Improve Retention Rates and Reduce Costs by Keeping Staff Healthy and Happy

By Jennifer Larson, contributor

February 14, 2013 - In just a couple of months, Baptist Memorial Hospital-Memphis will cut the ribbon to officially celebrate the opening of an onsite wellness center that will be open around the clock for the hospital’s employees.

It’s just one of a series of wellness-oriented initiatives championed by the hospital and embraced by its staff that is aimed at improving the health of the people who work there. The hospital, which is the flagship hospital of the Baptist Memorial Health Care system, is also nine months into an employee wellness program called Well4Me, which includes components like a personal health challenge for employees and a blog with healthy lifestyle tips and content.

The Memphis hospital’s emphasis on employee health just makes sense, said the hospital’s CEO, Derick Zeigler.

“We are about taking care of people, and I think it is important that we walk the talk,” he said.

Improve Retention Rates and Reduce Costs by Keeping Staff Healthy and Happy
John Lacy, head of human resources for Baptist Memorial Health Care, said committing to employee health and wellness may require a fundamental culture change.

“It’s about committing to a culture of health,” added John Lacy, director of human resources for Baptist Memorial Health Care.

Employee wellness programs are growing in popularity, as health system leaders look for ways to boost their employees’ health--and in doing so, boost their abilities to do their jobs well. This can improve the hospitals’ and health systems’ bottom lines, by increasing employee productivity and satisfaction, which in turn lowers staff turnover rates and the associated costs.

“Employers are seeing the connection,” said Karen Marlo, a vice president with the National Business Group on Health (NBGH). “A healthy employee is a productive employee.”

The cost associated with replacing an employee who leaves is considerable. A 2009 report from the Robert Wood Johnson Foundation (RWJF) put the estimated cost of replacing a registered nurse between $22,000 and $64,000, and that doesn’t include the wealth of experience that seasoned nurses bring to the table. These costs mean that healthcare organizations have a definite financial interest in reducing turnover.

Baptist Memorial Hospital-Memphis has improved its nurse retention rate to 80 percent, up from about 65 percent over the past two years. Much of their current turnover is with staffers who have relatively short tenures with the organization, Zeigler said. Although he noted that the focus on wellness isn’t the sole reason for the improvement, “I do believe that it is a contributing factor,” he said.

Lacy called wellness programs and initiatives a “very visible sign that we really do care about you and your health, the same way we care about the health of the people you serve.”

Biometric screenings, exercise programs and on-site fitness centers were the top three wellness programs cited by employees in the National Business Group on Health’s 2012 report, “Perceptions of Health Benefits in a Recovering Economy: A Survey of Employees.” These three were followed closely by stress management resources and health risk assessments. 

Nearly 78 percent of the respondents agreed that “employers are right to offer wellness programs [and] help keep health benefits affordable.”

A majority of the respondents in the National Business Group on Health survey also believed that employers should reward employees for maintaining good health. Many also said they supported incentives for participating in programs or making improvements to their health, although most did not care for the prospect of linking health insurance eligibility to wellness program participation.

For the future, consider programs carefully

Turnover reduction is likely to remain a significant consideration for health care organizations well into the future. PwC Saratoga’s recently released 2012/2013 US Human Capital Effectiveness Report found that hospitals saw increased turnover among employees in 2011, according to data that was available from about 60 hospital systems with a total of more than 1 million employees.

The report also found that the bedside nurse voluntary separation rate rose from 7.5 percent to 9.1 percent from 2010 to 2011, and the first-year nurse turnover rate increased from 26.2 percent to 28.3 percent over the past year.

Going forward, healthcare employers will need to carefully consider their strategies to reduce turnover, including the potential returns on investment in a wellness program. And when promoting the programs to organizational stakeholders, leaders may want to emphasize the financial benefits, among others. As the authors of the NBGH report noted, “Employers also need to make a case for the importance of wellness programs and lifestyle changes and how poor health not only hurts the people directly affected but also drives up everyone’s costs, making care increasingly unaffordable.”

Marlo said, “If you’ve implemented programs, really look to see if they’re performing the way that you want. Next, look where there’s a gap. What aren’t you addressing? And the third [item] is to start having the conversation about how health impacts the financial health of your company.”

Baptist surveyed its employees to find out what they really wanted, which is an important point for any benefits program. When it comes to employee recruitment and retention, organizations should be careful about making decisions about what to offer in the future that will be most appreciated. “Employers should routinely review their total rewards strategy and do more focused assessment of what their own workforce would find motivating,” the report authors suggested.

Lacy said that Baptist is providing a core set of resources to its hospitals to provide a platform for communication and engagement--but each hospital will have the freedom to set up programs that will meet their personnel’s needs and desires.

“We want them to have flexibility,” he said.

Organizations will also need to ensure that they have a strong orientation process, noted PwC Saratoga manager Shebani Patel.

“Many organizations spend a great deal of money to recruit candidates and then don't as good of a job to assimilate them into the role, culture, environment,” she said. “Organizations need to ensure their acquisition process is ‘rock solid’ to help minimize some of this churn. This is not just about sourcing/finding new candidates, but includes ensuring that the entire process from sourcing to assimilation is strong. “

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