The Sequel: This Is An Important One To Read

Posted by on Mar 10, 2016 in The LFT Blog | Comments Off on The Sequel: This Is An Important One To Read

We had a great response to February’s “Human Capital Chaos” blog. Lots of comments and even more questions. So this is going to be the sequel. Once again the theme is knowing the economics of key positions.

So how expensive are interims? Once again, it’s not a hard calculation if you think through it properly. Interims cost more per day without question. They get battle pay for living in an apartment or hotel, and away from their family/home. And LFT makes a margin as well (otherwise there would be no more great newsletters).

The average permanent salary of the positions we hire for is $140,000 – rounded off so to make the math simpler. The hospital then pays social security taxes, Medicare taxes, unemployment taxes, health benefits, vacations, sick days and other benefits which run, on average, another 25% above the salary. With interims, the taxes, benefits, etc. are all paid for by LFT (or our competitors). Moreover, the client only pays for days worked. There is no payment for holidays, vacation days, sick days or travel days. Last year, this rate accounted for exactly 8.0% of the potential working days – in other words, the clients paid for, on average, a 4.6 day work week.

Interim Vs Perm_DraftUltimately, for a $140,000 job, the client pays $7,175 per month more for an interim than a permanent employee. This, of course, leads to the question: is this a lot or a little? Think about it. An Interim Director of Revenue Cycle would only have to collect an incremental $7K a month to breakeven on this investment (any good revenue cycle director can do this in his or her sleep). A Director of Case Management would only have to prevent one incremental re-admission to make this pay. Or a Director of Periop generate only one more surgery.

The number one reason interims are hired is because something needs to be fixed. So the threshold for improvement – one more surgery, one fewer readmission – is incredibly low. The other benefit is the potential to have a mutual “road test” between the interim and the client to see if a long term marriage makes sense. Paying $21K for a three month trial for a critical position is really a heck of a deal however you cut it.

LFT believes so passionately in the value interims bring to our client’s organizations that we will be proactively sending out emails with dream team interim candidates available. Look for these emails or contact me if you aren’t getting them and want to be on the distribution list. As you can see, top interim talent in vital roles pays back the investment very quickly.

Bill Haylon