A once-in-a-generation transition is happening at a hospital near you: registered nurse (RN) turnover has reached an all-time high. In 2015 alone, 17.2% of all RNs left their roles, either for retirement, a different role, or a career change—a 53% relative increase over the 2011 turnover rate.1 High turnover is putting pressure on healthcare providers to improve their RN recruitment and retention strategies so they can ensure having the right team at the point of care while managing overall costs.
This issue should be at the top of any provider’s agenda. Nurses are the largest component of the clinical workforce, outnumbering physicians four to one.2 The cost of replacing one RN who leaves is estimated to be between $38,000 and $58,000.3 However, several emerging trends make nursing turnover especially challenging for providers to address:
- A new generation. Almost one-third of the RN workforce will reach retirement age within the next decade.4 A high proportion of nurses have already retired, leaving a workforce that is much younger (often “millennial”) and less experienced, and having different expectations than older nurses. For instance, younger RNs may value the flexibility to take unpaid leave or career advancement opportunities more than pensions or rich healthcare benefits.
- Opportunities expanding. Today’s RNs can choose from a broad range of career options across administrative roles and care settings (e.g., ambulatory surgical centers, home health, retail clinics, and healthcare technology firms).
- Patient demand. An aging population and the growing prevalence of chronic disease are increasing overall demand for healthcare, putting pressure on providers to hire nurses rapidly, train them to address the needs of patients with multiple chronic conditions, and retain them long enough to keep pace with patient demand.
- Regulation. Fourteen states currently have regulations governing RN-to-patient ratios. The American Nurses Association is pushing for these measures to be adopted more widely.
- Geography. RNs are unevenly distributed across the country; some states have twice the per-capita supply of RNs as others (e.g., Massachusetts has about 1,250 RNs per 100,000 people, but California has only 700). Shortages at the bedside, while far from ubiquitous, are real in some local markets.
Although providers have limited ability to control or manage the first three challenges, they can develop more effective strategic responses if they better understand how those forces are at play in a particular market. Getting to facts, rather than relying on anecdote and hearsay, is key. The last two challenges are ones that providers can—and should—get ahead of in their markets.
What it takes to succeed
We have found that the providers most effective at retaining top RN talent and managing a consistent, motivated workforce share these traits:
- They understand local realities. Effective providers ask themselves: Is there a nursing shortage in our area? How does our base wage and total compensation compare with what is being offered in the market for different nursing specialties? What is the true total cost of a productive labor hour—and an hour of overtime? Does our labor mix reflect our market and our needs? What makes us stand out from our competitors? These questions aren’t always easy to answer. The right answers are based on data and grounded in an accurate understanding of the local market and the factors within it that may (or may not) be influencing RN hiring and retention.
- They create environments where RNs want to work. Effective providers also analyze the causes of nursing turnover that are specific to their facility, identify opportunities to improve, and develop targeted strategies to create environments that appeal to today’s RNs. For example, they may develop robust shared governance councils for RNs, create new mentorship programs to support early-career nurses, or offer flexible leave policies to make it easier for nurses to meet life demands at different stages of their careers. At these facilities, leadership is personally engaged in creating a great environment for RNs.
- They adapt. Change is a constant for providers—a new facility opens down the street, a new regulation is put in place, or new technologies become available. Patient volumes and needs shift over time, as do the needs of new generations of nurses. Effective providers recognize the impact these trends can have on their workforce and stay in front of the adoption curve They adapt their staffing models to ensure nurses are practicing at the top of their license (i.e., the nurses are delivering high-end patient care, not performing tasks that could be undertaken by a nursing assistant).
- They ensure that data-driven feedback loops are in place to quickly identify changes over time and then respond with innovative programs. For example, they create opportunities for growth and development that keep nurses excited about career advancement, bolster nursing teams with lower-cost support staff, and ensure that incentives remain relevant for a shifting workforce. In addition, they embrace new technologies that decrease nursing requirements and involve nurses in purchasing decisions about those technologies.
A strong nursing workforce strategy offers several critical benefits to providers. For example, it can lower costs by improving retention and decreasing the use of premium pay, contract labor, and expensive spur-of-the-moment recruitment efforts. Furthermore, higher levels of RN satisfaction have been shown to correlate with increased patient satisfaction5 —a win for patients, nurses, and hospitals alike.
The authors would like to thank Benjamin Bechtolsheim, Elizabeth Larsen, and Ellen Rosen for their contributions to this article.