For as long as I can remember, industry experts claimed that the healthcare industry was basically guaranteed to remain a consistent and strong job market forever. The thought was there will always be patients and patients will always need healthcare providers. Now, I see that rationale is not quite as sound as we all once believed.
The Federal Sequestration, automatic budget cuts implemented on March 1, 2013, included a 2% reduction in Medicare payments to healthcare providers. If you don’t think 2% is all that significant, you are sadly mistaken. For many hospitals, for example, Medicare is the largest single payer, at times accounting for more than half the facility’s total revenue. In those terms, 2% is a monstrous reduction.
A joint study by the American Medical Association, The American Hospital Association, and the American Nurses Association predicted that the Federal Sequester would undoubtedly result in a decline in healthcare job growth. The impact will not only affect hospitals and physician’s offices, but will have a trickle-down effect including other healthcare vendors, such as suppliers and IT providers.
Unfortunately, we are already seeing the predicted downturn. According to the Bureau of Labor Statistics, healthcare made a “relatively weak” contribution to the job market in both March and April 2013. Further, the American Hospital Association thinks it may get worse, estimating that these budget cuts could lead to 766,000 fewer healthcare jobs by 2021.
All this at a time when healthcare reform hurtles forward and an estimated 32 million new patients will have access to healthcare in 2014. In short, more providers, supplies, and ancillary staff will be required to address this massive influx of patients at a time when Medicare reimbursement will be significantly decreased. CFOs in healthcare are worried, and with all this in mind it is no surprise. This means, every department, in every healthcare organization, will be required to cut costs. Human resources and recruiting departments will be no exception.
Today more than ever, healthcare recruiters need to take serious action to reduce the costs to fill job vacancies. For any newbies reading this post, I am referring to a standard metric, or measurement, called cost-to-fill. The costs-to-fill are the cumulative total of costs associated with recruiting, such as time dedicated to sourcing, sifting through resumes, and interviewing as well as direct costs associated with travel, relocation, costs of employment advertising, and onboarding. In addition to this, one must consider the cost of the vacancy itself. When a job is vacant, either someone needs to pick up that slack in the form of more expensive overtime or the vacancy simply results in additional losses in revenue. In short, vacancies are expensive.
No matter how you slice it, the key to bringing down costs-to-fill is automation. If healthcare providers want to survive, even thrive, they must eliminate the inefficiencies associated with humans performing processes that can be easily automated such as sifting through hundreds, even thousands of resumes to identify the a particular skill set. Unfortunately, healthcare has always been notoriously slow in terms of adopting information technology. The growing acceptance of electronic medical records, however, does seem to indicate that healthcare is beginning to warm up to technology. Still, automating processes in order to create efficiency does not end in the exam room.
Automation through recruitment technology is the key to reducing recruitment’s cost-to-fill. For example, automated candidate screening reduces the number of unqualified candidates that a recruiter reviews in order to find those that meet the organization’s needs. Other features include social recruitment and automated job board posting to healthcare specific job boards that broaden and target the recruiter’s reach. At the same time, recruitment technology facilitates and streamlines the communication between recruiters, candidates, and hiring managers. The combination of broad, yet targeted reach through employment advertising and improved communications ultimately reduces time-to-fill, which subsequently impacts cost-to-fill.
Gone are the days when email folders and filing cabinets could be considered as viable systems for searching and screening candidates. Operational efficiency is among the best ways to improve an organization’s bottom line and remain competitive. Manual recruitment techniques, filled with high resume volumes and no effective way to accept, review, and manage those resumes is a dangerous inefficiency. Without recruitment technology in place, a healthcare organization cannot maximize human capital efficiency.
If you would like to dive deeper into this topic to learn about the costs associated with manual processes and the return on investment associated with automation, download our Free Whitepaper titled: Healthcare Recruitment: Facing the Sequester.