Employee retention is an important element of success in any organization, and even more so in healthcare. Beyond the costs of replacing employees (recent figures estimate the cost of replacing a registered nurse averages about $64,000), low turnover improves continuity of care for patients and enhances quality. Maintaining a highly competent workforce also improves physician engagement with the health system by allowing physicians to practice more efficiently.
The importance of employee retention in healthcare is compounded by the predicted shortage of healthcare workers. As Baby Boomers age, we expect the demand for healthcare services to increase. At the same time, many of our employees fall into this generation and will cut back their hours or retire altogether, creating a growing need for more qualified healthcare workers. If high-performing employees already in an organization leave because they are not happy or engaged, the continuity and performance of the system could be at risk.
Most hospitals have a number of benefits and other programs aimed at retaining employees (i.e., town hall meetings, service awards and other recognitions, employee events and outings, internal communication initiatives), and we certainly have those at Mercy. However, for the last 10 years we have focused on revving up our efforts around somewhat untraditional activities that result in retention, and the results have been impressive. We've held our turnover rate below 10 percent for the last seven years, placing us in the top quartile among hospitals nationwide.
1. Provide a living wage. At Mercy, we pay employees more than minimum wage for positions that could be compensated at that level — for example, housekeeping and dietary positions. The impact of turnover among these positions can sometimes be overlooked in favor of nurse or other clinician turnover, but continuity among these workers can be just as important. We have established a living wage specific to the four counties where our hospitals are located, and we make sure no employees are compensated below that level.
2. Survey employee engagement, not just satisfaction. Many hospitals regularly perform surveys to gauge employee satisfaction, but employee engagement is more directly related to overall hospital performance. Satisfied employees focus on themselves, while engaged employees focus on themselves and the organization. They are physiologically committed to the organization's success — the bigger picture. At Mercy, we've partnered with The Gallup Organization to measure employee engagement. Each department within our hospitals then works to develop an impact plan focused on improving certain areas of engagement. The plans are reviewed each month, and new objectives are set as needed.
3. Peer interview new hires. Ensuring each new hire is a fit for the organization, both in terms of technical performance and behavioral fit, is a key element of reducing turnover. We've involved front-line employees in the recruitment process. Based on a recommendation from StuderGroup, a healthcare consulting firm, we began implementing peer interviewing techniques. Under the model, our human resources department screens candidates and then the department manager interviews and selects 2-3 candidates who he or she is willing to hire. These candidates participate in peer interviews with a panel of 2-3 high-performing department employees trained on interviewing techniques. The candidate has the chance to meet with their future coworkers and see who they will be working with and the employees can determine if there's a cultural fit. The employees then have the final say in who is hired. Since implementing peer reviewing, the number of new hires leaving our organization within 90-180 days has dropped considerably.
4. Hold high-performer conversations. While most hospitals have annual employee reviews to assess performance and set development goals, Mercy goes beyond this by requiring all managers to hold annual "conversations" with all employees. Employees are rated as high, middle, or low performers. The focus is on high performers. These annual conversations are a more formal way for the manager to "rerecruit" the employee to the organization. Throughout the year, we expect our managers to informally recognize high performers and encourage their development. We recommend managers spend 80 percent of their time with high performers. In most organizations, managers end up devoting a majority of their time trying to improve low performers. Our managers set expectations for low-performers, hold them accountable and then move on to high performers as we believe time spent with them is more beneficial in terms of organizational impact.
5. Deal with low performers. Since revamping our retention efforts, conversations with low performers have changed dramatically. We used to sandwich their deficiencies between compliments, even if they were superficial ones. Since then, our managers have been trained on how to hold these conversations and are far more direct. Low performers are told what specifically they need to change and by when through a 90-day performance improvement plan. If they don't fulfill the performance improvement plan, they move through the discipline process and ultimately they are asked to leave if their overall performance does not improve to satisfactory level. Employees recognize poor performance is not tolerated. While no one likes to see someone lose his or her job, we've found high performers appreciate our holding everyone to the same standards. Higher performers don't want to be surrounded by low performing employees, and not allowing that has been a real help to us in retaining our best employees.
