3 factors that will tank your workforce management

“No more overtime will be approved!” How many times have we heard declarations like this in an attempt to control labor costs? Considering that labor costs are a hospital’s largest expense exceeding 50% of their operating budgets, it’s no wonder that remarks like this are frequently heard. Healthcare providers have spent millions of dollars on analytics and other systems to find a way to get these costs under control. Yet, they still do not have clear insights into their labor costs and are unable to implement sustainable programs to manage and control costs. I’m going to look at three areas that limit a healthcare provider’s ability to manage their workforce in a way that optimizes labor, controls costs and drives outcomes.

1. Transactional-focused workforce management (WFM) strategy. When asked, “What is your workforce management strategy?” Senior management offers a variety of responses, typically, there are various WFM initiatives in lieu of a strategy. These are usually tactical measures designed to force accountability onto managers, such as overtime variance justifications.

Senior managers want their frontline managers armed with the tools to make proactive labor decisions that take into account cost and ensure properly credentialed caregivers are assigned. They also want visibility into root causes of labor cost drivers. Current systems fail in their ability to deliver on this.

WFM in many hospitals focuses on the transactional processes of collecting time punches, paying employees, posting schedules, and generating reports. The systems that enable the processes were initially installed to perform these obviously important functions. As a result, business intelligence information is limited and has forced organizations to develop alternative ways to get at the data they need to operate efficiently.

2. Lack of compliance. Lack of compliance is perhaps the most significant factor impacting accurate workforce data. Organizations assume that procedures are being followed by employees when they punch in and out, by managers when they process timecards, by scheduling coordinators when they staff nursing units, and so on. Organizations also assume that their software applications are enforcing compliance. It isn’t until they are fined for a wage and hour violation or there’s an accident that compliance becomes a priority.

Let me outline two compliance scenarios:

• The department manager states there is no overtime in his or her department, but the manager deletes overtime from the timecard or changes it to regular pay.

• Time and attendance not calculating time based on policies. This can happen for a couple reasons, such as during implementation of a time system, department pay practices were not corrected and the system was configured based on previous practices. The second is that new policies were put in place but the system wasn’t updated.

It is easy to see that compliance has a direct impact on the accuracy of workforce data. This has a significant impact on the organization’s ability to manage labor and its costs. It also puts the organization at significant financial risk of incurring penalties and fines.

3. Lack of Tools. Hospital managers face labor and staffing issues every day and lack functional tools to help them make decisions. Who is working? Are there open shifts? Who is available to work? What are the cost implications of my decisions? The information they need to make these decisions often remains buried within a variety of reports that are backwards looking, and provide little insight into the impact of future decisions. Additionally, compliance reports are virtually non-existent.

Shifting to a patient-centered WFM strategy

To remain competitive, provider organizations need to move to a patient-centered workforce management strategy that optimizes an organization’s workforce to improve performance and patient outcomes.

A patient-centered workforce management strategy focuses on the patient experience. It recognizes that each patient has unique care needs and assigns a care giver based on who can meet those needs based on their skills and experience. Talent management and human capital management strategies are inputs into the strategy and ensure that the organization has the right skill and experience mix to meet patient demand.

Workforce management systems such as time and attendance, scheduling and care workloads, are systems that must be designed and implemented with the desired patient care and operational outcomes in mind. An effective patient-centered workforce management strategy is built upon a solid transactional, compliance and management tool foundation. A well-executed patient centered workforce management strategy can be a competitive advantage that drives organizational effectiveness, operational efficiencies, and measurable outcomes.