Ep: 014 The True Cost of Neglecting Team Development in Healthcare

0:00Change agents, welcome back to the number one podcast for leadership. Let's go.

0:23welcome back welcome back welcome back welcome back to bread to lead the podcast that empowers you to unleash your leadership potential and make a lasting impact. I am your beloved host, Dr. Jake Taylor Jacobs, and I am on a mission to help you cultivate the mindset and skills to lead with purpose, authenticity, and heart. Y 'all, I'm excited about this podcast, this specific lesson, because we're going to be talking about something that is near and dear to my heart. So I'm so excited about that. In our previous episodes, we explored various facets of effective leadership from navigating change and cultivating resilience to mastering the art of influence and persuasion.

1:06Today, we're diving deep into the critical issue that's affecting health care organizations across the nation. And yes, I like to leave this marker here. Yes, I'm talking about health care organizations across the nation. However, this is also applicable to industries across all sectors as anyone that knows from episode one that's been following. Dr. Jake has been a part of many sectors and many industries. But yes, I am specifically talking about health care today because that's where I've been of recent. So the information that you're going to be receiving, please take all of the meat and the things that don't apply to you.

1:44You can toss them away. But we're talking about that and the true cost of neglecting team development and the transformative power of investing in your people. Listen, as someone who has worked extensively in staffing and workforce management nationwide, I've witnessed firsthand the challenges that many healthcare organizations face. While temporary staffing services often offer a quick fix, if you will, they're merely just a band-aid for deeper systemic issues. Today, we're going to be peeling back the layers and examining the real costs, both financial and human, of failing to invest in your existing team.

2:27So before we dive in and I got another before we dive in, but before we get to the dive in. I do want to say that Sips Healthcare Solutions is a health care staffing and workforce management firm. And yes, we do offer service items that support health care services through temporary staffing for anything period before, during and after surgery. However, although we do provide amazing professionals that are able to go and plug holes and put a Band-Aid on a boohoo, boo boo. Typically, when we leave organizations, we typically see the same thing. once the band-aid is taken off you know once the hole is plugged when we leave we're taking a band-aid off and we're unplugging the hole again and the problem deep down inside is still rooted and it's still the same this is why we want to ensure that not only are we facilitating those short-term staffing needs that hospitals moving forward understand that we want to partner with partner with them to to fix the root issue which is typically something that's deep down and we'll talk about it longer in the facility.

3:37I mean, longer within this podcast. And if you're newer to the podcast, this is more of a pod class where we engage in thought-provoking information that you can actually apply in your actual life or in your business within your organization, literally applicable today if you wanted to start to implement. But as a firm, we focus on those solutions that can help the health facilities not only operate more efficiently, become more effective, but ensure that there's another front line of leadership that is coming. Because typically within organizations, we see that there's this short end or this short flow or windfall, if you will, of leadership.

4:19There's no succession plan for when the next current leader that we have leaves or when they get tired or when they go on leave. And so we like to work with facilities to be able to execute that. So before we dive in, I do want to emphasize that when we talk about healthcare professionals, we're not just focusing on nurses and physicians. We're talking about the entire ecosystem of healthcare workers, from respiratory therapists, imaging technicians, to physical therapists, pharmacists, environmental services staff, and central sterile processing, surgical techs, all of them that are inclusive of, when we say professional services within healthcare.

4:56We're including laboratory techs. We're including occupational therapists, speech language pathologists, radiology techs. We're considering the crucial roles of surgical technologists, dieticians, and medical assistants. Each role is vital in providing comprehensive, high-quality patient care, and each deserves our attention when it comes to development and investment. So let's start by painting a comprehensive picture of the current landscape in health care workforce management. The first picture that I want to create in focusing on is the reliance on temporary staffing. Many health care organizations have become increasingly dependent on temp staffing solutions to fill their gaps in workforce.

