Why More Hospitals Are Outsourcing Their Healthcare Recruitment

Date Posted: August 3, 2011

August 3, 2011 - Today’s attention on healthcare reform and the need for greater efficiency is putting more pressure on healthcare executives than ever before to find cost-effective workforce strategies. Instead of business as usual, many are asking, “What can we do differently to help us meet our patient care and financial goals?”

One of the newer innovations being used is recruitment process outsourcing (RPO). While the concept may be more familiar in other industries, RPO offers solutions to many unique human resource problems in the healthcare industry.

“The healthcare recruiting landscape has become really complex in the last decade,” commented Philip Fredrick, director of RPO client development for AMN Healthcare. “So much has changed in the market, but little has changed in the day-to-day operations of many healthcare organizations. Healthcare employers must now be able to compete for clinical talent locally, regionally, and nationally, and many are not equipped to cost-effectively keep up with that.”

RPO can bring greater efficiency into human resource processes, providing cost savings and other advantages for hospitals and other healthcare providers.

What RPO entails

Contrary to some understandings, RPO is not another form of permanent placement, but an outsourcing of all or part of the sourcing, screening, hiring and on-boarding process, according to Fredrick. A dedicated team of recruitment experts works on the healthcare organization’s behalf, offering a streamlined approach to recruitment.

Service level agreements can range from short-term, project-based engagements to multi-year partnerships; they can cover one part of the recruitment process or a specific clinical area or unit, or encompass the entire staffing and recruitment function.

Reasons for outsourcing

The flexibility and cost-effectiveness of outsourcing recruitment functions—only when and where needed—is part of the appeal. Healthcare employers of all sizes also can leverage the expertise, technology solutions and extensive recruitment network of their RPO partners.

“There are many advantages with RPO, like the ability to rapidly scale up or down staffing efforts without the burden of long-term fixed costs,” explained Ralph Henderson, president of nurse and allied staffing and RPO at AMN Healthcare. “Additionally, RPO providers can bring technology and other resources to the table that many hospitals can’t afford on their own. Other drivers include lowering the cost per hire, shortening the time to fill positions, improved compliance with employment laws like EEOC and OFCCP, and casting a wider recruitment footprint that allows you to draw from top talent across the United States and internationally.”

RPO providers have the experience and resources to conduct an efficient talent search, freeing up a hospital’s internal human resources staff for other tasks. They can also help their clients avoid problems like patient diversions and keep revenue projections in line by reducing the time it takes to fill vacant positions.

RPO services can range from simple to sophisticated, said Henderson. “AMN offers such things as requisition approval management, employer branding, career site management, sourcing, screening, assessment, precision matching, interview, offer management, relocation and on-boarding. Clients can access recruitment analytics at any time to evaluate the effectiveness of the program.”

Measuring the ROI for RPO

The return on investment (ROI) from an RPO program can be substantial, according to research done by Nelson Hall, a business process outsourcing analysis firm. They found that the average RPO engagement is estimated to reduce recruitment costs 24 percent, and recruitment cycle times by almost half.

Part of the challenge in determining the feasibility of RPO for many healthcare organizations is that they may not have the metrics available to accurately assess their current situation. But RPO providers can help measure performance factors and devise a solution for improvement; they usually offer ongoing reporting as part of their service.

“We work together to collect key hiring and workforce statistics like number of hires, specialties, time-to-fill, cost-per-hire, overtime and contingent staffing cost,” Henderson said. “Once collected, we benchmark these against expected improvements based on our experience with other healthcare facilities and determine the ROI for outsourced recruiting. We’ll even help you present the business case to finance and management.”