6. Perform weekly rounding on units. At Mercy, hospital leaders perform weekly rounds for a minimum of one hour on each unit they oversee. For example, each week I round on one of the departments that report to me. I start by visiting the manager and asking if there is anyone I should recognize or any unusual issues in the department I should know about. I then go through the department and chat with employees, guiding my conversation with a list of questions that reflect employee engagement. Managers also spend an hour rounding on their employees each week, assessing engagement and asking about any problems that might lead to disengagement. To employees, the rounding appears very informal, but it's a very formal requirement of our managers and something they've received formal training on.
7. Write thank you notes. Our leaders are asked to write four thank you notes per month by hand, which are sent to the employee's home. Email doesn't cut it. They don't have to be long; they describe the positive action observed, the impact it had on the operations, and why it was appreciated. We send to the home as opposed to handing them out at work because they often get shared with family members or get posted on the refrigerator for other to see. We use the notes not only as a way to thank employees but also as a way to reach out to the employee's family to let them know how their loved one makes a difference in our organization, something that is particularly impactful if the action observed involved picking up an extra shift or another activity that took the employee away from his or her family.
8. Don't ignore emotional demands on healthcare employees. One of the unique concerns healthcare organizations have about their employees is the emotional toll of dealing with sick patients, many who may be facing death. Because of these demands, we have our own, in-house employee assistance program with several professional counselors who are available to our employees. The counselors are able to address home, work, financial and personal problems, so that their effect on an employee's life and work is reduced.
While some attrition is natural due to retirement and relocation, these programs have helped Mercy keep our turnover rate below 10 percent for the last seven years. Top quartile performance for healthcare turnover is approximately 11.4 percent or lower.
Gary G. George, MBA, is senior vice president of human resources for Mercy in Toledo and Lorain, Ohio. He is responsible for the employee/labor relations, compensation, benefit administration, training and development, employee assistance and recruitment/employment efforts at the nine Mercy hospitals within Northwest and Northeast Ohio. In 2010, Mercy in Toledo received the Human Resource Management Award for large employers from The University of Toledo College of Business, The Employers Association of Greater Toledo, and Toledo Area Human Resource Association. Mr. George has been with Mercy going on 29 years.
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The importance of employee retention in healthcare is compounded by the predicted shortage of healthcare workers. As Baby Boomers age, we expect the demand for healthcare services to increase. At the same time, many of our employees fall into this generation and will cut back their hours or retire altogether, creating a growing need for more qualified healthcare workers. If high-performing employees already in an organization leave because they are not happy or engaged, the continuity and performance of the system could be at risk. Most hospitals have a number of benefits and other programs aimed at retaining employees (i.e., town hall meetings, service awards and other recognitions, employee events and outings, internal communication initiatives), and we certainly have those at Mercy. However, for the last 10 years we have focused on revving up our efforts around somewhat untraditional activities that result in retention, and the results have been impressive. We've held our turnover rate below 10 percent for the last seven years, placing us in the top quartile among hospitals nationwide.
1. Provide a living wage. At Mercy, we pay employees more than minimum wage for positions that could be compensated at that level — for example, housekeeping and dietary positions. The impact of turnover among these positions can sometimes be overlooked in favor of nurse or other clinician turnover, but continuity among these workers can be just as important. We have established a living wage specific to the four counties where our hospitals are located, and we make sure no employees are compensated below that level.
2. Survey employee engagement, not just satisfaction. Many hospitals regularly perform surveys to gauge employee satisfaction, but employee engagement is more directly related to overall hospital performance. Satisfied employees focus on themselves, while engaged employees focus on themselves and the organization. They are physiologically committed to the organization's success — the bigger picture. At Mercy, we've partnered with The Gallup Organization to measure employee engagement. Each department within our hospitals then works to develop an impact plan focused on improving certain areas of engagement. The plans are reviewed each month, and new objectives are set as needed.