5:43While this can provide a short-term relief, it often leads to a host of long-term problems. And I like to use this as an example. Imagine having a temporary parent. You're lacking a parent. And then somebody comes in, fills that hole of being a parent, but they're only on a 13, 26, or 52 week. and then you got all this commitment and built around this one parent and this and this love for this one parent that now decides based on when the contract ends they can leave now the whole of not having a parent is now worse because now we have somebody that was great that is now left and now we still have this hole again and not only do we have the hole now we have a hole that's now uh depicted upon us having a great solution that then left our life this is what this temp solution brings over and over again.

6:40And this is why there's always a clash between organizations that have longstanding staff versus organizations that have temp staffing that comes in and out. The longstanding staff will always fight with the temp staff because they're like, hey, you're not going to be here longer anyway. So whatever you're implementing, by the time you leave, we're going to be back doing the things that we've done. That's why healthcare facilities have to spend more time and cultivating the talent that are between those walls. And this is typically the type of service and type of solution that we provide. We like that leadership development.

7:12We like curating the workforce management with our solutions so that we can ensure the productivity, the growth, the continuity of all of the hospital's goals to be reached with or without us being present. Now, I do believe that there is a need for short term staffing. Absolutely. Absolutely. Overage flow, things that you couldn't account for. We're always there as a solution, but we want to start working with firms like ours that will be there in the long interim, not just an interim phase, but the long term aspect of the facility to ensure that not only are the holes being filled, but they're being filled with people that are committed to the same mission that was there prior to there even being a need for attempt staffing.

7:54So these things are important. I did want to bring that out because although we do offer amazing short term staffing to be able to ensure from leadership all the way down to tech ones within facilities. We also want to ensure that all of the facilities that we work with have understood and they understand that not only are we filling those gaps, we're also interested in providing those services to ensure the people that are there physically that are going to be there long term have the tools and the skills that they need that eventually the need for short term staffing won't be as much of a dependency.

8:32workforce dependency for the hospital system. So there was a study done by the American Hospital Association found and it found that the use of contract labor in hospitals increased by 132 % from 2019 to 2022.

8:53So this is during the time of COVID and this is why I talk about leadership in the great post pandemic because now you have all of these professionals in healthcare if you will that were exposed to travel staffing and they're used to that travel income so it's hard to kind of reel them back in back to reality that says hey the pandemic is gone we have to revert back to what it once was and the issue that is having is now you have these travel talented people the people that you know consultants that travel they did all these things that now they're saying hey if the hospital had the budget to pay us traveling now they have the budget that they can pay us um if we decided to stay domestic or stay local the issue with that is a lot of the hospitals received extra funding during the pandemic from the government that probably isn't going to be there moving forward so now the hospitals have to revert back to what the normal budget was, but there is an increase in the expectation that these contract labor or the short-term surge will stay at the level that it was.

10:07So we're dealing with this battle of this post-pandemic flow. Let's talk about the financial impact. Temporary staffing typically costs 50 to 100 percent more than permanent employees. This premium can quickly strain budgets, especially for smaller or rural health care facilities. For instance, a study by the National Association of Travel Health Care Organizations found that travel nurses can cost hospitals between five to ten thousand per week. Compared to the average salary of fifteen hundred to two thousand for a staff nurse per week. Continue a continuity of care. Frequent turnover of temporary staff can disrupt the continuity of patient care.

10:47A study in the Journal of Healthcare Management found that higher use of temporary staff was associated with longer patient stays and increased readmission rates. This isn't just a problem for nursing, though. It affects all health care professionals. For example, there's a study done by the American Journal of Healthcare Systems, System for Pharmacy. It found that the use of temporary pharmacists was associated with higher rates of medication errors when people aren't really vested in the location of the hospital or the system. It's kind of hard for them to care about the cost and errors because if they make a mistake, they go to another staffing company, get staffed and continue to make the money.

