Healthcare Recruitment: Facing the Sequester Slash Costs and Cost-to-Fill
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1 Healthcare Recruitment: Facing the Sequester Slash Costs and Cost-to-Fill
2 The healthcare industry is facing significant challenges in light of Medicare reimbursement cuts resulting from the Federal Sequester. The Federal Sequester refers to automatic government spending cuts put into law under the Budget Control Act in The Act was implemented simultaneously to an increase in the debt ceiling as a means of pressuring Congress to implement measures that would result in long-term deficit reduction. At the time, it was not intended to come to fruition. Unfortunately, in March 2013, when Congress failed to reach a consensus on spending and debt reduction, the automatic spending cuts were implemented, resulting in cuts to government sponsored programs such as Medicare. More and more healthcare organizations are recognizing the need to streamline processes and cut costs. One way to do this is automation through technology. Unfortunately, the challenge for many organizations is justifying the technology investment and displaying the return-on-investment. The following touches on these obstacles and show s how recruitment technology can help streamline processes and slash your cost-to-fill. Challenges Faced by Healthcare Recruiters Recruiting Costs Recruiting and retaining quality healthcare workers is a challenging and, therefore, expensive undertaking. For the last several years, Pay-for-Performance, Meaningful Use, and healthcare reform have dominated Chief Financial Officers (CFO) watch list as potentially impacting healthcare organizations bottom lines. Many will argue, however, that while these concerns are considerable and ongoing, the recent Medicare reimbursement cuts resulting from the Federal Sequester in has CFOs in a panic. 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 include other healthcare vendors, such as suppliers and IT providers 2. Additionally, at a time when healthcare reform hurtles forward, an estimated 32 million new patients will have access to health insurance and start seeking treatment by 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. With this in mind, it s no wonder that CFOs are worried. Every department, in every healthcare organization, will be required to cut costs. Recruiting is no exception. For recruiters, the first thing to consider reducing is cost-to-fill. Many factors contribute to cost-to-fill, including: Recruiting time (sourcing, sifting through resumes, interviewing) Direct recruiting expenses (travel, lodging, relocation, if applicable) Costs of employment advertising (job board posting)
3 Lost revenue as the result of a vacancy Next, let s see how this translates to costs for a sample company with 200 employees. Sample Company Profile Sample Company Revenue $25,000,000 Annual # of Employees in the Company 200 Recruiting Efforts for One (1) Job Cost of Employment Advertising $500 Resume's Received, Sorted, & Reviewed (200 resumes at Hours minutes per resume review) Recruiter Cost Per Hour ($45k + benefits) Hour Recruiting for 1 Job Total $ Interviews Costs Phone Screens (15 phone screens at 30 minutes each) 7.5 Hours # of 1 hour Face-to-Face Interviews - Recruiter 5 Hours # of 1 hour Face-to-Face Interviews - Hiring Manager 5 Hours Hiring Manager Cost Per Hour ($100K salary + benefits) Hours Recruiter Cost Per Hour ($45k + benefits) Hours Interviews Costs Total $ Lost Revenue from Vacancy Average Revenue per Employee per Day (calculated total annual revenue/# of employees/average 220 work days) $ Per Day Average time to fill 30 Days Lost Revenue from Vacancy Total $17, Minimum Total Costs (excluding travel expenses and onboarding) $18, Per Hire As you can see, the minimum total cost of a vacancy that takes 30 days to fill is $18, Again, it is important to note that these are only a sampling of the costs. Other costs, not included here, may include interview travel, transportation, and lodging, as well as relocation, onboarding, and training for the new hire. Clearly, considering the financial challenges healthcare is already experiencing, hiring costs can become unsustainable. Automation through recruitment technology is the key to reducing 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
4 and improved communications ultimately reduces time-to-fill, which subsequently impacts cost-to-fill. That said, let s continue on to drill down in to some of the processes where dramatic improvements can be achieved. Applicant Tracking In healthcare, cost reduction is mandatory if your organization is to remain afloat. Gone are the days when 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 an applicant tracking system in place, a healthcare organization cannot maximize human capital efficiency. Using a recruitment technology, HR professionals in healthcare can streamline recruiting efforts through automation and cost-efficient processes. Some primary benefits of an applicant tracking system (ATS) include electronically filtering and screening candidates, managing all open requisitions, sorting applications, tracking resumes, and automating communications between recruiters, candidates, and hiring managers. A technology will also store all candidate information, compliance forms, background checks, references, and offer letters in one centralized database. Sourcing Considering the bulk of recruitment costs can be attributed to lost revenue from a vacant position, sourcing candidates in order to speed time-to-fill is no longer a question of value. Recruiters must constantly and proactively develop a pool of warm, qualified candidates from which they can draw when the need arises.. Once you find these candidates, you must engage them, network with them, and educate them on your employment brand. In this day and age, few people will turn down an opportunity to network with those who have the ability to further their career. To improve sourcing and speeding up time-to-fill, recruiters are starting to view sourcing through a marketing lens. For years, sales and marketing professionals have used CRM software (Customer Relationship Management) to build and nurture relationships with sales prospects. Now, just like sales and marketing professionals, recruitment professionals need to build and nurture candidate relationships with the help of a Talent CRM (Candidate Relationship Management). As today s recruiters struggle to hire the best candidates, recruiters are turning into marketing professionals as they sell their company s employment brand in an attempt to attract the best talent. Onboarding New-Hires Automation should not stop after the candidate has accepted the job offer. Onboarding plays an important part in fostering new-hire productivity; and for healthcare organizations that are often plagued with lengthy onboarding processes, new hire engagement and productivity remains a challenge. Many of the most successful organizations have automated their onboarding programs to streamline operations and increase return-on-investment. The software used to automate onboarding programs helps to reduce costs, while improving employee retention and productivity in the long run.
