With the workforce accounting for 54.2% of operating expenses, utilizing up-to-date workforce technologies to manage and optimize staffing makes fiscal sense. But, those benefits should extend beyond the budget. Research has shown that changes in technology may allow for substantial improvements in the use of nurses’ time and the delivery of safe patient care. In addition to helping nurses increase their daily effectiveness, workforce management technology can also help manage broader job satisfaction.
Technology that enables staff satisfaction and workforce optimization can lead to better outcomes. However, different disciplines across the health system can have widely different strategies to reach that goal. For example, finance is focused on labor cost containment, patient outcomes are the priority for clinicians, and the operations team is looking at how to improve productivity. Those strategies can either complement or compete with one another. An overarching strategy that relies on analytics to drive decisions can help ensure that everyone within the health system is working collaboratively rather than in disconnected silos.
For example, solutions that harness analytics to match nurses and patients based on staff skills and preferences, patient care needs and budget constraints allow the organization to effectively flex the workforce. Nurse workloads are more balanced, and that can be a satisfier for both nurses and their patients.
Research has shown that providing nurses with control over their work schedule can enhance their sense of control and predictability, as well as improve the quality of work life. For example, labor cost containment can be achieved by more effectively utilizing internal staffing resources through tactics that engage front-line staff in the process of filling open shifts. Data transparency gives employees the ability to view open shifts that they are qualified to work, providing them with the opportunity to voluntarily pick up an available shift and eliminating the need for the organization to incur costly premium labor or overtime expenses. With this collaborative staffing approach, patient care needs are met, nurses achieve a better work-life balance and labor costs are contained.
The benefits of a work-life balance extend beyond nurse satisfaction, and unmanaged overtime is a critical issue. However, for many hospitals, nursing overtime is the rule, not the exception. According to industry surveys, more than 50% of full-time nurses work an average of 7 hours of overtime each week. When left unchecked, 41% of a hospital’s nurses may work overtime. That’s not only an expensive proposition, but makes it difficult for nurses to have a work-life balance. Accounting for up to 7-10% of total worked hours, nurse overtime for a 300-bed hospital can cost some $3.7 million annually.
Nurses that work too much overtime can suffer from fatigue and stress that can result in serious, expensive medical errors, such as an increased risk of patient falls and hospital-acquired infections and an increased likelihood of medication errors. With experts estimating an astonishing 400,000 deaths caused by medical errors each year and the cost of medical errors topping $17 billion annually, reducing the number of medical errors is a clear priority for an industry focused on patient outcomes and quality of care.
Eliminating overtime completely may be unrealistic, but C-suite executives should question what amount of overtime is acceptable. For comparison, consider from an industry perspective that the 30th percentile performers average roughly 2.5% of overtime as a percentage of total work hours.
So where do we go from here? First and foremost, health systems need to take a collaborative team approach that uses analytics to drive data-driven staffing decisions. Recognizing the importance of staff satisfaction and leveraging the power of an engaged workforce helps ensure the organization can achieve the clinical, financial and operational goals they are seeking.
 Becker’s Healthcare. 10 Statistics on Hospital Labor Costs as a Percentage of Operating Revenue. Accessed December 10, 2013. http://www.beckershospitalreview.com/finance/10-statistics-on-hospital-labor-costs-as-a-percentage-of-operating-revenue.html
 Hendrich, Ann, et al. “A 36-Hospital Time and Motion Study: How Do Medical-Surgical Nurses Spend Their Time?” The Permanente Journal 2008
 Kilpatrick, K., & Lavoie-Tremblay, M. “Shiftwork: What health care managers need to know. Health Care Manager” 25(2), 160-166.
 Bae, Sung-Heui. “Nursing Overtime: Why, How Much, and Under What Working Conditions?” Nursing Economics, 30, no 2 (March/April 2012): pg. 64.
 Sage Growth Partners Analysis.
 Bae, Sung-Heui. “Presence of Mandatory Overtime Regulations and Nurse and Patient Outcomes.” Nursing Economics. March/April 2013: 31, no.2: 59-89.