11:33So it became to be a more of a money grab than it was actually caring about the hospital moving forward and also the true patient care within the facilities. We got to talk about team cohesion The constant influx of new temporary staff can make it challenging to build cohesive teams This lack of team stability can lead to communication breakdowns Decrease efficiency and potential safety risk And there's a survey by the American Society of Radiology Technologists That found that 68 % of radiology departments using temporary staff reported challenges in maintaining team cohesion in consistent protocols.

12:13So when there's always this revolving door, now I'm not talking about the natural order of attrition. What I'm saying is that when leadership itself is moving every one or two years, it is not good for the organization nor the hospital system, you know, on a concurrent or on a continued basis. The fourth with the issue with temporary staffing I know you're like Dr. Jake If your company services hospitals with temporary staffing Why are you talking about all of the drawbacks of temporary staffing? Because yes, we offer staffing, but we're also workforce management So all solutions that provide for the departments within perioperative services to be more efficient, to operate better, to be executed.

13:05Those are the staples that continue for us to have relationships with hospitals. The staffing component is to plug holes, just like going to a doctor. Yes, they can give you medication. Yes, they can give you quick procedures that can solve the problem temporarily. But they really want you to utilize the other service offerings that they have so they can go in and actually fix the issue long term. So it's just depending upon where the hospital is at that moment us talking about long term sustainability When there's a problem that is urgent right now, that's when staffing is important Once we're able to calm the sea and calm the inflammation within the department Now we can talk about long-term solutions that take a little bit more time to actually develop and implement The fourth issue when it comes to temporary staff and its organizational culture Over reliance on temporary staff can erode the sense of shared purpose and commitment that is crucial for a strong organizational culture.

14:05A study in the Journal of Occupational Health Psychology found that health care organizations with a high proportion of temporary staff scored lower on measures of organizational culture and employee engagement. when we're always using temporary staffing for these staples within the organization it's totally different which is usually why when we talk to facilities we say listen I understand the temp staff flow but let us just take over the full department let us help you with getting control over this over a long period elongated period of time so we can ensure that this department is hitting your executive goals so this is when we usually operate under our integrated management.

14:48Hey, let us integrate our philosophies and our systems within your organization long term. Let us see it all the way through versus these short 13, 26 week or 52 week solutions. We're thinking about the long term effect that it has, especially when you have people that are in these departments that have been in the department 10, 15, 20 years, maybe eight years that have never been invested into for their leadership growth. Now you have short term people coming in, they're impressing everybody. Now the person that's going to be there, even when the short term person leaves now feels slighted and not respected because you gave somebody that was a short term fix a little bit more love and praise than the people that have been there that we have failed to invest into.

15:33Number five, when we talk about short term effects, we're talking about training and onboarding costs. While often overlooked, the cost of repeatedly training and onboarding temporary staff can be substantial. A study by Society for Human Resource Management, SHRM, estimated that it costs about$4 ,100,$4 ,129 to hire a new employee. It can take up to 42 days to fill a position. And in healthcare, where specialized skills are often required, these costs and timelines can be even higher. And then lastly, when it comes to services in the over reliance and dependency of it is patient satisfaction.

16:13The use of temporary staff can absolutely impact the patient satisfaction score. A study by the Journal of Nursing Administration found that hospitals with higher use of temporary nursing staffing and lower patient satisfaction scores, the effects isn't limited to nursing. A study by this association found the continuity of care with the same physical therapist was associated to better patient outcomes than a temp. So we want to really focus on, yes, again, temporary staffing is important when there's a high need, but as over time, we have to ensure that we're thinking about the long-term effects that it has on patient care and also continuity within the culture.

17:01The number one thing we focus on when we go within an organization, we look up leadership development, How can we curate all of the leaders to be based on our SIP standard? And the SIP standard of leadership, the SIP leadership standard is a combination of all of the training path, the training pathway that we take a team lead or a supervisor all the way up to their executive understanding and knowledge of truly how to run organization within the health care system. So from learning how to manage their shift to learning how to run a health care system is something that we look at and truly developing within these leaders so that we can ensure the flow, the efficiency and also the execution of things to get done within these organizations.

