Some healthcare organizations are now exploring the outsourcing recruiting/staffing option. This should not be confused with popular department management service contracts, most commonly used for pharmacy, information technology, housekeeping, and dietary that have been used for years. No, I am talking about the option of outsourcing all recruiting functions.
Sue Kamrad, RN, FACHE, one of the bright thinkers on clinical staffing who ran a large medical center’s internal staffing company which significantly improved “door-to-beside” times and accelerated productivity, has been pushing me on this issue. She is a staffing thought leader who contends that nursing shortages will become so critical that hospitals may turn to outsourcing companies to meet demand and reduce costs. She is a true believer who contends this model can effectively manage costs and build value. The nursing shortage projections certainly support her thesis.
Outsourcing recruiting can, in fact, help reduce costs. The rationale is that through outsourcing one can take advantage of the economies of scale and synergies of having access to a larger, more experienced recruiting staff than one hospital could normally afford.
The theory makes sense. It has been applied successfully in other industrial sectors for years. While there have been mixed results in healthcare, the potential for savings is prompting health systems, hospitals and large home care providers, for example, to take a closer look.
In building an outsourcing agreement, healthcare providers should ensure that the contract is based on realistic performance expectations, and that the outsourcing recruitment teams have extensive healthcare experience. The contractor’s on-site coordinators who interact with the hospital on a daily basis must be excellent project managers and have exemplary customer service skills. There will be service and performance issues. The on-site coordinators should be able to address most of these challenges. These coordinators are critical to the success of the contract, and the client should be involved in their selection.
The corporate executives at the outsourcing company should be experienced in delivering exceptional outsourcing recruitment results, especially in healthcare or similar highly technical fields. They must understand the difference between just a “fill” and a “hire,” typical staffing terms, versus the goal of hiring the “right” employee who will deliver long-term value for a specific client organization. You would think this would be clear, but with a focus on meeting service performance metrics, the outsourcing provider can easily slip into the numbers trap: the number of vacant positions as well as the time and cost it takes to hire.
How the outsourcing company operates and how a healthcare organization structures the contract is critical. For example, if the outsourcing company incentivizes their recruiters strictly on the basis of a time-to-hire and the vacancy rate metric, or if the healthcare organization insists on tough but unreasonable performance standards, there is the very real risk that the law of unintended consequences will be a factor: rushed hires. Those rarely last.
Regardless of which recruiting structure you select – in-house teams or an outsourcing company — it is important to establish reasonable performance and service expectations. While the aforementioned time-to-hire, cost-per-hire and the vacancy rate are all important measures, those metrics must be linked to other quality hire standards: the turnover rate over three, six, nine and 12-month periods, clinical or operational performance, and employee satisfaction.
I advise clients to include an assessment of how well each new employee integrates with his or her colleagues and, above all else, the quarterly performance of the hire.
While some health systems and hospitals are looking at outsourcing, many more are planning to bring more of the recruitment function, including executive search, in-house. There is no one right answer. However, it is vital to initiate careful strategic and tactical planning, performance standards that balance and reward quality hires, as well as a reasonable plan for implementation. Approaching talent acquisition in this manner will enable healthcare organizations to drive down costs while building value.
© 2019 John Gregory Self