over $50k to onboard a nurse in a hospital or medical facility? The cost is doubled when turnover rates increase because the hospital pays for onboarding and training for every new nurse. This is precisely why other industries, particularly manufacturing companies, impose training bonds to ensure that trainees remain within the company for at least six months – in order to make the most of training costs. This is not the case for medical institutions, so training costs should be reduced.

Hours Spent Training are Considered Non-Productive

In this research from KPMG Healthcare and Pharmaceutical Institute, training is actually considered a non-productive part of a nurse’s wage. Non-productivity constitutes about 11 to 12 percent of a nurse’s base pay. The same study believes that around 13 percent of total working hours are not utilized for productivity. This topic was discussed in one of our previous posts. See Reduce Budget for Non-Productive Staff Time by Using Just-in-Time Training.

KPMG’s survey is applicable for regularly employed nurses. New hires will certainly require more hours on training, increasing cost due to non-productive hours.

“Non-productivity constitutes about 11 to 12 percent of a nurse’s base pay.”

Nurse Turnover and Retention

From a balanced point of view, though, the Online Journal of Issues in Nursing (OJIN) by the American Nurses Association points out the benefits and costs of both nurse turnover and retention.

Nurse Turnover Pros

There are advantages associated with turnovers. They include, but aren’t limited to:

• There’s no need to pay for bonuses, leave/holiday pays, or other benefits to outgoing staff.
• New hires are paid less in terms of base wages, overtime rates and so on, compared with regular employees. In addition, new nurses are not immediately provided with a host of other benefits..
• Staff members who perform poorly can be replaced with fresh trainees who are often very motivated, creative, innovative and can bring new ideas to the table.

Nurse Turnover Cons

Turnover costs may or may not be equal to how much is saved in the process. Here are more disadvantages:

• Burden on human resources or recruitment personnel to find replacements for terminated or resigned nurses.
• Cost for advertisement, recruitment, hiring process (interview, medical tests), orientation and training. Vacancies lead to additional cost in terms of overtime pay or for hiring contingency staff, i.e. non-in-house (agency) nurses, to fill the gap. Employee termination itself is costly as it means paying for severance pay, unused leave benefits, and early retirement, in some cases.
• New hires aren’t as experienced as tenured employees, so there is a greater possibility of errors, as well as reduced patient care quality. This may lead to losing patients, and losing revenue in return. Productivity may also be compromised.
• Specific organizational processes may be forgotten and not passed on by employees who have left the organization to newer employees.
• Turnover may also demoralize remaining staff; affecting their productivity, attendance and overall satisfaction at work. Those who are forced to fill in the hours may feel overworked and unmotivated.

“Nurse turnover and retention both offers advantages and disadvantages.”

Nurse Retention Pros

Retaining employees offers advantages that are exactly the opposite of nurse turnover cons. In addition, it promotes a better work environment and culture since nurses regularly collaborate with other tenured staff members. Retention makes employees trust the company too.

Nurse Retention Cons

Tenureship is similarly costly though. It is often required to increase yearly salaries and/or benefits in order to keep experienced nurses. Additional awards, recognition, bonuses, and even stock options are optional costs too. The hospital will also potentially pay for promotion, career advancement and continuing education. The latter may even include tuition reimbursement, if the hospital sponsors it.

Most lost long-term nurses are more vocal as well, so there’s a need to build and maintain a good relationship between them and the hospital board. Communication lines must be open. Scheduling should be creative and firm, as more tenured nurses tend to complain in order to choose their own shifts.

Why Nurses Leave

While both turnover and retention offer benefits, the latter appears more advantageous in terms of monetary cost, so it’s best to understand why they leave and how to make them stay.

What makes nurses leave? The rationale varies and it’s not always because of money. SuccessFactors Inc. conducted research which proved that about 43% of nurses prefer increased staffing over increased wages or shifts. Other reasons include the following:

• Excessive work volume
• Demanding schedule
• No reward or recognition for achievements
• No value or respect for contributions and job performance
• Scarce opportunities for promotion and career development or advancement
• Poor work environment and culture – employees do not collaborate and cooperate with one another
• Management is either unreachable or doesn’t reach out

“About 43% of nurses prefer increased staffing over increased wages or shifts.”

How to Make Nurses Stay

Compensation and benefits are initially attractive to nurses, but these are not always enough to make them stay. Some possible solutions to reduce turnover and increase retention include:

• Scheduling and balancing distribution of responsibilities to avoid overworking the staff
• Helping nurses deal with stress and build teamwork through team building events and activities inside or outside the hospital
• Offering performance or contribution based rewards and recognition
• Developing programs for career development, advancement and promotion
• Opening communication lines between management and employee when it comes to critical work processes or anything which affects performance as well as satisfaction at work

In addition, candidates should be screened properly in order to select serious applicants over potential job hoppers who move from one organization to another.

About Tine Health

Tine Health can help reduce turnover and increase retention for nurses in your hospital or health facility by improving training methods. We offer just-in-time training for various processes and medical devices to increase productivity, minimize errors, and improve patient care, thereby, improving nurses’ overall performance and satisfaction at work.

Article Sources:

• KPMG Healthcare and Pharmaceutical Institute
  http://www.natho.org/pdfs/KPMG_2011_Nursing_LaborCostStudy.pdf
• The Online Journal of Issues in Nursing (OJIN) by the American Nurses Association
  http://www.nursingworld.org/ANAMarketplace/NurseRetention.html
• Success Factors Inc.
  https://www.nmlegis.gov/lcs/handouts/LHHS%20081312%20NursingTurnover.pdf