17:49Now, let's talk about the high cost of turnover. While temporary staffing is often seen as a solution to staffing shortages, it doesn't address the root cause of problems, high turnover rates amongst permanent staff. Let's look at the true cause. So what happens? We have high turnover rates with permanent staff. Right. So this is what this is the cycle of temporary staffing and permanent staff. It goes. The facility says, hey, we need temp staffing for 13, 26 weeks. Until we can hire new people. Hire new people, but there's no true onboarding. There's no true support. There's no true development.

18:29There's no true leadership growth. We're just filling in rows. So now once we have all the rows filled, the temporary staff company leaves. Now you have the full time staff there. They're there without any true implementation of support system, structure, training, continued education, mentorship, anything. Now they're there. Guess what happens now? They leave out. There's another need for temporary staff that comes back in. Now they have to stay longer to clean up all the mess that was done with the permanent staff. And then this cycle happens over every six to 18 months. This is the same cycle within the same facilities within a health care system versus doubling down on the investment and leadership training, a skill set training and all the things that can provide consistent support to the people within the health care systems, identifying who wants to grow and what pathways of leadership that they want to take so we can ensure that every person has their own leadership improvement plan.

19:27We call it a lip. That leadership improvement plan says, hey, what pathway does this person want to take and how can I provide them their own personal pathway of tender love and care to get them to where they need to be. And most managers and directors don't have time to facilitate that, which is typically how we're able to service the facilities that we partner with because we offer not only the system that can help them down their leadership pathway, but we offer them the leadership support that can help guide them to ensure that the talent that we're seeing within our hospital systems actually stay within our hospital systems without leaving and dissipating to go somewhere else.

20:04Okay. Let's talk about the financial cost. According to 2021, the National Healthcare Retention and RN Staffing Report, the average cost of turnover for a hospital-based employees range from$40 ,000 to$64 ,000. For specialty roles, it can skyrocket to over$100 ,000 per employee. So when we consider all healthcare professionals, not just nurses, the cost could be even higher okay so for a pharmacist in order to replace a pharmacist it can cost$72 ,000 in order to replace a diagnostic medical uh sonography um a sonic uh sonographer um can cost$33 ,000 to$48 ,000 in order to replace a physical therapist it can cost up to$98 ,000 so imagine us always replacing these talented people over and over again so think about that cost.

21:01So we always talk about cutting costs in departments, cutting costs in instruments, cutting costs in all the areas versus realizing that the number one cost is labor within the healthcare system. So what can we do to stabilize and sustain this labor? We need to invest in the ability for this labor to get effectively better, to feel supported, to have all the amenities that they need to support the hospital, because whether you want to believe it or not, it is the people that move hospital systems forward. So we can invest into the people getting better. This allows for the hospital to retain top talent longer, which also now lowers the cost of actually hiring replacements when we can actually develop replacements within our career pathway track.

21:46You may find someone that's in central sterile processing that will be great at being a sonographer or be great at being a pharmacist that we can take them down a leadership pathway that will cost less within our organization, but we get more from that person because they're implementing all of the skills that they've learned, the leadership capabilities that they have within the organization long term. And then by the time they become a pharmacist, we've been able to receive benefit of that person being within our system for this time. So I'm a firm believer of getting people into healthcare as soon as possible, even from a tech position as they work their way within a facility because the cost of onboarding that person will be relatively lower than anything else, which is typically what we help organizations with, just ourselves at SIPs Healthcare.

22:33Hey, let us get them in an EVS first and then work them all the way up through it so that we can ensure that that partnership between SIPs and the healthcare system, we're able to groom the person to be within the system longer term, to have the impact that we need. As SIPS, we invest in their education, their training, their development to ensure they have everything that they need. As you as the hospital system, you're the host and the benefactor of all of these development that is happening, providing careers and opportunities of growth so they can become who they want to be in the healthcare system while we're providing the support that we need.

