Posted by Brian Augustian on August 18, 2017.
Health care providers tend to lag other industries in the adoption of new business processes and technologies, and we find this to be consistent in the industry’s use of big data and analytics to improve organization performance. This is likely due to a number of factors, including the nature of health care work, tight financial margins and limited funds, and historically conservative cultures. Yet, the successful use of data analytics in other industries could indicate that it’s time for health care systems to up their game.
Many industries and functions benefit from data analytics, with high-profile organizations in a variety of industries using it to improve performance in a number of functional areas. This approach can also be leveraged to increase HR effectiveness. Cross-industry research shows that organizations that use HR-related data analytics have stock market returns 30 percent higher than the S&P 500; are twice as likely to be delivering high-impact recruiting solutions; and have leadership pipelines that are 2.5x healthier.1
What are some implications for health care? Along with overall consolidation in the industry, the health care workforce is undergoing radical changes that come with challenges:
- Rising turnover—While the national rate of hospital employee turnover leveled off at 17.1 percent in 2015 (slightly below 2014),2 bedside registered nurse (RN) turnover increased from 16.4 percent in 2014 to 17.2 percent in 2015.3 Newly hired nurses are also leaving faster than they once did: an estimated 17.5 percent of newly-licensed RNs leave their first nursing job within the first year, and one in three (33.5 percent) leave within two years.4
- Potential retirement bubble—The aging US population is producing a potential employee retirement bubble, and the health care industry is not immune to this. More than half (55 percent) of the RN workforce is age 50 or older.5
- Changing required skill sets—Staff turnover is not the only challenge facing health system executives: the required skill sets for health care professionals are changing to address the impact of health technology advancements (e.g., electronic health records [EHRs], Computerized Physician/Provider Order Entry [CPOE], Clinical Decision Support), new value-based payment models, and alternative care delivery approaches (e.g., patient-centered medical home [PCMH], retail clinics).
A balanced qualitative and quantitative approach
To capitalize on employee-related opportunities emanating from health care consolidation and shifting workforce patterns, forward-thinking health system leaders are striving to better understand what is changing, who/what is driving the change, and what value creation to expect from addressing core business and talent issues.
Qualitative measures that are based on a company’s mission statement, its HR handbook, or an individual’s experiences during employment often guide critical workforce decisions; however, this lens provides only a partial view into an organization’s “people portfolio”—blind spots are common. To gain insights that drive value, executives should transition from qualitative- to quantitative-based workforce planning.
People analytics helps enable health care leaders to flip the lens—to scientifically unlock and measure the value of people to the organization. People analytics treats employees as a critical asset in the supply chain; an asset that can be analyzed and optimized to benefit individuals and the company as a whole. It can uncover opportunities to transform HR practices and optimize talent-focused investments and programs by helping executives make more informed decisions about their workforce. Just as important, people analytics can increase day-to-day and long-term employee satisfaction by helping to identify opportunities for fulfilling career development.
For example, people analytics can be used to address:
- Changing workforce demographics—isolate employee segments and identify options to mitigate excessive turnover.
- Leadership development—quickly identify opportunities to optimize learning spend and identify employee characteristics for promotion to senior levels.
- Culture and engagement—identify diversity roadblocks, skill gaps, and other barriers.
- New organization models—identify opportunities to more effectively align, allocate, and deploy staff.
- Productivity—use labor cost optimization principles to identify opportunities to reduce excessive employee labor and overtime cost without negatively impacting service quality.
A case in point: People analytics uncovers hidden drivers of employee turnover
A regional health system with 20+ acute care facilities, 100+ clinics/physician offices, and ~40,000 employees was experiencing above-average RN turnover, and turned to analytics to better understand its nursing workforce and the drivers of turnover. Based on a statistical analysis of employee data, health system executives were able to see that many of their prior hypotheses about turnover drivers were inaccurate. Actual drivers included:
- Instances where managers were not addressing employee desires for alternative assignments/positions (the analysis showed that employees who changed jobs within the health system were significantly less likely to terminate)
- Large departments with a large (80+) span of control were directly related to higher rates of employee termination, in some cases nearly 2x the organization’s average
These seemingly minor challenges were proven to have a statistically significant impact on employee turnover. Using this analysis, the health care system was able to create a predictive model to identify employees at high risk for resignation and develop targeted, fact-based talent management solutions to address these challenges.
Using people analytics requires a strategic approach that leverages senior leadership support and a skilled team of analytics professionals. Among smart first steps:
- Begin at the beginning. Some health care providers may hesitate to explore the use of people analytics because they fear their organization lacks good quality data, adequate technical capabilities, and/or knowledgeable staff. Numerous external resources are available to help you “begin at the beginning,” gaining quick, actionable insights while helping evolve your analytics capability and use over time.
- Target business problems that are leadership priorities. Analytics ventures often fail due to chasing a problem that is not a top priority to leadership. It is critical that people analytics projects proactively gain executive-level buy-in and focus on business issues, not just HR issues.
- Invest in the right people with the right expertise. Next-generation HR professionals will likely need to be more business-oriented and possess critical new skills in organizational networks, employee engagement and culture, building and leading teams, analytics and statistics, digital platforms and applications, and employee experience and brand. Companies are increasingly hiring or assigning business professionals, mathematicians, and data scientists to their HR departments to boost people analytics capabilities. Health care systems should follow suit and invest in staff that possess analytical, interpretative, and transformational skills.
1Big Data in Human Resources: A World of Haves And Have-Nots,” Forbes, October 7, 2013, http://www.forbes.com/sites/ joshbersin/2013/10/07/big-data-in-human-resources-a-world-of-haves-and-have-nots/#3eb72c8c539c
22016 National Healthcare Retention & RN Staffing Report, NSI Nursing Solutions Inc., March 2016, http://www.nsinursingsolutions.com/Files/assets/library/retention-institute/NationalHealthcareRNRetentionReport2016.pdf
32016 National Healthcare Retention & RN Staffing Report, NSI Nursing Solutions Inc., March 2016, http://www.nsinursingsolutions.com/Files/assets/library/retention-institute/NationalHealthcareRNRetentionReport2016.pdf
4“Nearly One in Five New Nurses Leaves First Job Within a Year, According to Survey of Newly-Licensed Registered Nurses,” Robert Wood Johnson Foundation, September 4, 2014, http://www.rwjf.org/en/library/articles-and-news/2014/09/nearly-one-in-five-new-nurses-leave-first-job-within-a-year–acc.html
5Nursing shortage fact sheet, American Association of Colleges of Nursing, 2014, http://www.aacn.nche.edu/media-relations/fact-sheets/ nursing-shortage