What healthcare systems need to know before they strike out on their own.
A Three-Part Series (Part THREE)
Healthcare systems are rethinking traditional staffing approaches, now turning towards in-house solutions. The increasing need to reduce costs and the demand for flexibility and autonomy in the workplace have prompted organizations to take recruitment into their own hands. "The move toward internal staffing is a significant step that allows healthcare providers to meet the modern clinician's expectations for flexibility,” says Robert Crowe, EVP, Per Diem and Local Workforce Strategies at Medical Solutions and founder of Matchwell. As internal agencies become more attractive, he advises a thoughtful approach incorporating due diligence and a ‘less is more’ strategy.
In this series' third and final installment, Crowe unpacks the compelling advantages and inherent challenges of internal agencies, underscoring the undeniable rise of workplace flexibility as a driving force in the industry's future.
Q:To start, what exactly is an internal agency?
Robert Crowe: An internal agency is a healthcare system's approach to recruit and retain staff directly, bypassing external agencies. This includes not only rebranding internal float pools but also establishing internal travel programs that strategically move full-time hires between departments or even different buildings for longer-term assignments. Occasionally, healthcare systems invest heavily in their own staffing company.
Q: Why are internal agencies becoming increasingly popular among healthcare organizations?
Crowe: They were first introduced 15 years ago but fell out of favor as healthcare systems realized how much investment it takes to build and sustain one of these internal programs. Now, organizations are crunching the numbers and want to redirect the money spent on travelers to internal programs. More than that, healthcare organizations realize they must have a defined flex work program to attract and retain employees today. Almost every healthcare worker now expects more flexibility and better work-life harmony from just a few years ago due to the growing gig economy and the influences of our modern lifestyle.
Q: What are the benefits and potential drawbacks of incorporating an internal agency?
Crowe: The advantages of offering defined, flexible work programs are significant. Such programs allow us to make it easy for every clinician we touch to work for us, which is critical given the current clinician shortage. When a clinician wants to work for us, we don't have the luxury to say no. Instead, we must ask, ‘How do you want to work for us?’ Whether they want a single shift a week or to work six weeks and then take a month off, we must accommodate them.
However, running an agency has its challenges. It’s a complex and risky operation that requires a dedicated team, a proper budget, and advanced technology. Organizations need to collaborate closely with their legal counsel and HR to stand up and manage various employment categories effectively, particularly when it comes to employees transitioning between different types of work, such as from shift work to a full-time position and back to contract work. Determining who is eligible for benefits, how to compensate flex workers relative to full-time employees, and how to comply with regulations like the Affordable Care Act when flex workers’ hours exceed the benefit eligibility threshold are critical considerations.
Q: What are the key steps to establishing an internal agency in your organization?
Crowe: Most organizations are still in reactionary mode and seeking immediate coverage. Rather than starting with a catchall program, conducting due diligence and defining the specific staffing challenge you face is crucial. For example, losing full-time employees due to a lack of flexible options is a good reason to start a program. Alternatively, an internal program may be ideal if you want to share staff between buildings near one another. Yet, if your goal is to create a per diem float pool for filling last-minute shifts, you'll require a different solution.
You will also need robust technology to onboard and organize staff, post job openings, confirm assignments, handle credentials, and oversee timekeeping. Some scenarios may call for appointing a separate employer of record to avoid adding everyone to your full-time payroll. The landscape has improved significantly from 15 years ago; now, organizations like Matchwell specialize in aiding healthcare systems to develop internal agencies, simplifying what was once a daunting process.
Q:What are your takeaway recommendations for any organization considering starting an internal agency?
Crowe: Embrace flexibility now and consider how these programs might fit into your strategy. As clinicians seek more flexible work options, insisting on only full-time positions means missing out on many who could contribute to your team.
Think of every clinician within a 50-mile radius as part of your potential workforce. Make it straightforward for them to join you, whatever their requirements. The sooner you can offer defined pathways to get them working in your buildings and treating your patients, the better off you will be. Start by addressing your most immediate staffing need and expand later as needed. Be wary of solutions that are too narrow in scope. Remember, most existing technologies were developed with only full-time employees in mind, not a workforce looking for flexibility.
