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Three Focus Areas When Fighting Healthcare Employee Turnover
In 2015, Memorial Hermann staff was working feverishly to keep up with demand for healthcare in their growing Houston service area. To accommodate the growth, Memorial Hermann was undergoing four major expansions and had two brand new hospitals under construction. The System’s headcount was growing at 8-9% per year, which translated into a need for nearly 5,500 new employees annually. The push to hire new employees was hindered by the fact that the System had only an 85% organization-wide retention rate, with pockets of turnover at 25% among first-year nurses and in key areas such as the ED, ICU, and OR. Against this backdrop, leadership decided it was imperative that Human Resources (HR) take on the System’s first year retention issues.
HR began this task by studying the System’s turnover data, including the results of recent employee exit surveys. They wanted additional “expert eyes” on the data and asked Memorial Hermann’s HR partners to spend four hours per week studying the information. It took about a year to put their plan together and what began as an HR effort expanded to include all Memorial Hermann CNOs and business advisory leaders. The group concluded that they should focus their efforts in three areas and assigned a team to each initiative.
3 Priorities for Reducing Turnover
1. Competitive Benefits. The exploratory team realized that it had been some time since the corporate benefit package had been reviewed, and the System needed to catch-up in several areas.
2. Career Opportunities. There was a need to focus on growth and development plans for early career nurses.
3. Leadership. Research indicated that leaders were the most important factor in whether employees choose to stay or leave an organization. Many exit interview comments indicated that employees did not feel supported by or had little contact with their leaders. There was an opportunity to better equip managers, help employees connect to Memorial Hermann, and intervene with employees before they felt the pull to leave the organization.
A Closer Look at Benefits
After conducting a thorough market analysis, the team made numerous changes to the System benefit package, including:
- Restructuring their maternity package to make out-of-pocket costs equal to those of competitors.
- Accelerating their 403(b) match to occur in Year 1 rather than Year 3.
- Accruing PTO from Day 1 rather than Day 90.
- Implementing a student loan repayment benefit of $400 per month, up to a maximum of $20,000.
- Right-sizing tuition reimbursement programs to favor the degrees in highest demand.
HR was using corporate benefits to reinforce the message that Memorial Hermann wanted to hire people with all levels of experience and to assure new employees that “You are valued from Day 1.” As might be expected, CFOs in the System were leery of these new expenses. HR boldly promised a 10% reduction in turnover costs during the first year to pay for the benefit changes in the future. HR worked with System finance to establish agreed upon cost of turnover and cost of hire metrics so results could be measured and reported monthly.
Growth and Development of New Nurses
New nurse graduates were an important part of the staffing answer for the future. However, some hospitals were reluctant to take them on due to cost and time to train. The team quickly saw the need to operationalize a 12-month nurse residency program that included intense mentoring and shadowing for new nurse graduates. To minimize impact on individual facilities, costs of the program were centralized in corporate cost centers.
Leadership Training Was Key
HR developed a comprehensive leadership retention program titled “Retention Engine.”and did a corporate road show to ensure that every leader in the System was trained on actions they could take to improve first-year employee retention. HR met with leaders in groups of 10-15. Senior leadership at Memorial Hermann showed their support for these efforts by including turnover as a key metric in the corporate bonus program that impacted everyone at Memorial Hermann who was a manager or higher..
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