CFOs are getting creative when it comes to retaining talent, succession planning, and maintaining the overall financial health of their organizations.
Labor shortages, diminished margins, accelerating expenses, and leadership vacancies: A perfect storm of factors is pressing financial leaders to employ meticulous strategies to rein in costs while creatively thinking about building a sustainable workforce.
Meeting true staffing needs requires a steely focus on workforce governance basics. CFOs are relying more on data to forecast tomorrow's workload and plan for longer-term flexing staff-to-volume. Hiring for new positions is under greater scrutiny, while staff is being downsized when needed and technology investments are reducing the need for FTEs. But while current shortages are commanding attention, leaders must also plan for future viability by attracting, growing, and retaining talent.
The June 15, 2022, Healthcare Workforce of the Future virtual panel brought together three chief financial officers at leading healthcare systems to share their approaches for overcoming the fiscal demands of staffing in a post-pandemic world.
- Prioritize labor management
To counteract diminishing margins, financial leaders are concentrating on streamlining labor costs through keener portfolio management, strong governance models, daily productivity monitoring, budgeting, and prioritizing nurse staffing.
"We're looking at all the overhead departments throughout the system, employing benchmarking standards and reassessing prior decisions," says Mike Browning, SVP and CFO at OhioHealth in Columbus, Ohio.
"We need a transformation team and an innovation team to answer the question, 'Do we need to be that large?' " he says. "We're double-checking decisions we've made in the past. When times are good, we keep adding things. Now we're asking, are we creating value for what we need in the future?"
To trim costs, Northwell Health is applying automation in the revenue cycle space to eliminate or avoid adding FTEs.
"A number of repetitive tasks have been automated and that has created the need for a new technical workforce to manage that work," says Michele Cusack, SVP and CFO at Northwell Health in New Hyde Park, New York. "Our largest area of success with RPA has been in revenue cycle, but we're trying to replicate the success in other functional areas as well using various technology platforms to further optimize workflow and putting tools in place to mitigate the need for manual work efforts"
"We're looking at clinical staffing models to figure out a way to predict staffing based on historical information—trying to understand the seasonality of some utilization patterns, whether it's the ED or certain medicine volumes or particular geographies. The goal is to put tools in schedulers' hands to help optimize scheduling for nurse staffing" says Cusack.
OhioHealth has established a singular committee, which has over each site and each business unit it monitors.
"We try to do it similarly in all areas to ensure there's consistency throughout the system and that helps us understand where vacancies are and which we need to fill, whether it's clinical or not," says Browning. "The team sets guidelines, and we try to adhere the best we can throughout the system. "
Mayo Clinic, headquartered in Rochester, Minnesota, is undergoing a major technology upgrade to provide managers and leaders with the best choices as to who's available next and managing to demand.
"We’re months away from deploying these tools but the build is focused on predictive modeling so we can get closer to staffing on-demand," says Dennis Dahlen, CFO at Mayo Clinic.
Finance teams are working hard to support the challenges presented by the nursing crisis that is distressing health systems.
"I agree with our nursing leadership that we have to find a different staffing model," says Dahlen. "It has to be something besides an all-RN model because the math on workforce availability just doesn't support that model.
"I give our nursing leadership colleagues high marks, as they are innovating and trying to figure out what the new model is from both the compensation and benefit standpoint and scheduling, and how to organize this by providing more choice," he says. "I think there's good work going on here, reinforced by the imperative that current circumstances have created."
- Cultivate a pipeline for talent
Attrition within leadership across the industry has been pervasive, so CFOs are doubling down on succession planning to discourage talented staff from jumping to new opportunities outside the organization.
"Given our size and scale, succession planning has always been a focus," says Cusack. "So, we have developed several management and leadership development programs to create a pipeline of successors at any level to ensure successful leadership transitions. We also have designed a benefits package that incentivizes staff to stay."
As an academic medical system, Mayo Clinic offers lifelong learning and career advancement, in which succession planning plays a significant role.
"We have a well-defined succession model [which involves] a mandatory rotational leadership design element," says Dahlen. "Nobody stays in a leadership position for long periods of time, more likely moving every seven to 10 years to round out their experience and abilities. The premise is offering a career for a lifetime: Our core workforce design is to hire people young and keep them engaged by giving them responsibilities, continuing to increase their compensation, and providing an industry-leading retirement plan."
While current shortages are demanding short-term focus, senior leaders realize the need to create a pipeline of candidates to foster a continuous flow of talent for different positions. Organizations are investing in high school programs to expose students to the variety of careers within the industry, as well as supporting nursing education to increase the number entering the profession.
"We can't neglect the pipeline," says Dahlen, citing 92,000 nurse applicants unable to attend nursing schools last year due to a lack of faculty. "I've been on a bit of a crusade about this. We should never ignore the supply side and how to use nurses best.
