Health Care System Challenged by Staffing Shortages, Tight Budgets

August 15, 2001 ( - The health care industry faces increasing staff turnover costs, staff shortages and the challenges of attracting and retaining talent on a tight budget, a new survey finds.

Results of the survey by Unifi Network, a subsidiary of PricewaterhouseCoopers, put employee turnover costs for a typical healthcare system at between $14 million and $27 million per year.

Accounting Costs

And while all the CEO’s and other executives in the sample are being held accountable for operating income, and 67% of CEOs and half the system’s executives are held accountable for revenue, these goals are not always driven down throughout the organization, according to the survey.

In addition, the Total Compensation in Integrated Healthcare Systems: 2001 survey found that 75% of the healthcare systems in the sample reported that their financial results are currently on a par or worse than in recent years.

And almost all systems in the survey are looking to reduce their own healthcare spending as a means of containing costs.

Staffing Shortages

The survey found that 90% of the organizations interviewed face critical staffing shortages. More than a third have had a vacancy of six months or more in a key position within the last year and a half. Almost all of these companies expect these shortages to continue over the next year, particularly in the nursing sector.

Findings also show that, perhaps in a bid to keep a lid on costs, a mere 25% of the sample makes use of retention rewards. However, in the face of these efforts to contain costs, about 45% of survey participants do not make use of one of the most cost-effective recruiting tools, the Internet, in their recruiting efforts.

The survey comprises compensation and performance data for 90 management and professional positions, 18 region or division level positions and 52 hospital level positions.