How to Win the
Healthcare Talent Wars, Part 1
—By
Dave Lefkow. Article originally appeared
on the Electronic
Recruiting Exchange.
From 1997 to 2000, a war for talent was being
waged in the high-tech field. With a growing
need for software, an Internet-fueled economy,
and declining enrollment in BSCS programs, the
demand for IT professionals far outstripped the
supply.
While the high-tech juggernaut has hit a few
speed bumps, a bigger recruiting challenge now
exists in the healthcare industry, with no end
in sight. Despite the obvious differences in
the backgrounds and skill sets of IT and healthcare
talent, there are some eerie similarities between
the old talent wars and the new. By looking at
the lessons learned the last time around, healthcare
recruiting teams can identify what might lie
ahead and what they can do to come out on top.
Part 1 of this series will focus on some of
the similarities and differences between the
two labor shortages. Part
2 will cover the lessons learned from the
IT talent wars and how they can be applied to
the challenges facing the healthcare industry.
The Similarities Between the
IT and Healthcare Labor Shortages
The statistics being churned out are very similar
to what we heard not so long ago in the IT industry.
Here's a sampling of just a few.
1. A decreasing supply, and
an increasing demand.
IT:
- In 1999, 10% of all IT positions, or 346,000,
were unfilled. (Source: The National Science
Foundation and the National Research Council)
- In the midst of this demand, enrollment in
BSCS programs actually went down for five straight
years by two percent per year. (Source: National
Center for Education Statistics)
Healthcare:
- Nursing, which makes up 75% of all open healthcare
positions, currently has a 13% vacancy rate.
One in seven hospitals report a nursing vacancy
rate of over 20%. (Source: American Hospital
Association)
- After six straight years of declining enrollment,
nursing enrollment edged up by 3.7% in 2001.
Since 1995, however, nursing enrollment is
down over 17,000. (Source: American Association
of Colleges of Nursing)
2. Education initiatives by
government and private industry.
IT:
- Organizations like the Technology Workforce
Coalition (TWC) were formed to lobby for federal
and state legislation to provide technology
training tax credits to individuals and businesses
to eliminate the technology skills shortage.
- Microsoft launched a program called Skills2000
to provide low interest rate loans to individuals
enrolling in IT courses.
Healthcare:
- The Nurse Reinvestment Act was passed by
Congress in December of 2001, with the goals
of addressing the nursing shortage through
scholarships, student loan repayments, residencies
and public service announcements.
3. "Coopetition."
IT:
- Several major competitors joined the TWC,
including Microsoft, Intel, Novell, and IBM.
Healthcare:
- In an effort to improve the image of the
nursing profession and encourage more individuals
to enroll in nursing programs, competing nursing
associations and organizations have joined
together on several initiatives. One example
is the Georgia Hospital Association (http://www.abettercareer.org),
which combines the resources of over 100 hospitals
statewide to promote careers in healthcare.
4. Staffing firms' high growth.
IT:
- IT staffing firms made a killing in the mid
to late 1990s. I know, I was in one. We literally
couldn't keep up with the number of job orders
we had. It seemed like more high-tech staffing
firms were created in the IT industry in the
1990s than existed previously.
Healthcare:
- The average healthcare organization I encounter
is literally spending millions of dollars per
year on outsourced and contingent staffing
services. The greatest portions of these expenses
lie with traveling nurse agencies and nurse
registries. For those of you not in the healthcare
field, traveling nurses are like contingent
staffing with a twist: the traditional 15%
bump in hourly pay with full benefits, housing
allowances, bonuses, guaranteed hours and more.
Some nurses relocate, but many stay in the
same area and receive all of the above benefits.
Nurse registries fill in for nurses from shift
to shift and can be available with two hours
notice.
The list of similarities goes on: large sign-on
bonuses, outrageous benefits being offered, increasing
pay scales, a litany of government reports, extremely
long hours by employees already in the field,
and more.
That said, there are several differences between
this labor shortage and the last that will give
the healthcare labor shortage considerably more
staying power.
Unique Challenges Faced by
the Healthcare Industry
1. Openings that are really
critical.
The IT labor shortage was critical in terms
of stalling several e-business initiatives and
slowing the growth of our economy. But in healthcare,
the vacancy rate has dramatic effects on patient
care. A recent statistic in Time magazine showed
that, when nurses have six patients instead of
four, the odds of a patient dying after surgery
increase by 14%. On my next visit to the hospital,
I know that the first question I ask will be
about its nurse-to-patient ratio!
2. Retention is a much bigger
problem.
While technology companies could lure candidates
with stock options worth millions of dollars
on paper (and not the green kind of paper), there
are no get-rich-quick schemes in healthcare.
When someone in healthcare can't handle the long
hours, weekend shifts, and lack of vacation time,
they either switch to a different career path
(LPNs, for example, can often find work with
more regular hours), or leave the field altogether.
The average RN turnover rate in acute care hospitals
in 2002 was 21.3%, according to a study from
the American Organization of Nurse Executives,
while the Federation of Nurses and Health Professionals
reported that one in five nurses are thinking
of leaving the field altogether for reasons other
than retirement.
3. An aging workforce and population.
Ready for even more statistics? Last ones, I
promise. According to the National Sample Survey
of Registered Nurses, the average age of the
working RN population was 43.3 in March 2000,
up from 42.3 in 1996. Even more recent statistics
show an average age of 45.2. The RN population
under the age of 30 dropped from 25.1% of the
nursing population in 1980 to 9.1% in 2000. What
this means is that the nursing shortage is here
to stay, with many nurses nearing retirement
age and no pipeline of young workers to fill
the void.
The need for healthcare services is also expected
to increase dramatically in the near future,
as Baby Boomers will all be over 60 by 2005.
By 2020, the number of people over 65 will increase
by 53% over today's numbers, compared to a 12%
total increase in population.
4. A less technical bent of
the workforce.
With the IT labor shortage, technology became
a primary driver in lowering recruiting costs.
Even before the Internet went mainstream, it
was possible to recruit qualified IT professionals
using Usenet discussion groups and the new breed
of job boards. Today, almost all recruitment
advertising for IT workers can be done on the
Web.
Nurses, however, typically don't have Internet
access at work, nor are all of them online. The
newspaper classifieds have been a primary beneficiary
of the healthcare talent wars to date, as healthcare
organizations are not often ready to take a leap
of faith and invest heavily in technology. One
look at the Sunday classifieds' or trade journals'
healthcare sections and you'll see something
that is reminiscent of IT recruiting circa 1995:
large display ads, highly detailed job descriptions,
and mailing addresses and fax numbers as primary
or secondary response mechanisms.
In the next installment, I'll discuss what the
recruiting industry learned the first time around,
and what lessons can be applied to the new talent
wars in the healthcare field.
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