When hospitals are looking at cutting labor expenses the first place they tend to look is their agency usage. This is a logical impulse, but it often leads to the idea that if cutting back on agency is good, eliminating it is even better. While this might sound reasonable, it is generally not a good strategy.
Overreliance on agency staff can have disastrous consequences (in addition to the unsustainable expense), including poor morale, increased turnover, and decreased quality. However, eliminating agency altogether could leave your organization without a source of last-minute staffing when you need it most.
Effectively Layering Contingency Staff
In a previous blog post we introduced the idea of the “Seven Layer Recipe” for contingency staffing. The layers, or different types, of contingency staff are in place to flex up during times of high need and flex down in times of low census.
Included in this strategy is the utilization of the right agency partnership. Carefully choosing and maintaining a relationship with the highest quality staffing organization in your city can end up saving the day when all other sources of internal contingency staffing have been utilized. Also, with the right contractual stipulations, it can prevent this agency from recruiting your core staff members.
Agency should be called upon only in unforeseen times of high need. Note this word, “unforeseen.” Agency is not the solution to a foreseeable, and/or possibly long-term issue, like the anticipated nursing shortage.
At Avantas, we believe (because of our utilization of predictive analytics and patient volume forecasting) that core staff absences (PTO, FMLA, ill calls, etc.), position openings, core staff in education and orientation, seasonal increases in census, and patient acuity are all foreseeable. All of these causes can, by and large, be predicted when the appropriate data is captured and should be considered as part of the overall workforce plan.
Diagnosing Agency Demand
The first step to cutting agency usage is to conduct a thorough analysis to decipher why you are using excessive agency. Continual reliance on agency speaks to a problem that goes beyond simple supply and demand. We have found that heavy reliance on agency can be the result of a combination of these common issues:
- The inability to accurately forecast patient volumes
- FTE Leakage: Staff not being scheduled to their FTE commitment
- Imbalanced Core Staff Schedules: This can include FTE leakage, but it also speaks to having the right balance of staff scheduled relative to demand, i.e., scheduling more staff on peak days and less on others
- The inability to effectively identify FTE vacancies and/or fill those vacancies
- Lack of transparency and the inability to effectively share resources between like-units
- The need to right-size internal contingency sources
Once you have a clear understanding of the issues resulting in the excessive use of agency you can create a blueprint of what to do to improve.
Cutting agency without first fixing the issues causing the need for it will have disastrous consequences that will most certainly include core staff burnout from increased overtime and floating.
Agency is not a bad word, but relying on it to fill foreseeable demand is a bad strategy. Please feel free to email me at email@example.com to learn how Avantas can help you lessen your reliance on agency and develop a cost-effective and sustainable resource management plan.