Human Capital Chaos

Posted by on Feb 5, 2016 in The LFT Blog | Comments Off on Human Capital Chaos

Over the past few months we have begun what I might call “strategic” conversations with a couple of hospitals about addressing their recruiting challenges. One of the hospitals has over 500 vacant positions; the other slightly more than 1,000. It is clear that their current models (staffing, tools, etc. provided to HR) aren’t going to ever allow them to catch up.

From my perspective, this situation of perpetually being short-staffed is common to many (most?) hospital organizations. The demands on the HR recruiting function most often far exceed their capacity to deliver. Each person can only do so much. And the result can be a sort of human capital chaos. Here, for example, are real life experiences at LFT that come from hospitals trying to fill too many positions with only a handful of talent recruiters. We sign agreements for searches on a Thursday that are a “rush” to get done, only to be cancelled on Monday. Or “critical” searches where no one from the hospital returns our emails or calls for two months after paying us to launch the search. We have searches where after a few months and being down to the finalists, an internal candidate who has worked at the hospital for 20 years is deemed to be the perfect solution. We have been told that we are providing great candidates far too quickly. Really? And, of course, we have been told that search firms are too expensive or far too expensive.

At the core of this human capital chaos, I think, is that most hospitals don’t know if they are spending the appropriate amount of energy, money, or emotion finding talent. And, as a result, they make sub-optimal investment decisions. The HR department is a cost center. So each year a budget is established based upon what it cost the year before. No one really has an idea if it’s the right amount since the department doesn’t directly generate any revenues. The department pays subscription fees for LinkedIn or Indeed. Or maybe hires a search firm after unsuccessfully searching to fill a position for 3 to 6 months.

A recommendation I have made to clients is to calculate the profit contribution lost each day a key day-to-day leadership position is either empty or filled with an underperforming person. It’s not a difficult calculation. What is discovered is that if a hospital does one fewer surgery per day because it has either a weak or no Periop Director, it likely takes less than a day to break even on the cost of a recruiting subscription if that’s what it takes to fill the position. Or a week to break even on the cost of a recruiting firm. Or three weeks on an additional internal recruiter in HR. How many hospitals have such immediate investment payoff opportunities? And even if I am off by a factor of three or five or ten, it is still a pretty easy decision. Then the organization might have a far better idea when the resources being invested in recruiting talent are right. And it will likely make a lot more money and have far fewer headaches.

Food for thought anyway.

Bill Haylon
CEO

P.S. We have added EPIC Implementation Managers and System Analysts to the portfolio of interim staffing assistance we provide!