"These are great jobs," he says. "A nursing license is a key to the middle class. The industry is very nearly recession-proof. We're a staple good for consumers, not a discretionary spend, so all those factors work in our favor. So why aren't [healthcare organizations] going into high schools, communities of color, or wherever there are qualified candidates? We've got to increase the width of the pipeline. That's going to require all of us as health systems to lean in on this."
Northwell is targeting underserved communities to help people navigate a path forward.
"We've been very thoughtful about confronting the roadblocks that are preventing individuals living in typically underserved communities from entering the marketplace," says Cusack. "We're targeting the high school level, partnering with 12 local high schools and helping their students navigate the barriers keeping them from furthering their education. The program offers them transportation, food, books, and scholarships.
"In addition, we've created our own nursing school, which creates a pipeline of new workers for the System," she says. "And we entice them to stay with us through loan forgiveness."
Growing talent is another way leaders are attracting workers to their organization.
"Healthcare is a great training ground," says Browning. "We're bringing people from other industries into lower-level positions, such as scheduling and call centers, and over time they take on other roles within the organization and tend to move up. We have a strong educational reimbursement program, so a lot of people come to our organization to get their degrees and often get promoted from within.
"It's a tremendous opportunity for people wanting to move up in their career and it doesn't have to be on the clinical side," he says. "I tell people to get into healthcare, see what you like, discover what you excel at, and develop that further."
- Embrace a modern workforce
As younger and more diverse generations make up the workforce, employers are recognizing the different needs, wants, and expectations to attract and retain workers. Benefit packages must accommodate a new generation by being more family-oriented, more flexible, and meeting other priorities and desires.
Mayo Clinic is tapping an external firm to conduct internal and external surveys to determine trends and what would draw future employees to its system. Survey results will help them craft new designs with choices for benefits and fund the things that are most valuable to people.
"Can you repurpose some of the benefit load to meet the individuals' or cohorts' or professional strata's [preferences]?" says Dahlen. "We believe we can and we're working on that."
Northwell offers a 'returnship' program to bring back those who have left the workforce for a time to care for children or a parent. The organization provides resources to acclimate them to today's healthcare.
"We've had success in the finance areas," says Cusack. "They might not always have a two-year degree, but they often have the critical thinking skills, experience, background, and understanding to be a top performer."
"For those who have participated in [the program], the results have been positive. We recognize they may have another 10- to 15-year career within Northwell, so we give them the support and investment they need," she says.
Health systems have learned how to accommodate virtual workers as many employees shifted to a permanent work-from-home situation. To adopt this new structure, financial leaders are having to determine an equitable price point for all locations, address taxation issues per state, and work with human resources to find solutions.
"Our analysis shows that an out-of-state worker cost us $10,000 or more, so we looked at which states were 'friendly' and which ones we wanted to participate in," says Browning. "We've hired workers for special roles in six or seven states.
"Remote workers have opened doors as to where we can go and what we can do, and then we can outsource certain roles that are hard to find," says Browning. "We're even looking off-shore to find talent that's hard to source in the U.S. But going out of the country is not easy. There are a lot of restrictions and cybersecurity issues, so we're having to do this in a very thoughtful way."
Since Mayo conducts business in all 50 states, the organization has experience in working through special issues.
With taxation and other financial hurdles posing problems in some locations, Mayo decided to constrain where it hires remote workers, apart from highly sought-after tech employees and high-end data scientists.
Lastly, as poor management is often cited as the main reason for employees leaving, organizations are focusing on developing leaders to be able to guide more effectively, think creatively, and escalate problems quickly to address staff concerns.
"We've been providing our managers with communication tools and tips for managing and engaging remote team members, as well as giving them tips on best practices for onboarding team members in a remote environment. We also provide team-building ideas that foster collaboration and a positive experience, since we want to ensure leaders have the proper tools [to be successful managers]," says Cusack.
"You have to have metrics," says Dahlen. "We conduct annual and semi-annual staff surveys and look for trends, such as negative staff survey responses. Then we have coaches work with leaders to achieve an acceptable level of performance.
"In addition, we have a compliance hotline for employees to report HR issues," he says. "Like most hotlines, it is a portal used by employees to report leadership issues, which take active management to address."
OhioHealth has upped its management training by identifying underlying issues and providing enhanced leadership training.
"Historically, you could let poor performance slide for a while," says Browning. "But with the way staffing is today, no one can afford to do that. As leaders, we need to make sure we're giving our people all the tools and resources they need to manage."
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Julie Auton is the leadership programs editor for HealthLeaders.
- Disciplined workforce governance practices are more critical than ever for managing staff.
- While today's shortages demand attention, leaders need to plan for a steady flow of talent down the road.
- Keeping a solid employee base will depend on recognizing a new workforce with different needs and interests and training managers to be more effective.