A recent survey by the American College of Healthcare Executives revealed that workforce issues topped hospital CEOs’ concerns for the second year. The ongoing challenge of staff shortages, nurse turnover, and high vacancy rates continues to increase reliance on costly contract labor, eroding hospital margins and contributing to clinician burnout.
Work preferences are also changing in healthcare. Nurses and other clinicians are prioritizing work-life balance, turning to flexible staffing options and gig opportunities to supplement their income, explore working in new specialties, and tailor their work schedules to personal preferences. As the demand for nursing professionals intensifies, hospitals face a perfect storm that will continue to drive up labor expenses and negatively impact the bottom line if more sustainable solutions aren’t implemented.
Drawing from my experience as a healthcare executive specializing in workforce optimization, below are three strategies hospitals can successfully embrace to develop a more flexible workforce model for the future.
A Unified Workforce Platform for All Employee Types
A single, integrated workforce platform that can manage all worker types ‒ from full-time core staff to flexible workers and contract agency staff ‒ is essential for maximizing the workforce’s full potential and ensuring transparency in resource allocation. These platforms provide centralized management tools that offer visibility across the entire workforce, allowing healthcare organizations to utilize the most cost-effective resources and efficiently manage scheduling, onboarding, credentialing, and performance tracking across all workforce categories.
Flexible workforce platforms give healthcare facilities the technology backbone and tools to optimize staffing strategies, reduce labor costs, and more cost-effectively respond to labor challenges. Health systems can build and strengthen their internal workforce capacity alongside the management of external agency labor on a single, unified platform to identify the best opportunities for labor cost savings, negotiate better pay rates and contract terms, and implement cost-control measures.
Some of the robust capabilities of workforce platforms include the use of advanced algorithms, which can recruit staff with precision for optimal staffing assignments based on skills and qualifications. Additionally, compliance and credentialing features are built in to ensure adherence to regulatory standards, while robust analytics, dashboards, and reporting functionalities play a key role in supporting data-driven decision-making. Communication tools within the platform promote seamless collaboration across departments and facilities, while advanced vendor management features streamline interactions with external staffing agencies to control labor costs.
An In-house Flexible Resource Pool
One of the most cost-effective methods of managing staffing shortages is to build or expand your own internal resource pool of flexible workers who are on the payroll to be used when temporary staff are needed. By giving priority to internal resources and only using more costly external agency resources when necessary, healthcare organizations can realize significant cost savings, often millions in savings per year.
An internal resource pool offers a significant advantage: it attracts the growing number of workers seeking work flexibility and can be key to staff retention. A flexible workforce option not only positions healthcare providers as employers of choice within their communities but enhances their competitiveness for talent in the local market. By offering flexible work arrangements comparable to gig work or staffing agencies, healthcare systems can tap into a valuable local workforce that may include clinicians in between travel assignments, individuals looking for extra income, and people interested in re-entering the workforce.
Although internal float pools are not a new concept, most healthcare organizations do not have the technology infrastructure and support needed to develop internal resource pools at scale. We have seen hospitals face significant challenges trying to manually manage internal pool resources using spreadsheets and phone calls. Manual processes are enormously inefficient, often result in siloed departmental solutions, and impede cost savings efforts due to a lack of transparency of staffing needs across all labor types. Without robust technological support and system-wide visibility, management of an internal resource pool can be a challenging process.
A Vendor Neutral Managed Service Provider for Contract Labor
Another important consideration for labor cost savings is the selection of a managed service provider for any needed contract labor. MSPs provide all services to fill open positions with contingent clinicians from staffing agencies and manage everything from sourcing candidates to credentialing and invoicing. MSPs may be affiliated with a staffing agency or operate independently. Independent MSPs, without any staffing agency affiliation, are considered true vendor-neutral MSPs.
Unfortunately, some MSPs who are affiliated with a staffing agency ‒ which is the type of model used by most healthcare organizations today ‒ may prioritize their own interests over those of health systems by charging above-market rates to maximize profits, representing multiple health systems in the same geographic area, competing with health systems for talent, or charging higher rates or hidden fees in some circumstances.
A vendor-neutral model gives healthcare organizations access to resources across multiple staffing agencies where the volume and quality of candidates is expanded and pricing is transparent to secure the most competitive market rates. As a result, a vendor-neutral MSP is better able to negotiate lower rates as suppliers compete against each other, and there is no fulfillment bias.
Be aware that many MSPs claim to be vendor-neutral when they are actually owned or affiliated with a staffing company. Health system executives must understand and evaluate these important variables when selecting an MSP partner.
Summary
In today’s dynamic healthcare workforce landscape, where labor shortages persist while the gig economy and demand for flexibility are becoming increasingly prevalent, the imperative for health systems is clear: embrace technology-driven workforce solutions that offer visibility, flexibility, and cost-effectiveness to build a more agile and responsive workforce.
About Bruce Springer
Bruce Springer is a dynamic healthcare entrepreneur with 30 years of healthcare IT leadership, sales, marketing, and technology experience. He currently serves as CEO at Prolucent, a workforce optimization software and services company. Previously, Bruce was a co-founder/EVP at WebMD, and served as CEO at Bidshift/Concerro and several other venture capital-backed companies. He serves on the Board of Directors at PatientPoint and has served on more than 20 Boards including API (acquired by GE), OneHealth, and AdvancedMD. He also served as a healthcare advisor for Francisco Partners.