23:06That is typically the type of partnership that we like to see. Number two, lost of institutional knowledge. When experienced staff leave, They also take with them the valuable institutional knowledge and expertise that can't be easily replaced. That's a cost. This is particularly crucial in health care. We're understanding the nuances of specific patient populations, equipment, procedures and even people to talk to. There's a study done by nursing management that found that departments with high turnover rates were more likely to experience knowledge drainage, leading to decreased efficiency, increased risk of errors.

23:43If the people don't know the facility or the institution, it doesn't matter how much or how well they can perform at their job. They're still going to have errors that typically wouldn't be there if there was somebody knowledgeable there. So just this in and out road that it seems like the hospital systems typically have have accepted as the fate of the people's timeline there. What most hospitals fail to realize is that most talented professionals, regardless of industry or sector, stay where they feel most supported. So just providing the support and the training and the development and and being able to do what you can to retain this talent is absolutely critical.

24:24And then here's another thing. We know that salaries matter and your regions matter. So if you are in a region that typically can't go over a certain salary cap or threshold, you have to be doubled down on the training and development that you give and the support that you give to people that are there, knowing that there is going to be a demise in the relationship at some point. But if we can be proactive in that execution, people will leave in a lot better care in passing institutional knowledge down because they know it's a part of that practice that you typically have. Number three, productivity loss.

25:02New employees typically take eight to 12 weeks to reach full productivity, not efficiency or proficiency, full productivity. During this time, there's a significant productivity cost to the organization in health care. This productivity loss can have direct impacts on patient care. A study in the Journal of Advanced Nursing found that units with higher turnover rates had lower productivity scores and higher rates of adverse patient events. So listen, every time we bring in new employees, guess what? Productivity loss. So we need to do whatever we can to invest in the retention of these folk. This is typically when SIPs come in.

25:41Number four, patient satisfaction. High turnover rates have been linked to lower patient satisfaction scores. A study in health care management review found that for every 10 percent increase in turnover, patient satisfaction scores decreased by 2 percent. This effect was observed across various health care professionals, not just nursing. Number five, staff morale. High turnover can create a revolving door mentally, decreasing morale amongst remaining staff and potentially triggering more departures. A survey by American Medical Association found that health care professionals working in high turnover environments reported low job satisfaction and high levels of burnout.

26:30Y 'all, the facts are the facts. If you can't tell, we're going down to facts. Quality care. The New England Journal of Medicine found that hospitals with high turnover rates had higher rates of hospital acquired infections and acquired acquired infections and patient falls. Quality of care. New people. All the time, the same mistakes are happening. The same infections are happening. The same risks are happening to the facility. Recruitment costs. Average cost to hire a health care professional is three grand at minimum. And it could be way higher for specialized roles. Overtime costs. Guess what?

27:13When positions are left unfulfilled due to turnover, guess what happens? The remaining staff often need to work overtime to cover gaps. This not only increases labor costs, but it can also lead to fatigue and burnout amongst staff. A study in the Journal of Nursing Administration found that hospitals with high turnover rates spent 40 percent more on overtime than those with lower turnover rates. So I want you to imagine something. OK, I really do. I want you to imagine what life looks like if we continue to spend so much money on all the things that don't really matter. I really want us to think about that.

28:00I really want us to think about. how much time and money we're spending on all of these gitchy gadgets and technology thinking that if we just add more technology, do you know that adding more technology only creates more risk? Adding more things on to an underdeveloped staff creates more pain and more reasons to be hurt and more reasons to be affected. And more reasons to be drawn to making mistakes. Y 'all, these are all things that not only have to be addressed. These are things that must be addressed. Because there's a lot of facilities that think that the problem is what the problem isn't.

28:54What the problem is, is what the problem isn't. It's the staff. Yes, they have their degrees. Yes, they have their certifications. Yes. But obviously, when you're looking at the overall state of something, you have to start looking at it by the law of averages. And realizing that there's an issue that needs to be solved. And we're an organization that can help solve it.