The Cost of a Single Unfilled Position

Posted by on Feb 22, 2017 in The LFT Blog | Comments Off on The Cost of a Single Unfilled Position

By Bill Haylon, CEO

The number one issue that always presents itself when discussing hiring needs and staffing with hospitals is cost. Hospitals are facing budget shortages, and recruiting the right personnel is an expensive proposition.

But, many people we speak with are only focusing on the upfront hiring costs and not factoring in the revenue that filling a single position might drive.

Take for example one of our most searched areas of the hospital – periop leadership. The operating room (OR) typically accounts for more than 40 percent of a hospital’s revenue. Given that, a single week without the required leadership could cost hospitals dearly.

Merritt Hawkins 2016 Physician Inpatient/Outpatient Revenue Survey looks at the net revenue that 18 different types of physicians generate on average for their affiliated hospitals. For all specialties the average is $1,560,688, up from $1,448,136 when the survey was last conducted in 2013. The highest revenue generating specialty tracked is orthopedic surgery at an annual average of $2,746,605.

Consider that for a moment – if a hospital is without periop leadership, its highest revenue generators (the surgeons) are being limited and its costing the hospital tens of thousands of dollars each week. In simpler terms, if a hospital is able to perform one more surgery by filling a periop leadership position more quickly, it’s already realizing a positive return on investment by filling the position.

The numbers game is not getting any kinder for hospitals. Roughly one-quarter of periop directors will retire within the next five years. The vast majority of hospitals do not have a transition plan in place for when the periop director leaves. Though painful now, in 5 years this shortage will become a crisis.

For a Human Resources (HR) department, these positions are increasingly difficult to fill. The healthcare unemployment rate hit 2.6 percent in January, the lowest level in nearly nine years. Candidates for these positions are in demand, and hospitals need a smart, efficient strategy in place to find the right candidates and avoid losing critical revenue.

The current human capital strategy for most hospitals is that they wait for the person to give notice and then rely on HR to fill the position. This typically proves unsuccessful and after several months of frustration and thousands in lost revenue, HR will hire a search firm to fill the position within a few months.

In the end, it’s a 6-12 month cycle that will invariably recur just a few years later when the current hire moves on to a higher position.

Given the revenue that is at stake, it’s imperative that hospitals integrate a plan to proactively help deal with these open positions.

Find out more about how an expert interim staffing firm can help you deal with these hard-to-fill positions that are costing your hospital valuable revenue.