Making the case for increased HR tech adoption in healthcare

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Jordie Black
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The healthcare industry is facing an undeniable staffing crisis. Shortages of doctors, nurses, and other essential personnel have reached critical levels across the UK. This growing problem has wide-ranging impacts that threaten the quality of patient care, increase costs, and hinder the performance of healthcare businesses.

In this benchmark report, we will examine the core factors driving the healthcare talent shortage. We will quantify the staggering costs of constant recruiting, training, and retention efforts. Most importantly, we will outline the downstream effects staffing problems have on patient health outcomes, employee satisfaction, profit margins, and long-term viability.

With turnover rates climbing and unfilled positions accumulating, healthcare providers need help to afford inaction. This report aims to spur stakeholders across the industry to prioritise investments in their workforce. Without solutions to expand and support nursing, strengthen the talent pipeline, and improve working conditions, staffing challenges will continue escalating to unsustainable levels.

The strategies and metrics contained in the following pages provide an essential roadmap toward building a skilled, satisfied workforce to meet future demands.

The current landscape

The UK's healthcare system is experiencing crippling staff shortages across the public and private sectors. According to recent NHS data, England alone is struggles with over 112,000 vacancies, including a deficit of 40,100 nurses and 8,550 doctors. This represents a vacancy rate of 9% for nurses and 6% for physicians. The NHS increasingly relies on temporary agency workers, with spending on agency staff rising 23% to £2.96 billion from 2018-2022. Taken together, the NHS now spends over £8 billion annually on bank and agency workers to plug staffing gaps. But vacant posts continue accumulating as burned-out personnel leave faster than they can be replaced.

The situation is equally dire in adult social care services in England. The total number of job posts slightly increased to 1.79 million in 2021/22, and providers have needed help finding people to fill them. Approximately 165,000 roles sat empty last year, representing a staggering vacancy rate of 10.7% across the sector. Exacerbating matters is the 3% decline in filled positions, as caretakers resign faster than fresh recruits can be onboarded. At 29%, turnover rates persist at worrying levels. And new starters are down over 6% from 2018-2019. If recruitment and retention do not improve significantly, staffing shortfalls will increase in scale and consequence.

With unfilled vacancies soaring, understaffing is now the status quo for healthcare services. The implications for patient outcomes and system stability are alarming. Until meaningful steps are taken to expand workforce capacity, strengthen recruitment pipelines, and foster greater retention, staffing challenges will continue to compromise the quality, safety, and accessibility of care.

Data from Oracle highlights the total cost of employee turnover in healthcare industries. To put those figures into perspective, consider the following case examples. 

Case study 1 Hidden costs of turnover: administrative burden of background checks

Suppose a care home employs approximately 1000 staff per year. With a turnover rate of 29% typically seen in the industry, the care home would need to replace 290 staff members who left over the last year.
To fill these 290 positions, background checks must be conducted on each new hire for compliance, taking about 5 hours of administrative time per person. If the admin handling the checks is paid £25,000 annually, or £12 per hour, then the additional time spent on checks would be 290 x 5 hours = 1450 hours.

With the admin rate being £12 per hour, the total estimated cost for the admin's time to complete background checks on the 290 replacements is 1450 hours x £12 per hour = £17,400 annually.

In this scenario, a care home with 1000 staff and a 29% turnover rate would incur £17,400 each year in admin costs alone to conduct required background checks when replacing the 290 leavers. This illustrates one small example of the hidden costs and time associated with high turnover.

Case study 2 The high price of nurse turnover: quantifying vacancy impacts

A hospital employs 500 nurses at an average salary of £30,000 per year. With a nursing turnover rate of 19.5%, consistent with hospital industry benchmarks, the hospital would have about 98 nurses leave in a given year.

According to research, the average cost of turnover is about 6-9 months of the employee's salary. For these 98 nurses, that results in a turnover cost of £1.47 million to £2.21 million annually (98 nurses x £30,000 average salary x 6 to 9 months).

High turnover also impacts patient care. When short-staffed, nurses take on more patients leading to rushed care. Patients notice the impacts like long response times to calls and frequent handoffs between nurses. This erodes patient trust and satisfaction in the care received, potentially damaging the hospital's reputation.

This example illustrates how turnover costs for healthcare employers like hospitals can quickly accumulate into the millions based on separation rates and salaries. There are also patient care and repetitional risks associated with excessive churn.

Case study 3 Time is money: extended vacancies in healthcare revenue cycle

Within healthcare professions, the inefficiencies with time-to-hire mean organisations miss out on key talent when they need them most. For example, when looking to fill an entry-level revenue cycle role with a salary of £25,000, the average cost to recruit is around £1,800, and it takes 84 days, or 12 weeks, to fill the vacancy.

For a mid-level revenue cycle professional earning £35,000 annually, the typical recruitment spend increases to £3,000, and the hiring process extends to 153 days or 22 weeks without anyone in the role.

At the senior revenue cycle level, with an average salary of £50,000, the cost to find qualified candidates climbs to £4,800, and the position remains open for 207 days or 30 weeks before being filled.

These long vacancies result in lost productivity and revenue while positions sit empty. They also mean healthcare providers can lose top applicants to competitors with quicker hiring processes. Investing to streamline recruiting and talent acquisition is essential to fill critical revenue cycles and other healthcare roles faster. Doing so ensures organisational capacity keeps pace with demand and growth.

A start to a solution

There is no quick fix to the healthcare staffing crisis, but leveraging technology can help create a foundation for improvement in recruitment and beyond. Here's a draft paragraph:

While technology alone cannot resolve the healthcare workforce shortage overnight, targeted use of automation and digital tools within the recruiting process can maximise efficiency for hiring teams. 

Streamlining cumbersome manual tasks like screening applicants, scheduling interviews, and processing onboarding paperwork frees up recruiter time to focus on strategic priorities like building strong talent pipelines, promoting the employer brand, and enhancing the candidate experience. 

Efficient, tech-enabled hiring processes also allow healthcare organisations to start filling critical open positions faster. This increases overall workforce capacity, so existing staff are well-rested. 

The time and cost savings from recruiting technology creates bandwidth for organisations to invest in comprehensive retention strategies focused on employee wellbeing, development, and engagement - enabling them not just to hire top talent but also retain it.

Final thoughts

The healthcare industry is at a pivotal point, with staffing crises impacting every facet of patient care, operational efficiency, and the well-being of professionals dedicated to saving lives. The data reveals not only the staggering costs of turnover and recruitment delays but also the intangible price of decreased patient satisfaction and eroded trust in healthcare systems. As we've seen, even the administrative costs of constant hiring can drain resources better invested in patient care or staff development.

The adoption of HR technology presents a promising solution to counter these difficulties. Healthcare organisations can expedite hiring processes, streamline operations, and better serve their patients by harnessing automation and digital tools.

The future of the healthcare sector hinges on its ability to adapt, innovate, and invest in the right solutions. Embracing technology in HR processes is not just about efficiency; it's about securing the future of healthcare and ensuring that every patient receives the quality care they deserve. As industry leaders, stakeholders, and decision-makers, the time to act is now. Let's prioritise our healthcare professionals, leverage the tools at our disposal, and create a sustainable, thriving future for the healthcare sector.

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