Study: Health Care Orgs Beset By Recruiting Woes

October 12, 2006 ( - US health care organizations face 2007 beset by two severe HR problems - attracting key employees and retaining registered nurses and other critical-skill staff members, a new study says.

A Watson Wyatt survey, conducted with the American Society for Healthcare Human Resources Administration (ASHHRA), found that more than two-thirds (69%) of the 110 health care providers surveyed reported having difficulty hanging on to critical-skill workers to a moderate or great extent, a news release said.

Across industries overall, only 43% of companies have similar retention problems. Convincing registered nurses to stay is the most difficult staffing challenge facing health care providers, with 84% listing it among their top three followed by pharmacists (39%) and rehab therapists (33%), according to the survey.

“Staffing in the health care industry is currently a losing battle of supply and demand. As demand for services escalates, the supply of health care professionals in the workforce shrinks,” said Luellen Lucid, senior consultant for compensation consulting at Watson Wyatt, in the news release. “But these shortages are now creating a serious situation for health care organizations, and they have made little headway in solving the problem.”

The poll found that voluntary turnover, while often uncontrollable, is also hitting health care providers harder than other industries. Health care providers are experiencing a median 14% voluntary turnover rate, which is considerably higher than other industries overall. Nearly half of the respondents (47%) cited relocation as one of the top three reasons employees leave, followed by lack of promotional opportunity (41%) and pay (33%), the announcement said.

According to the survey, health care organizations are implementing various initiatives to cope with the situation including:

  • adjusting pay levels to better reflect the market
  • providing reimbursements
  • forgiving loan payments for educational studies
  • implementing flexible work arrangements
  • enhancing their retirement benefit programs, such as improving the match on contributions that workers make to their 401(k) or 403(b) plans.

The survey noted, however, that few employers are improving other aspects of their employee benefits, including health insurance, paid time off or retiree medical benefits – possible opportunities to improve the attraction and retention of critical-skill workers.

The findings also included that:

  • Overall, only 42% of health care providers have a total rewards plan/ strategy – either formal or informal – compared with 70% of organizations across all industries.
  • Like high performers in other industries, high-performing health care organizations do a better job of aligning pay with performance than low-performing organizations.
  • Long-term incentive plans are an emerging practice in the health care sector. Although only 13% of health care providers have such a plan in place, high-performing providers are more likely to have one for executives (29% versus 0% for low performers).
  • High performers are more likely to have a written charter for their board level compensation committee, follow a documented compensation policy and use a defined peer group for competitive analyses.

Copies of the survey are available to order here .