Human Resources ELIZABETH ZIEMBA Taking The Pulse Of Employees Employee surveys show that high staff turnover is often a symptom of management issues such as inconsistent treatment or lack of recognition. left their jobs because of reasons relat- visors, we were able to reduce turnover W HILE SURVEYS OF PATIENTS and family members have ing to “bad managers,” citing issues and improve employee morale by become a common means of such as inconsistent treatment of focusing on issues that our staff identi- gauging customer satisfaction in long employees, lack of communication fied as management problems,” says term care, many providers do not sur- with supervisors, lack of recognition Kain. “The recommendations that vey one of their most valuable con- for employees, limited employee input, came with the survey results gave me a stituencies—their employees. Yet and quality and productivity standards. list of things to do that were immedi- employee satisfaction surveys can be a The study, “Why Healthcare Workers ate and easy to implement. The results valuable tool for reducing costly Quit,” was published January 2003 in came quickly.” turnover while improving both staff JWT Specialized Communications . and patient satisfaction. Understanding the intricacies of the Examining The Costs Typically, employee surveys are com- role managers play in retaining In these days of tight budgets, employ- prised of three to five pages of paper- employees is a key goal of an employee ee surveys may seem like a luxury, with and-pencil questions designed to elicit satisfaction survey. “Satisfaction with the cost of a basic paper-and-pencil information about the perceptions and the manager is the single most reliable survey ranging from $20 to $25 per experiences of employees concerning predictor of whether a health care employee, according to estimates. issues such as hiring and retention, employee will quit,” according to the However, staff turnover is a costly, relationships within the organization, health care workers study. “Employees time-consuming, and troublesome and general satisfaction with the work- may be dissatisfied with many aspects problem for nursing facilities. The place. Questions can touch on issues of their jobs yet still remain in them, direct costs of hiring and training are such as the quality of relationships but when they are dissatisfied with compounded by indirect costs such as with peers, supervisors, management, their managers, they are highly likely low morale and disruption of care, all and owners as they impact job perfor- to quit or be terminated,” the authors of which have a direct impact on the mance and loyalty; commitment of the said. financial bottom line. Employee satis - organization to service excellence; A case in point occur red at faction survey results can be used as a availability of tools and resources to Fairhaven Nursing Home in Lowell, tool for retention. According to some perform job duties; and specific issues Mass., where the facility was facing an calculations, saving one employee from of interest to the particular employer. unusually high turnover rate for certi- leaving can more than pay for the cost A well-drafted employee survey will fied nurse assistants (CNAs). An inde- of the survey itself. pinpoint problem areas within an orga- pendent survey revealed that the inter- In order to understand the costs of nization as well as clarify its strong personal skills exhibited by a superviso- losing employees, providers should points. ry-level staff member were hurting first calculate the facility’s annual employee morale and causing CNAs to turnover rate, then break that down to What Some Surveys Are Finding leave the facility. The intervention that turnover rates for specific high-priority Managers may believe an employee was suggested and implemented was positions such as registered nurses survey is not necessary, incorrectly for Administrator John Kain to provide (RNs) and CNAs (see box, page 44 ). attributing turnover to any number of one-on-one job coaching for the The second key factor in under- issues—especially low salaries. But supervisor to help her develop better while salary was the deciding factor for skills for interacting with staff. This ELIZABETH ZIEMBA is a senior associate at 6 percent of employees in a survey of strategy helped reduce turnover at the Stackpole & Associates, Brookline, Mass., 28,000 health care workers who left facility. a health care marketing and research their jobs, approximately 25 percent “By working closely with our super- organization. Provider • February 2004 43 Human Resources standing the financial impact of losing employee and hiring another ( see box. ) tions for employees for whom English staff is the accurate measure of Once a provider has made those calcu- is a second language. Surveys can be turnover costs. Turnover costs vary lations, he or she can ascertain whether traditional paper-and-pencil surveys or from facility to facility and are com- an employee survey would be cost- conducted in person, by telephone, or prised of numerous factors, including effective. The cost of a survey is based over the Internet. costs of temporary help and advertising on the number of employees surveyed; While the price may vary based on a fees, all of which must be considered survey method; length of survey; and number of specific factors, on average to ascertain the true cost of losing one other factors, including accommoda- the cost of a basic paper-and-pencil survey for a facility with 200 employ- ees (at $20 to $25 per employee) runs Calculating Turnover Rates And Costs approximately $5,000. Let’s assume that the cost of turnover is $7,000 per employee COMPUTING TURNOVER RATES replaced, as it was in the health care workers study cited earlier. Manage- An annual facilitywide turnover rate is calculated by dividing the total number of ment is faced with the decision of pay- employees who left during the year by the total number of employees on staff ing the turnover cost or using that and then multiplying that number by 100. same amount of money to retain In other words: employees by allocating the replace- ment cost to study the reasons employ- Number of employees who left/terminated during the year x 100 = annual turnover rate ees stay or leave their jobs. Average number of full-time employees during the year For example: Impact On Patient Satisfaction In addition to direct cost savings due 80 employees left or were terminated during 2002 = 80 = 0.2857 x 100 = 28.57 percent to staff retention, improved employee 280 FTEs were employed during 2002 280 satisfaction has a direct positive corre- The facility has an overall turnover rate of 28.57 percent. lation to patient satisfaction. The qual- The same formula can be used to calculate the turnover rate within a job cate- ity of the relationships among staff, gory. For example: patients, and family bear a direct rela- tionship to satisfaction among all par- 10 RNs left or were terminated during 2002 = 10 = 0.3846 x 100 = 38.46 percent ties. If an employee is happy at work, 26 RNs employed full-time during 2002 26 he or she has a better attitude toward work, and this attitude often translates MEASURING TURNOVER COSTS into better relationships with patients and families. Strong positive relation - According to researchers Straker and Atchley, turnover factors include: ships between staff and patients trans- s Costs of employee leaving. These include exit interviewer’s time, employee late into improved ratings on the cus- wages during exit interview, administration-paperwork, separation pay, increased tomer-satisfaction surveys, said Susan unemployment tax, and additional overtime and temporary help. Terminating an Eaton in her report, “What a Differ- employee may have additional direct costs if mediation or litigation is involved. ence Management Makes: Nursing s Costs of a new hire. These include paperwork-benefit sign-up, advertising Staff Turnover Variation Within a for position, interviewer’s time, testing costs (drug, skills), medical exams, staff Single Market.” orientation time, background and reference checks, formal and informal training, Relationships are disrupted by con - and reduced efficiency-productivity of new worker. stant changes in caregivers and are s Additional direct-hiring costs. These may include factors such as relocation negatively reflected in patient satisfac - payments, recruiter fees, attorney fees for visa processing for hiring foreign- tion surveys, she said. s trained workers, and other benefits paid to new hires. Once an accurate dollar figure has been determined, an informed management For More Information decision can be made in terms of budget allocation. For example, if the cost of turnover is $5,000 per employee who leaves or is s The author can be reached at terminated and 80 people are replaced each year, the total cost to the facility is EZiemba@stackpoleassociates.com or $400,000. (800) 844-9934. 44 Provider • February 2004 Reprinted with permission of Provider Magazine.