 Allen, Marshall. “How Many Die from Medical Mistakes in U.S. Hospitals?” ProPublica September 13, 2013. Available at: http://www.propublica.org/article/how-many-die-from-medical-mistakes-in-us-hospitals
 Van Den Bos, et al. “The $17.1 Billion Problem: The Annual Cost of Measureable Medical Errors.” Health Affairs, April 2011, No. 4: 596-603. http://content.healthaffairs.org/content/30/4/596.full.pdf+
 The Advisory Board Company. “Data and Analytics Nursing Productivity Benchmark Generator.” Accessed July 2, 2014. http://fac.advisory.com/2014_B_NUBI_BGFramework/Main/GetSession/?var=917910FF-D016-4149-BB43-DD6666801BC0
Offering incentives to encourage staff to pick up certain hard-to-fill shifts is not a new strategy. However, traditional monetary incentives can be costly and eventually be counter-productive as staff hold out for higher and higher incentives.
Instead, a rewards program can provide cost-effective recognition to engage employees and drive desired behaviors. In fact, we’re now seeing incentive programs taken to a whole new level in healthcare to boost productivity, foster teamwork and improve work habits.
Here are some frequently asked questions to provide with some insight into how and why a rewards program can be successful.
Q: Why have a rewards program?
A rewards program can:
- Provide a cost-effective alternative to contingent labor by leveraging internal staff
- Increase employee engagement
- Help attract and retain qualified staff
- Motivate staff to take hard-to-fill shifts
- Encourage desired behaviors, such as perfect attendance, excellent service, committee work
Q: How does a rewards program work?
API Healthcare’s ShiftRewards is one example of a non-monetary rewards program. It is a unique, points-based rewards & recognition program that awards points to employees based on actions and behaviors that the client has defined. For example, employees can be rewarded 1000 points for picking up an extra open shift.
Points are accumulated and redeemed for items such as gift cards, iPads, jewelry and other rewards. An embedded online catalog offers over 3,000 redemption options. In addition, valuable but free redemption options can be offered, such as a premium parking place or picking your dream schedule for the next month.
Q: Besides picking up open shifts, what are some other ways that staff can earn points?
One of the advantages of a reward system is the flexibility and the opportunity to cost-effectively encourage desired behaviors. Staff can earn additional points for things such as volunteering, serving as a preceptor, perfect attendance, leadership awards, meeting accountability standards, obtaining advanced certification and receiving recognition from patients and families.
Q: What are some of the pitfalls of monetary incentives?
Monetary incentives are more of a satisfier than a motivator. The perceived value of monetary incentives diminishes over time and then becomes expected. The feeling of being rewarded is quickly forgotten as the money disappears into the family budget.
Over time, monetary rewards can also create a “hold-out” effect, with staff waiting for the incentive to grow larger as the shift continues to go unfilled and the need for someone to pick it up becomes more urgent.
As the need to increase the value of the rewards continues to grow, a monetary incentives program can quickly become cost-prohibitive.
Q: What are the benefits of a rewards program vs. a monetary incentives program?
Non-monetary rewards offer the following benefits:
- Increased perceived value
- Trophy value increases link between award and employer
- Boosts engagement & retention efforts
- More cost-effective than monetary incentives
- Viewed as a luxury rather than just disappearing into the family budget
- More tangible than incentive dollars
- Creates a feeling of ‘gamification’ as staff work toward a reward
- Redeemed for indulgences seen otherwise as not justifiable
Q: What is the dollar value of the points?
Each client can determine what the value of a point will be. However, to provide a frame of reference, many clients provide reward points valued at about $0.50-$1.00 per hour, which equates to about $4-$12 per shift.
Q: People are smart. Why would they give up premium pay for less valuable points?
Organizations are looking for a way to get rid of shift bonuses, and a non-monetary rewards program is a way to meet in the middle. Or, a rewards program could be used in combination with strategically placed shift incentives.
Q: Is there a tax benefit?
There is not a tax benefit. Even if the reward is non-monetary such as a gift card or merchandise, it is compensatory and therefore taxable. Employers need to track redemptions and tax based on redemptions.
To learn more about API Healthcare’s ShiftRewards program, check out the 20-minute webinar, “Collaborative Staffing: Driving Performance with Rewards & Recognition.”