Our team of Healthcare Industrial Engineers created this newsletter to share the industry’s best practices with leaders who can apply operational efficiencies in their daily work.
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Contract labor resources are a true asset to healthcare organizations when utilized appropriately and managed well. However, many organizations find it challenging to align contract labor to their staffing needs while controlling overall labor expenses.
High performing organizations quantify anticipated needs for vacancies, leave of absence support, and seasonal workload volume fluctuations while ensuring contract labor is never used inappropriately through attentive management.
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Top Tip: Understand the cost and availability of all labor resources and ensure cost effective options are exhausted prior to submitting contract labor needs for fulfillment.
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Psst...we also recommend reviewing if any contract labor is embedded into your existing staff roster, especially travelers.
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CONTRACT LABOR IN THE NEWS
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When is it a Good Idea to Use Contract Labor?
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Lessons learned in leveraging contract labor and travelers to ensure the right staff are in the right place at the right time to support excellent quality care to patients.
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Reducing Labor Spend: How the Right Data Reveals Seasonal Solutions
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Many healthcare executives are concerned that patient care will suffer when they are challenged to reduce labor costs. However, leaders often overlook opportunities to better align staff with patient workload.
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Quality and cost of travel nursing: Real-world studies refute common misconceptions
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A common perception in the healthcare industry is that travel nurses’ quality of care is lower than staff nurses, while their costs are higher. This belief persists despite a growing body of research showing that it is inaccurate.
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INDUSTRY BEST PRACTICE GUIDE
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1) REVIEW HISTORICAL NEEDS PER MONTH
Determine historical volumes by month - note peak time periods of seasonality based on department type and patient population. Use your productivity target to determine anticipated FTE needs by month that align to these volumes.
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Top Tip: Be sure to take into consideration the pandemic’s impact to historical volume trends to individual departments – particularly in Q2 2020.
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2) COMPARE FTE NEEDS TO CURRENT STAFF ROSTER
This exercise allows you to quantify how many additional resources are expected to be needed per month to support volume. Displaying this information graphically instantly highlights peaks of expected seasonality throughout the year and where the use of contract labor may be anticipated.
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3) QUANTIFY FLEX-UP RESOURCE AVAILABILITY AND REVIEW COST
Next, a review of existing department resources should be completed to identify how many shifts could be comfortably supported with overtime or pool staff, which is more cost effective than contract labor. It can be helpful to review historical overtime utilization to estimate the bandwidth to cover the open shifts.
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4) WORK DIRECTLY WITH STAFF TO UNDERSTAND AVAILABILITY
Engage the department leader to survey full time staff to determine interest in overtime shifts and part time team member desire to flex up to full time in peak volume months. Anticipating expected FMLA or other extended absences is also useful in making the determination for existing available resources.
If a gap of greater than 1 FTE exists for peak months and more cost-effective options are not available to support the workload, securing contract labor is the right option.
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5) REQUEST PREMIUM RESOURCES EARLY
When possible, requests for contract labor should be made six-months in advance, which should allow adequate time for review and approvals internally. In our experience, traveler agencies provide the best candidates when they receive these approved requests at least three-months in advance to support recruiting, sourcing, and job alignment.
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