During Hard Times, Nurses Trim Expenses, Focus on Morale

Rebecca Hendren, March 23, 2010

While hospital layoffs are still in the news, a recent nursing leader survey conducted by HealthLeaders Media's parent company, HCPro, Inc., has revealed some bright spots. The survey was a follow up to one conducted in April 2009 and showed an improvement in nurse leaders' outlooks. It also revealed interesting ways nurses pitched in to save their organizations money.

The 2009 Nursing and the Economy survey questioned 163 nursing professionals about how they and their facilities were faring in the recession. The majority, 90.6% of respondents, reported their facilities were feeling the effects of the recession and they were taking cost-cutting measures such as cutting travel expenses, eliminating incentive programs, and laying off nursing staff.

The top three top three cost-cutting methods reported were:

  • Cutting travel expenses (66%)
  • Renegotiating supplies (63%)
  • Cutting education expenses (45%)

Other methods included wage freezes, cutting overtime, and ending 401(k) contributions.

Despite what sounded like dire times, 92% of participants rated nursing staff morale as good or fair. Without surveying staff themselves, we don't know if the nursing leaders were right or fooling themselves. It's probably fair to conclude that many organizations worked hard on employee morale, so we added some questions about that to this year's survey, in addition to the general ones asked in 2009.

The 2010 survey involved 179 nursing professionals regarding the effects of the 2009 economy and whether facilities were still engaged in cost-cutting efforts. The respondents' cost-cutting methods were not much different than those taken in early 2009. In the 2010 survey, respondents revealed nursing worked hard to cut expenses. Two of the most common measures were to renegotiate supply costs and to partner with staff to reduce expenses.

More than 100 respondents reported they were cutting travel expenses in addition to renegotiating supplies, and the third most common method was trimming education expenses (89).

Additional measures facilities took include:

  • Mandatory paid time off for a few days throughout the year
  • Decreasing employee pension contributions
  • Eliminating management and executive board bonuses
  • Not filling vacant positions
  • No longer matching retirement fund (401K)

In 2010, we drilled down to unit expenses and the ways in which nurses trimmed expenditures. Four different options received more than 100 responses:

  • Reducing overtime (135)
  • Staying in-house for training and education (103)
  • Examining practices to reduce waste (109)
  • Leaving vacant positions unfilled (106)

Twenty-six percent of respondents offered fewer continuing education programs, and other popular responses included eliminating agency nurse use and monitoring overtime. Only 2% said they took no additional measures to cut back their units' spending.

Despite all the cost-cutting measures, respondents indicated their facilities are not out of the woods in 2010. Fifty-one percent of participants in the 2010 survey reported their facility was in a better financial state at the beginning of 2009, whereas only 18% said they were in a better financial state at the start of 2010.

But facilities are working hard to keep up nurse morale. The top ways organizations recognized nurses were:

  • Verbal recognition from managers and other leadership (125)
  • Thank-you notes (97)
  • Nominating an employee of the month or similar recognition (88)

In addition, organizations held potluck meals, published thank you letters nurses had received from patients, held Daisy Awards or other nursing excellence awards, and even used small discretionary funds to reward exemplary performance.

Despite the downturn, 74% of participants said their facilities are hiring, and 13% said their facilities have plans to hire within the upcoming months. In addition, while 60% of respondents said their facilities cut travel expenses in 2009, 65% reported they have plans to attend one or two professional conferences in 2010.

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Rebecca Hendren Rebecca Hendren is a senior managing editor at HCPro, Inc. in Danvers, MA. She edits www.StrategiesForNurseManagers.com and manages The Leaders' Lounge blog for nurse managers. Email her at rhendren@hcpro.com.
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