Physician engagement is becoming the cornerstone of leadership in healthcare. Statistics have shown that engaged physicians can significantly impact your organizational productivity and patient care. However, one element that is commonly overlooked is that Physician Engagement can also reduce turnover in the organization. Leaders set the tone for the culture of the organization, and an engaged leader tends to have a team whose members are satisfied with their jobs.
Turnover Rates are Rising– According to a recent report by Compdata Surveys, turnover rates are rising across the board. When examining all industries, we see that total employee turnover is up over 3% in four years (from 15.1% in 2013 to 18.5% in 2017). For healthcare professionals, the current rate of turnover is 20.6%, second only to hospitality, especially that competition for jobs is not as stiff as it was a few years ago. This year health care unemployment rates hit 2.2%, the lowest they’ve been in over 10 years (US Bureau of Labor Statistics). These facts coupled with an increasing number of millennials in the workforce results in a workforce that is not afraid to make major transitions to advance a career or achieve greater work-life balance.
Turnover is Expensive– Every lost employee represents financial loss for an organization. The process of hiring and onboarding can be very expensive. Budgets include dollars for employer branding, recruiting and unique employment offers. The team spends significant time interviewing, selecting, training and integrating new talent. Turnover costs are estimated to fall within 100-300% of the employees base salary (Center for American Progress) and these don’t include the soft costs.
Highly Skilled Turnover is EVEN More Expensive– Turnover in highly specialized positions often has higher associated costs. The same study from the Center for American Progress found that for very highly paid and specialized positions, the average cost of turnover is 213% of the employee’s salary. If your average hospitalist makes $220,000 per year, that’s an estimated cost of $468,600 when that hospitalist leaves – even more when you consider the lost revenue from an absent physician.
Dissatisfaction Drives Turnover– A prominent psychologist created the Mobley model to outline the psychological progression that leads people to become dissatisfied with their job and eventually change their employer. In those steps we see how feelings of dissatisfaction build on each other to incentivize transition. In 1988, Thomas Lee published an article in the Journal of Business and Psychology that replicated the model and extended it to apply to “organizational commitment and job involvement.” Lee’s study found positive correlation between organizational commitment and job retention. In 2004, Pinnacle Health Group performed a study to determine the top reasons physicians leave their current positions. Among the top of the list were higher salary, malpractice premiums, and job dissatisfaction (underutilized, lack of autonomy, lack of appreciation, undesirable hours).
High Turnover is Preventable– Investing budget toward developing organizational engagement can stave off larger costs down the road. By implementing engagement practices, you can increase your physicians’ satisfaction and sense of purpose in the organization. Zeynep Ton, a former professor at the Harvard Business School, published an article in Harvard Business Review discussing how businesses can combat turnover through strategic engagement of the workforce.
“Highly successful retail chains… have demonstrated that, even in the lowest-price segment of retail, bad jobs are not a cost-driven necessity but a choice. And they have proven that the key to breaking the trade-off is a combination of investment in the workforce and operational practices that benefit employees, customers, and the company.” – Zeynep Ton
Employee turnover can be very costly. The cost is increased when the turnover includes physicians and skilled medical professionals. Losing top providers can have effects beyond dollars as it can also affect organizational culture. The best strategy for addressing turnover is to be proactive and develop an engagement policy within your organization. Create an environment where people want to work and never want to leave. To learn more, reserve a free copy of Mo’s latest book Beyond Physician Engagement.