Crowe stresses that the expectation for flexibility in healthcare will only increase. He advises that when searching for a partner to establish an internal agency, it’s crucial to ascertain if they truly understand the needs of the evolving clinical workforce. “The staffing industry has learned a lot by having its fingers on the pulse of what is happening in other industries and how they are embracing flexibility,” he says. “We understand the macro trends and have done everything healthcare systems are now trying to build internally.”
Explore part one and part two of our three-part Q+A series, where we examine the shifting trends in agency traveler usage and offer insights on the rise of direct staffing platforms.
Rapidly evolving technology is giving healthcare employers what they want: direct access to information and workers
A Three-Part Series (Part TWO)
Direct staffing platforms have seen a significant rise over the past three years, driven initially by the pandemic’s boom in agency-model apps, job boards, and scheduling and staff optimization platforms. Backed by over $1 billion in venture capital (Crunchbase), the technology has dramatically reshaped the staffing industry landscape. Recently, larger staffing companies have introduced more structured platforms, delivering holistic support. Robert Crowe, EVP, Per Diem and Local Workforce Strategies at Medical Solutions and founder of Matchwell, says, “This next frontier offers buyers a choice: they can be hands-on or take a more hands-off approach. It's not one or the other like it was even a year ago.”
In the following discussion, Crowe shares how staffing firms are heavily investing in direct staffing platforms that promise superior clinical vetting and broader access to data and the workforce.
Q:What are direct staffing platforms, and why are organizations choosing to use them?
Robert Crowe: Direct staffing platforms are online portals offering employers direct access to both full-time and contractual workers. They cater to healthcare organizations by allowing them to directly tap into the pool of professionals they once accessed through traditional agencies. This immediacy empowers employers by speeding up the hiring process, ultimately reducing costs by minimizing excessive back-and-forth communication. Their appeal is rooted in the modern rewiring of consumer behaviors where direct access is the new norm. Healthcare employers want all their information in one place to view their options and determine next steps.
Q: What are a direct staffing platform's benefits and potential drawbacks?
Crowe: Besides ticking the emotional box of how we like to consume, these platforms improve transparency compared to older models. Users get a full view of the clinician’s profile, including their credentials, and talk directly to them. However, this direct approach demands more from employers, making them more active participants in hiring.
A traditional agency does all the legwork, from vetting the candidates to delivering a refined list, which can be extremely valuable. An agency partner will also hold your team accountable for making timely decisions and step in when something goes wrong.
In contrast, using a direct staffing platform requires self-management. Quick decision-making is vital, especially when securing potential hires. Also, these platforms might offer independent contractors (1099 workers) rather than W2 employees, bringing its own challenges. Employers must be vigilant about wage characterization, potential overtime issues, employer taxes, and more. Therefore, reading the terms and conditions and having legal consultation is paramount.
Q: Are direct staffing platforms just a trend, or will they be a lasting change in the industry?
Crowe: They are here to stay, and we're just getting started. Almost all services in America are moving to more direct consumer access, with industries like real estate increasingly providing direct-level access to data through platforms like Zillow® and Realtor.com®. Direct staffing platforms have matured from scrappy start-ups to more strategic solutions supported by some of the largest legacy staffing companies that offer everything from complete transparency to white-glove service and everything in between. This next frontier gives buyers a choice: they can be hands-on or take a more hands-off approach. It's not one or the other like it was even a year ago. It's reminiscent of airlines providing flyers direct access to flight bookings while guiding them through that process.
Q: What recommendations would you have for an organization considering a direct staffing platform?
Crowe: Sifting through the noise is crucial with the market teeming with choices. Numerous vendors have sprung up with apps or platforms, making understanding their offerings and limitations vital. Identifying potential risks is critical. For instance, take the time to understand the implications and costs associated with transitioning an independent contractor to a W2 employee from your platform. Also, if you plan to partner with just one or two platforms, prioritize those that allow you to maximize their value instead of spreading thinly across multiple platforms.
Crowe envisions rapid advancements in direct staffing platforms in the near future, including increased consolidation and greater clinician engagement. “I anticipate healthcare systems will move quickly to a single log-in with every clinician in America having a platform profile. “It's an exciting time. As we edge closer to 2024-2025 and beyond, platforms offering an ecosystem of support, rather than singular functions, will seamlessly fit into many healthcare system operating models.”
