Over the past several months, the number one question I've gotten from health care executives is, "How do we stop the exodus of RNs from our inpatient units?" It's clear that we don't have enough nursing staff to meet the demands on our health care system. From my conversations with CNOs across the country and continued warnings in public media, I know RN turnover, vacancies, time-to-fill, and other key workforce metrics are all trending in the wrong direction, with no sign of reversal.
The data paints a concerning picture regarding RN supply and demand, with the national demand for nurses projected to grow 9% annually from 2020-2030, amounting to 194,500 nurses needed each year. Meanwhile, data for the supply of nurses remains unclear with reports of nursing school capacity challenges and no revised projections of total retirements post-Covid.
Bottom line, and with rare exceptions, the accelerating supply and demand imbalance is threatening inpatient nurse staffing to near crisis levels. Many executives ask, is the current RN shortage similar to other cyclical shortages we have previously seen? If we remain patient and do what we've previously done, will this shortage resolve itself? Advisory Board's answer is no, and here's why.
This isn't just another cyclical shortage
Workforce challenges are more extreme this time around because of the following four, compounding factors intensified by Covid.
- Unresolved structural issues within the care environment
- Extreme workforce burnout
- Accelerated early retirements
- Changing workforce needs and expectations
We are living in a world where RNs are leaving hospital employment at far greater rates than we have ever seen. Once Covid subsides, the damage to our employees and practice settings will not automatically reverse. A different in-kind approach to workforce stabilization is required.
The question executives need to ask themselves is why are nurses leaving the bedside? There is no one single answer, but McKinsey conducted a study digging deeper into nurses' intent to leave their current position. Staffing was the top issue cited, followed by a host of other concerns related to workload and organizational support.
Travel nursing is another compounding variable further eroding permanent staffing levels. In early November, I polled 200 nursing leaders on where departing staff go. 55% of respondents said their nurses left for travel agency contracts (N = 201). When asked why their nurses were leaving for travel nursing, 96% listed compensation as the number one reason, 34% cited the opportunity to visit new places, and 33% noted the ability to have extended time off between assignments (N = 190).
Addressing this nursing shortage will require the entire C-suite
Addressing this nursing shortage will require more than nursing and HR leadership. Many organizations and systems with severe shortages face tough choices in their mission to guarantee quality and safety, keep services open, and grow market share. But let me be clear, without nursing, none of these ambitions can be achieved.
Failing to invest in the nursing workforce beyond band-aid solutions will cost systems greatly and delay progress on the aforementioned goals. The workforce challenges we're facing will require investment and that will require buy-in from the entire C-suite. Tough C-suite trade-offs will have to be made. Below is a sampling of data to make the business case for increased investment in the nursing workforce:
- $40K is the average cost of RN turnover in 2021
- $12M is the estimated cost of RN turnover for 300 RNs
- $3M is the potential cost savings for every 20 travel RNs a hospital eliminates
- $90K is the revenue lost per day for a 300 to 500 bed hospital when understaffed
Organizations will either need to invest in their nursing workforce on the front end or pay for it on the back end. This shortage will require more comprehensive solutions as well, this point emphasized by a C-suite executive below:
"The current and future nursing shortage is potentially an existential crisis for hospitals and health systems. In general, hospitals and the nursing profession change incrementally. But this shortage will require hospitals to take some big leaps – drastic changes will be needed."
-EVP, CFO of a large, multi-state health care system
As health care executives, how do you develop a plan that attends to immediate workforce needs, but also stabilizes your workforce for what lies ahead? A critical first step to your efforts is accepting some hard truths present in our current workforce landscape.
The 6 hard truths about the nursing workforce
My team has outlined six hard truths that are foundational for all C-suite executives to understand and accept, as different in-kind solutions are identified:
- Waning organizational loyalty has eroded bedside RN longevity
- Staff need work-life balance, and won't stay with you without it
- Care models that rely disproportionately on RNs are no longer sustainable
- Assistive personnel can't be overlooked anymore—they are critical to team-based care
- Overreliance on contract labor is unsustainable
- Staffing is a zero-sum game, and everyone is your competitor for nursing talent
The nursing shortage is a strategic health care challenge and as such requires the commitment of the entire C-suite, not just the CNO. Within each hard truth is a proposed mindset shift needed to adapt to the current landscape and related guidance to identify solutions.
Join Advisory Board's Carol Boston-Fleischhauer on December 16th for an executive briefing on the mindset shifts required to address the six hard truths we must accept.