Alegent Health diagnosed severe recruiting and retention problems. It treated them with new training, partnership and reward programs and is saving $15 million per year.
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Financial
Impact
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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."
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