RN turnover in healthcare on the rise

Photo: Dean Mitchell/Getty Images

The "Great Resignation" is evident in healthcare, with hospital turnover on the rise. That brings with it its own set of costs and challenges that have hospital leaders looking at ways to reduce their turnover rates.

According to the 2022 NSI National Health Care Retention & RN Staffing Report, during the past year, hospital turnover increased by 6.4% and currently stands at 25.9%.  Although hospitals did not meet their 2021 goal to reduce turnover, they've doubled down by setting a higher goal, which is to reduce turnover by 5.9%.

Last year, RNs exited the bedside at an alarming rate and hospitals shed 2.47% of their workforce, the data showed. For the first time since conducting the survey, RN turnover outpaced the hospital average.

The turnover rate for staff RNs increased by 8.4% and currently stands at 27.1%. Registered nurses working in surgical services, women's health and pediatrics recorded the lowest turnover rate, while nurses working in step down, telemetry and emergency services experienced the highest.

WHAT'S THE IMPACT?

The cost of turnover can have a profound impact on diminishing hospital margins, the report found. According to the survey, the average cost of turnover for a bedside RN is $46,100, resulting in the average hospital losing between $5.2 million and $9 million. Each percent change in RN turnover will cost/save the average hospital an additional $262,300 annually.   

Hospitals are experiencing a dramatically higher RN vacancy rate. Currently, this stands at 17%, up 7.1 points from last year, with 81.3% reporting a vacancy rate in excess of 10%. The RN Recruitment Difficulty Index remains elevated at 87 days on average, regardless of specialty. In essence, it takes three months to recruit an experienced RN.

Feeling the financial stress, hospitals are looking to decrease reliance on supplemental staffing. The greatest potential to offset margin compression is in the top budget line item, labor expense. Every RN hired saves $210,000, the survey found.

The national hospital turnover rate is 25.9% at present. Last year, hospital turnover increased 6.4% and ranged from 5.1% to 40.8%. In the past five years, the average hospital turned over 100.5% of its workforce.

Voluntary terminations accounted for 95.5% of all hospital separations. To further understand turnover, respondents were asked to identify the top five reasons why employees resigned. Participants were asked to select from a list of 20 common reasons. Personal reasons, career advancement and retirement were at the top of the list. Others include relocation, salary, education, scheduling, commute and workload/staffing ratios.

An overwhelming majority of hospitals, 96.1%, view retention as a "key strategic imperative."  Almost all hospitals have retention initiatives. In fact, close to three quarters (72.6%) have a formal retention strategy, yet less than half (44.5%) are tied to a measurable goal. Establishing a measurable goal needs to be a core component of any retention strategy, authors said.

THE LARGER TREND

Turnover among RNs and other hospital staff mirrors some of the turnover trends seen among primary care physicians. Nearly one billion dollars in annual excess healthcare expenditures are due to turnover of primary care physicians. Work-related burnout is a significant driver of those costs, according to a 2022 American Medical Association-led study published in Mayo Clinic Proceedings.

The analysis found that job turnover in the primary care physician workforce leads to an additional $979 million in annual excess healthcare costs across the U.S. population, with $260 million (27%) attributable to burnout.

There are a number of plausible reasons for the increase in healthcare expenditures that take place when patients lose their PCPs. For one, continuity between patients and PCPs is important for quality of care and patient satisfaction, as well as for total costs of care. If care shifts to higher-cost venues, such as the emergency department rather than the ambulatory setting, costs rise.

Also, to the extent that patients replace primary care with non–primary care, they may receive more low-value care.
 

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