How To Calculate Annualizing
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1 Part III: Tools to Analyze Financial Operations CHAPTER 8: STAFFING: THE MANAGER S RESPONSIBILITY
2 Staffing Requirements In Health Care, many positions Must be filled, or covered, 7 days a week, and Must also be filled, or covered, 24 hours a day.
3 Productive and Non-Productive Time Why analyzed? Employees are paid for more hours than the hours they are on duty (vacation days, etc.), so Annualizing allows the full cost of the position to be computed through a burden approach.
4 FTEs for Annualizing Staff Positions Productive Time Represents the employee s net hours on duty. Non-Productive Time Represents the paid-for time when the employee is not on duty (such as vacation time).
5 FTEs for Annualizing Staff Positions FTE Definition for purposes of understanding annualizing positions: The equivalent of one full-time employee paid for one year, including both productive and nonproductive time. Two employees working half-time for one year would be the same as one FTE.
6 FTEs for Annualizing Staff Positions The calculations to annualize staff positions is a two-step process: 1. Compute the net days worked. 2. Convert the net paid days worked to a factor. See Exhibit 8-2 as an example.
7 Number of Employees Required to Fill a Position Why calculate by position? Because computing by position is used in controlling, planning and decision-making. The scheduled position method is often used when forecasting new programs and services. You will also find scheduling software using this method.
8 Number of Employees Required to Fill a Position FTE definition for purposes of filling a scheduled position: A factor expressing the number of employees required measured against, or the equivalent of, one full-time employee s standard work week.
9 Number of Employees Required to Fill a Position The calculation to fill scheduled positions is as follows: Compute the number of hours for a full-time position filled for one year. This measure is the baseline. Compute a factor representing the position to be filled for the required number of days (a required seven-day week to cover, for example, versus a five-day work week equals a factor of 1.4). See the cast room example in the chapter.
10 Tying Cost to Staffing In the case of the annualizing method the cost of nonproductive days is already in the formula. So, multiply the factor times the base hourly rate to compute cost. Study the example in the chapter.
11 Tying Cost to Staffing In the case of the scheduled position method the base rate must be increased, or burdened, by the nonproductive time. First, increase the hourly base rate by a percent or factor that represents the nonproductive time. Then multiply the burdened based rate by the factor to compute the cost. Then, multiply the factor times the base hourly rate to compute the cost. Examine the examples in the chapter.
12 Tying Cost to Staffing The actual cost is attached to staffing in the books and records, though. A subsidiary journal and a basic transaction record (both of which are described in the previous chapter). Study the examples shown in the chapter.
13 Subacute Unit Master Staffing Plan Staffing for Eight-Hour Nursing Hour Day + Evening + Night = Staff Total RN LPN NA
14 Calculation for Annualizing Master Staffing Plan Example Step 1: Compute Net Paid Days Worked RN LPN NA Total Days in Business Year Less two days off per Week Number of Paid Days per Year Less Paid Days Not Worked: Holidays Sick Days Vacation Days Education Days Net Paid Days Worked
15 Calculation for Annualizing Master Staffing Plan: Example Step 2: Converting Net Paid Days Worked to a Factor RN = LPN = NA =
16 FTEs to Annualize Staffing: Practice 1. Compute Net Paid Days Worked Total days in business year Less two days off per week Number paid days per year Less paid days not worked Holidays 8 Sick days 5 Education days 1 Vacation days 5 Net paid days worked Convert Net Paid Days Worked to a Factor. Total days in business year divided by net paid days worked equals factor 364/241 =
17 FTEs to Annualize Staffing: Assignment Compute Net Paid Days Worked Laboratory Medical Records Total Days in Business Year Less Two Days off Per Week Number of Paid Days Per Year Less Paid days Not Worked Holidays Sick Days Education Days Vacation Days Personal Leave Days Net Paid Days Worked Covert Net Paid Days Worked to a Factor: For the Lab. Total days in business year divided by net paid days worked = factor 364/226 = For Medical Records Total days in business year divided by net paid days worked = factor 364/230 =
18 FTEs to Fill Position: Example 8 Hour Emergency Department Scheduling for Eight-Hour s: One Day Two Evening Three Night = 24-Hour Scheduling Total Position: Emergency Room Intake = Three Eight Hour s Staff needed to cover position 7/ = 4.2 FTEs One full time employee works 40 hours per week. One eight-hour shift per day times seven days per week equals 56 hours on duty. Therefore, to cover seven days or 56 hours requires 1.4 times a 40 hour employee.
19 FTEs to Fill a Position: Practice 8 Hour Scheduling for Eight-Hour s: One Two Three Day Evening Night = 24-Hour Scheduling Total Position: Admissions Officer = Four Eight Hour s FTEs to cover position equals = 5.6 Position Clerical = One Eight Hour FTEs to cover position equals = 1.4
20 FTEs to Fill a Position: Assignment 8 Hour Scheduling for Eight-Hour s: One Day Two Evening Three Night = FTEs Seven Day Week Position: Nursing Supervisor Technician Nurses Clerical Aides = Total FTEs needed to cover all shifts 25.2
21 FTEs to Fill a Position: Example 12 Hour Emergency Department Scheduling for Twelve-Hour s: 36 Hour Week One Two = 24-Hour Scheduling Total Position: Emergency Room Intake 1 1 = Two Twelve Hour s Staff needed to cover position 7/ = 4.66 FTEs One full time employee works 36 hours per week. One twelve-hour shift per day times seven days per week equals 84 hours on duty. Therefore, to cover seven days or 84 hours requires 2.33 times a 36 hour employee.
22 FTEs to Fill a Position: Assignment 12 Hour Scheduling for Twelve-Hour s: 36 Hour Week Position: Nursing Supervisor Technician Nurses Clerical Aides One Two = FTEs Seven Day Week = Total FTEs needed to cover all shifts 31.75
23 FTEs to Fill a Position: Example 12 Hour Emergency Department Scheduling for Twelve-Hour s: 48 Hour Week One Two = 24-Hour Scheduling Total Position: Emergency Room Intake 1 1 = Two Twelve Hour s Staff needed to cover position 7/ = 3.5 FTEs One full time employee works 48 hours per week. One twelve-hour shift per day times seven days per week equals 84 hours on duty. Therefore, to cover seven days or 84 hours requires 1.75 times a 48 hour employee.
24 FTEs to Fill a Position: Assignment 12 Hour Scheduling for Twelve-Hour s: 36 Hour Week One Two = FTEs Seven Day Week Position: Nursing Supervisor Technician Nurses Clerical Aides = Total FTEs needed to cover all shifts 24.73
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