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Strong Medicine at Alegent Health

February 27, 2004
Related Topics: Work/Life Balance, Financial Impact, Retention, Featured Article, Compensation, Benefits
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The talk in human resources at Alegent Health a few years ago was about suturing a hemorrhaging workforce. Today the Omaha-based company is celebrating an impressive recovery. In 2000, the 9,000-employee health-care organization had 550 open positions and a turnover rate of nearly 24 percent, which cost the company $15 million a year. It was spending more than $18 million annually on contingency labor. Employee and patient satisfaction was well below acceptable levels at Alegent’s seven acute-care hospitals, two long-term-care facilities and more than 200 clinics and outpatient-service sites.

    The company formed an employee-retention task force, made up of a cross section of management and human resources, to address the problems, says Suzanne Nocita, operations leader of workforce planning. Three years later, that task force’s initiatives have helped lower overall turnover to 12 percent and decreased the vacancy rate to 4 percent, saving the company $15 million. From 2000 to 2003, the level of employee satisfaction increased from 55 percent to 67 percent; patient satisfaction is up from 70 percent to 90 percent. Alegent is the 2004 Optimas Award winner for Financial Impact because of its success at drastically reducing turnover and saving the company millions.

    The health-care organization turned things around by making recruiting and retention top concerns. Its task force looked at what was working in the organization and found that 95 percent of the nurses in its one-year residency program, where new grads are assigned a preceptor and mentor to advise and guide them, stayed on after its conclusion. Alegent decided to emulate that success and established a PAL program--Peer Available to Listen--for service-support employees such as certified nursing assistants, housekeepers and those in food services.

    Alegent also changed the process of welcoming and orienting new employees. Orientation was expanded from one to two days, and now managers welcome employees on their first day with personal, handwritten notes and also take them to lunch. At the start of PAL, Alegent had a 50 percent turnover rate among service-support staff; today the figure has plummeted to 19.8 percent. An employee-relations council also was established, bringing together 19 employees from Alegent’s four campuses. Recruiting efforts were spurred by partnerships with nine area nursing colleges, where Alegent established $10,000 scholarships in its name. Students who accept a scholarship also make a two-year commitment to the organization after graduation.

    The organization also instituted a leadership-development training program that offers 2,000 different classes to employees at no charge, and a career-advancement program that pays up to $20,000 for an employee to go back to school to earn a nursing degree. Thirty-five employees are in the program.

    The initiatives cost Alegent about $1.5 million, a small price for a savings of more than $15 million. Turnover is now 11.6 percent overall, saving the organization $10 million annually. The use of contingency labor has decreased 32 percent, saving Alegent $5.8 million a year. And the organization’s reputation in the community is excellent, Nocita says. "We were just named one of the top five companies to work for in Omaha in 2003."

Workforce Management, March 2004, pp. 40-42 -- Subscribe Now!

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