Part three of our Q+A series examines why internal agencies are all the rage.
With demand moderating for travel staff, flexibility emerges as the new imperative for healthcare systems
A Three-Part Series (Part One)
With the COVID-19 pandemic’s intensity subsiding, noticeable shifts in healthcare staffing are evident: One standout trend is a decreasing use of agency travelers as healthcare systems increasingly favor full-time employment, bonuses, and competitive pay. However, amid the growing gig economy, many healthcare professionals remain drawn to the flexibility and freedom staffing agencies offer. “While traveler contracts trend downward, flexibility is becoming the new currency,” observes Robert Crowe, EVP, per diem and local workforce strategies at Medical Solutions and founder of Matchwell.
In this conversation, Crowe discusses evolving traveler trends, emphasizing the vital role of flexibility and autonomy in modern healthcare. He advocates for organizations to incorporate both elements, even in local contracts, to remain competitive and retain top-tier talent.
Q: What trend are you noticing regarding agency traveler numbers?
Crowe: We are quickly approaching a new normal of post-pandemic traveler activity. According to data from Staffing Industry Analysts (SIA), pre-pandemic, about 1.5% of RNs in the U.S. worked as travelers through an agency. At the pandemic’s peak, this number surged to almost 6% of RNs. Now, also based on SIA data, we're seeing a 30% reduction in open travel positions in 2023, indicating that the percentage of RNs working as travelers is stabilizing and will likely settle around 3%. There is a common feeling that healthcare systems moved quickly in 2023 to reduce agency utilization and, in that process, overcorrected. While many systems commendably increased wages for full-time employees during the pandemic, a balanced approach is crucial as healthcare is still recovering from burnout and other challenges.
Q:In terms of traveler utilization, do you think it will ever return to pre-pandemic numbers? If not, why?
Crowe: I don't think the industry will return to the lower pre-pandemic numbers because of the growing appeal of the freelance nation over the last decade. This macro trend significantly influenced our clinical workforce and is here to stay. Many clinicians now prefer flexible work patterns, such as working three months on and one month off or two days a week instead of the traditional three days and two weekends. Yet, the real evolution lies in whether clinicians need to go to an agency to access this flexibility, which is the more exciting part of the industry’s current pivot.
Q:What are more sustainable options for healthcare organizations looking to reassess their traveler workforce?
Crowe: Organizations should establish infrastructures that empower clinicians to balance work demands with personal life. We see systems migrating from traditional scheduling to dynamic models, like shorter eight-hour and six-hour shifts five days a week instead of three, allowing for family time. We are seeing weekends-only shifts and Uber-like float pools where people move around. Our clients are focused on optimizing internal workforces to their fullest, including how best to integrate these different scheduling components, which is a great first step. Furthermore, many healthcare systems are developing internal agencies for their local workforces, enabling clinicians to float between departments for a few weeks up to three months. This move signifies an acceptance of the inherent need for flexibility and a willingness to invest in it.
Q:What underlying motivators of travel nursing can healthcare organizations replicate for their non-traveler workforce?
Crowe: Flexibility stands at the forefront of modern work demands. For organizations to stay competitive, they must also offer attractive compensation packages. However, continually increasing wages to outdo agencies isn’t sustainable. Beyond flexibility and competitive pay, clinicians also yearn to be part of a team and supportive environment. They seek more than transactional employment—they aspire to be part of a mission. Successfully blending flexibility, fair compensation, and a shared purpose will naturally attract and retain staff. Some healthcare systems are even exploring collaborative ventures to pool clinical resources, a testimony to the evolving landscape.
Crowe concludes by emphasizing the critical, nuanced role agency travelers will play in the future of healthcare staffing. “When local supply is lacking, a good use of agency is to import travelers to provide quality patient care,” he says. However, as the reliance on travelers finds its equilibrium, the strategy must evolve. “Travelers are an ideal workforce solution when local supply doesn’t exist, but if someone lives within driving distance of your facility, they should be your primary workforce. Innovative internal staffing programs and technology platforms are pioneering new ways to engage those living close by, ensuring a balance between flexibility and stability.”
Part two of our Q+A series explores the rise of direct staffing platforms.