By Matthew Hamilton, for HealthLeaders.com, June 5, 2002( Free Subscription required).http://www.healthleaders.com/news/print.php?contentid=35106The nursing shortage problem has continued to devastate labor budgets all around the world. While there are many theories as to why hospitals and other medical providers cannot maintain an appropriate level of staff nurses, the overall demand for nurses will continue to grow. Yet the supply of competent nurses will not ascend to the predicted levels needed to replace the accelerated attrition within the field. The demographics of turnoverIn our effort to dramatically decrease our use of contract labor, we discovered that the population age 65 years and older will double during the period between 2000 and 2030. Conversely, the number of women between 25 and 54 years of age who form the core of the nursing workforce will remain relatively constant. Thus, the majority of providers who require registered nurses to make up of the bulk of their staffing are likely to continue incurring exorbitant agency fees. For that reason, all providers must find organic solutions to this labor problem, and quickly. In an effort to step out of the paradigm, we sought recent studies that identified the exact relationship between job dissatisfaction and connecting staff attrition. Specifically, we analyzed individual specific vectors such as work-values, absolute wage, job characteristics, employer characteristics, number of hours worked and shift times.Of course, we discovered numerous articles that have suggested that the problems of retention and recruitment are complex and labor-behavior contingent. Given that spending hundreds of thousands of dollars on marketing, sign-on bonuses and international recruiting is proving to be cost-prohibitive and ultimately counterproductive, perhaps it would be prudent for a hospital to develop a statistical model of why nurses quit. Such a model would identify those nurses already on staff that are strong candidates for resigning. Many cross-sectional studies have clearly identified job satisfaction as one of the most reliable predictors of resignation probablity, especially as it relates to the correlation between absenteeism and subsequent resignations. Specifically, job satisfaction and subsequent behavior, (retention or resignation) provides a greater tool to explain labor market behavior. The relationship between the two appear to be mutually inclusive. A thorough examination should focus on personal characteristics such as marital status, age, education, gender, race and children. Also, keep in mind that these employees have already been hired. Thus, greater emphases should be placed on age and gender. The relative significance is that each group will have very different life issues, and these disparate individualities may or may not cross over from one group to the next. This is very important, as nearly two thirds of all nurses were more than 40 years old in 2000 (Fitch, Ibca, Duff and Phelps, 2001). Another consideration should be a "settlement factor." This factor is the calculation of all employees still on payroll for over a one-year period minus all of the new hires. Furthermore, the demographic data from the employees that terminated can also be compared and contrasted with any available exit interview data. In addition, this factor can be used to quickly compute all of the dollars that have been allocated to bringing in new people, which subsequently allows for the use of "pattern hunting." By drilling down into the scattered variables, which make up an individual's reason, or reasons for termination, these indicators can then be used as the drivers for your model. This information can now be compared with the employees that have remained with the company for particular blocks of time, such as one year, five years and so forth. Why do this? Historically, even with the myriad of employer-sponsored hiring selection processes, new training techniques, motivational speakers and the like, it still appears that there will always be a core of employees that will leave no matter what interventions are engaged. And, conversely, there is a core of employees that will remain loyal to the firm regardless of the retention mechanism employed. Hence, as many nurse managers and administrators already know, the shortage has dramatically increased workloads and has adversely affected the attitudes of the nurses that have been with the facility for more than one year. Again, it is extremely important to be able to monitor these "settled" nurses for signs of termination contingencies and behavior. And, as for the new hires, various statistics indicate that many of these nurses are at their critical point during the first three months of employment and will generally resign within 90 days of their start date. And so, depending on the institution's new hire retention rate, this number can exceed more than 65% of a new orientation group within the first year of employment. Unfortunately, the reason for termination is usually discovered after the employee has decided to resign. Therefore, in an effort to be really proactive, we found that management must have provisions in place to begin an immediate "rescue" of an employee that may be at risk of terminating his or her employment. Where to beginYou should observe many key job-related characteristics. For example, consider non-preferred shift pattern choice, undertaking tasks that are below their grade, mentor of student or beginning nurses. Many nurses believe that their current grade is not a fair reflection of their present undertakings. A comprehensive study undertaken by the British National Health Service reported that just more than 96% of nurses reported entering the nursing profession in search of 'rewarding work', 87.5% for 'job security' reasons, 84.4% in order to 'help others in the community,' 76.3% for 'promotion prospects,' 65.5% for 'pay' and 47.7% for 'flexibility of working hours' (Shields and Ward, 2000). Thus, an employee who reports a high level of job satisfaction has successfully integrated his or her lifestyle within the company's operating environment, including its support structure. It would be evident that this employee has "settled" and is replete in his or her job. This employee may have had socioeconomic, geographic, and perhaps emotional difficulties sometime during their career, and that for whatever reasons, these issues have been satisfactorily resolved with or without the employers' direct intervention. Accordingly, it would be advantageous to pursue these elements of job satisfaction quite robustly. We must also assume that the reasons for quitting are pre-determined and exogenous to these values. A nurses' reflection of work therefore will be either pecuniary or non-pecuniary. ConclusionSo, in other words, money is important. However, helping others or a rewarding work environment can be equally important. In view of that fact, should your facility's statistics identify that non-pecuniary reasons for quitting are the major factor in turnover, then more money will not retain nurses in your facility. More importantly, it appears that nurses who report overall dissatisfaction with their jobs have a 65% higher probability of intending to quit than those reporting to be satisfied. Yet dissatisfaction with promotion and training opportunities have a stronger impact than workload or pay. In addition, the BNHS study suggests that policies that focus heavily on improving the pay of all BNHS nurses will only have limited success unless they are accompanied by improved promotion and training opportunities (Shields and Ward, et al., 2000). This is the reason that each provider must identify the specific underlying issues for their turnover and begin to actively identify those employees who may not "settle." ReferencesFitch, Ibca, Duff & Phelps, June 27, 2001, pg.2.Shields, M & Ward, M., 2000. Improving Nurse Retention in the British National Health Services: The Impact of Job Satisfaction on Intentions to Quit. pg. 8.--------------------------------------------------------------------------------Matthew Hamilton, MBA is a Finance Manager with Kindred Healthcare Inc., (http://www.KindredHealthcare.com) a national provider of healthcare services. He can be reached at 201-392-3543 or by e-mail at firstname.lastname@example.org.