Originally published in Modern Healthcare, January 2022

Compensation alone has proved insufficient in keeping healthcare organizations properly staffed amid the unprecedented labor shortage.

The Great Resignation continues to cause serious challenges for myriad industries, but few have been affected more than healthcare. Many organizations have tried to combat the turnover with financial responses, such as retention bonuses and pay raises. While everyone would welcome a pay increase, compensation alone has proved insufficient in keeping healthcare organizations properly staffed amid the unprecedented labor shortage.

This should not come as a surprise, given that the industry’s low margins and drive for maximum efficiency have long left much of its workforce feeling expendable, burned out and morally injured. The dangers and disruptions caused by COVID-19 in this already challenging environment have exposed the severity of a longstanding industry issue: an unsustainable approach to its human capital.

For healthcare to right this scenario, senior leaders must first internalize the cause of the problem. The situation is not one that can be fixed solely by a human resources department, regardless of the investment in recruitment and retention. Instead, healthcare organizations – starting at the very top – must aspire to become the kind of places individuals and teams want to be long-term. Simply, they have to become great places to work if they expect to be able to attract great people.

Making this transition is no quick fix. It requires a hard look at distinct workplace cultures, leadership behaviors and standards of the industry at large. For example, many clinical organizations express the value of their people’s time as “productive” only when it is reimbursable – and call the rest “non-productive.”

This all-too-common factory mindset disincentivizes participation in much-needed leadership development and cultural change initiatives, explaining why the healthcare industry has lagged on such critical endeavors. Combatting this trend requires leaders to consider the sustainability of their existing human capital strategy and to pursue investments in talent with longer term payoffs. Big picture, leaders must strengthen their focus on how the wholeness of their people drives patient care quality, integrate that focus into their organization’s drive for profit, and speak openly and transparently about their efforts to accomplish both.

In addition, leaders must seek to understand the specific challenges faced by individuals and what would improve their job satisfaction. A thorough assessment conducted by an independent organization can best reveal the extent to which critical employees and staff are feeling overworked, undervalued, disrespected and so on. Such an assessment can further shed light on the pandemic’s impact on the trust people place in their employers, as well as their perceived ability to succeed on the job. It can also reveal how job satisfaction might be positively influenced by factors such as:

• Greater autonomy

• Clear career development pathways

• Increased responsibility

• Opportunities to enhance knowledge and skills

• Working with other high-performing and motivated coworkers

• Embracing whole person wellness and work-life balance

• Enhanced transparency and investment in two-way communication

• More work flexibility

This data is essential to the success of any healthcare organization’s long-term recruitment and retention plans. Ideally, the information would drive the development of a strategic roadmap that, with the active involvement and commitment of senior leaders, would facilitate the organization’s needed transition, outlining clear opportunities to review and assess what’s working along the way.

What’s more, healthcare should lean into its unique role and importance amid a public health crisis. Because its very nature is mission-driven, the industry brings together individuals with an intrinsic drive to be of service. Tapping into that service mindset is a must if leaders expect to engage or re-engage a workforce that has accepted great personal risks and made significant sacrifices to provide needed care to others. Nourishing the service mindset will require leaders to communicate and demonstrate – clearly and consistently – their belief and recognition that high-quality clinical care is the foundation of their mission and a primary driver of financial performance and organizational health.

The Great Resignation offers a wake-up call to an industry that has long accepted an unsustainable status quo. Fortunately, the human capital and cultural improvements it necessitates will be valuable long after the labor shortage dissipates. By investing in these solutions now, hospitals and healthcare services organizations can better prepare themselves to weather future crises and, in the meantime, pursue people-focused objectives that have been shown to drive profitability and expedite value creation.

Read the original article in Modern Healthcare here.

For more information about FMG Leading’s healthcare practice, click here.

About the Author:

Addam Marcotte, a Principal at the human capital advisory firm FMG Leading, brings more than 20 years of experience managing organizational operations and leadership development initiatives. He focuses on helping healthcare services and private equity backed healthcare companies enhance strategic alignment, lead change, build internal trust and improve leadership effectiveness.