3. Peer interview new hires. Ensuring each new hire is a fit for the organization, both in terms of technical performance and behavioral fit, is a key element of reducing turnover. We've involved front-line employees in the recruitment process. Based on a recommendation from StuderGroup, a healthcare consulting firm, we began implementing peer interviewing techniques. Under the model, our human resources department screens candidates and then the department manager interviews and selects 2-3 candidates who he or she is willing to hire. These candidates participate in peer interviews with a panel of 2-3 high-performing department employees trained on interviewing techniques. The candidate has the chance to meet with their future coworkers and see who they will be working with and the employees can determine if there's a cultural fit. The employees then have the final say in who is hired. Since implementing peer reviewing, the number of new hires leaving our organization within 90-180 days has dropped considerably.
4. Hold high-performer conversations. While most hospitals have annual employee reviews to assess performance and set development goals, Mercy goes beyond this by requiring all managers to hold annual "conversations" with all employees. Employees are rated as high, middle, or low performers. The focus is on high performers. These annual conversations are a more formal way for the manager to "rerecruit" the employee to the organization. Throughout the year, we expect our managers to informally recognize high performers and encourage their development. We recommend managers spend 80 percent of their time with high performers. In most organizations, managers end up devoting a majority of their time trying to improve low performers. Our managers set expectations for low-performers, hold them accountable and then move on to high performers as we believe time spent with them is more beneficial in terms of organizational impact.
5. Deal with low performers. Since revamping our retention efforts, conversations with low performers have changed dramatically. We used to sandwich their deficiencies between compliments, even if they were superficial ones. Since then, our managers have been trained on how to hold these conversations and are far more direct. Low performers are told what specifically they need to change and by when through a 90-day performance improvement plan. If they don't fulfill the performance improvement plan, they move through the discipline process and ultimately they are asked to leave if their overall performance does not improve to satisfactory level. Employees recognize poor performance is not tolerated. While no one likes to see someone lose his or her job, we've found high performers appreciate our holding everyone to the same standards. Higher performers don't want to be surrounded by low performing employees, and not allowing that has been a real help to us in retaining our best employees.
6. Perform weekly rounding on units. At Mercy, hospital leaders perform weekly rounds for a minimum of one hour on each unit they oversee. For example, each week I round on one of the departments that report to me. I start by visiting the manager and asking if there is anyone I should recognize or any unusual issues in the department I should know about. I then go through the department and chat with employees, guiding my conversation with a list of questions that reflect employee engagement. Managers also spend an hour rounding on their employees each week, assessing engagement and asking about any problems that might lead to disengagement. To employees, the rounding appears very informal, but it's a very formal requirement of our managers and something they've received formal training on.
7. Write thank you notes. Our leaders are asked to write four thank you notes per month by hand, which are sent to the employee's home. Email doesn't cut it. They don't have to be long; they describe the positive action observed, the impact it had on the operations, and why it was appreciated. We send to the home as opposed to handing them out at work because they often get shared with family members or get posted on the refrigerator for other to see. We use the notes not only as a way to thank employees but also as a way to reach out to the employee's family to let them know how their loved one makes a difference in our organization, something that is particularly impactful if the action observed involved picking up an extra shift or another activity that took the employee away from his or her family.
8. Don't ignore emotional demands on healthcare employees. One of the unique concerns healthcare organizations have about their employees is the emotional toll of dealing with sick patients, many who may be facing death. Because of these demands, we have our own, in-house employee assistance program with several professional counselors who are available to our employees. The counselors are able to address home, work, financial and personal problems, so that their effect on an employee's life and work is reduced.
While some attrition is natural due to retirement and relocation, these programs have helped Mercy keep our turnover rate below 10 percent for the last seven years. Top quartile performance for healthcare turnover is approximately 11.4 percent or lower.
Gary G. George, MBA, is senior vice president of human resources for Mercy in Toledo and Lorain, Ohio. He is responsible for the employee/labor relations, compensation, benefit administration, training and development, employee assistance and recruitment/employment efforts at the nine Mercy hospitals within Northwest and Northeast Ohio. In 2010, Mercy in Toledo received the Human Resource Management Award for large employers from The University of Toledo College of Business, The Employers Association of Greater Toledo, and Toledo Area Human Resource Association. Mr. George has been with Mercy going on 29 years.
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