5 For example, an automated onboarding program eliminates reliance on paper documents through an onboarding portal, a comprehensive and easily accessible location to store the documents necessary for the entire onboarding process. This gives new hires the opportunity to access information when they need it, placing critical documents at their fingertips even before their first day of work. In addition to this, automated onboarding programs provide companies with many qualitative benefits, such as: Improved New Hire Engagement: Tailoring the new hire experience to the employee s job, department, location, etc. helps new hires acclimate to the corporate culture and procedures early. Fully branded New Hire onboarding Portals allow for streamlined communication of company benefits and business objectives engaging employees in the business before they start working. Enhanced Human Resources (HR) Productivity: Automation streamlines processes, helping the HR department to regain productivity, and eliminate oversights. Reporting and metrics give HR a direct view into tasks that require completion and bridges the gap between departments involved in the onboarding process. Increased New Hire Productivity: New employees are able to hit the ground running on day one with early exposure to important information and the opportunity to complete paperwork online. Increased Retention Rates: Task management tools help to ensure new hires are equipped with the tools needed to succeed. Provide a window into your culture, assuring new hires feel they are a part of the larger organization. Task Management and Process Improvement: Using system reporting capabilities, users can generate reports that expose bottlenecks in key processes. This allows users to measure key performance indicators (KPIs), ensure important elements are not missed while identifying areas that may benefit from process improvement. Leaders in healthcare invest in onboarding programs to ensure the retention of top talent, while decreasing the new hire s time-to-productivity. The Healthcare Recruitment Technology Checklist For healthcare organizations serious about cutting costs, you can use the following check list to find the right talent acquisition technology for your healthcare organization. Support The most essential element in ensuring a company has an ideal customer experience is support. A superior vendor will offer a product expert to work directly with the recruiter to ensure that the first, critical phase (software implementation) is handled professionally, on time, and to the client s satisfaction. After implementation, a team member (accustomed to the organization s unique business needs) should be readily available to oversee the account with a single goal in mind: 100% Customer Satisfaction. The final tier should include a support expert, available 24 hours a day, Monday through Friday,
6 to answer any questions and concerns. Ability to Grow One of the defining characteristics of any type of business is its likelihood to expand. Naturally, an HR professional would want the vendor of choice to do the same. The ability for the talent acquisition system to grow as the company expands is one of the most crucial decision making elements. Look for a technology that provides inherent scalability where a professional can easily enhance the HR software without purchasing, implementing, or training users on additional or new systems. The right system will not require recruiters to buy additional modules, migrate to new databases, or pay premium prices for customer support if the business expands. Ease of Use Having a system that is easy to use is a cornerstone of all products. What good is a software solution if it s too difficult to use? Having an easy-to-use solution is key to user adoption. While it s easy for any vendor to claim that their platform is easy to use, take a look at some other indicators. Has the company won any awards for the ease of use of their platform? How s their customer satisfaction rating? What about their client retention rate? Many vendors will also include case studies featuring customer success stories. Take a look at these and see what other energy organizations are saying about the system. Speed and Security Talent acquisition software is only as effective as the ability to have 24/7/365 access to it. Find the system availability statistics on the vendor s website an ideal system will offer near perfect rates. Moreover, a recruitment technology should constantly be enhancing the way data is accessed and delivered to its endusers, thus, the vendor should be improving delivery options upon each new release. In addition, healthcare professionals can greatly benefit from a platform that operates via Software-as-a-Service (SaaS). Advantages include no installations, complimentary product maintenance, free upgrades, and more. Data security is a vital component to any successful outsourced application hosting service. Look for HR software that securely stores information remotely as well as backs up all of its data daily as part of a protocol for disaster recovery. Value When considering a recruitment technology, a crucial deciding factor can be the price-to-value ratio. With an automated process, users can obtain up to a 71% decrease in cost-per-hire and a 65% decrease in time-to-fill for the critical positions. To ensure the best ROI and perfect fit for a company, it is critical to consider the importance of the following attributes: Choosing recruitment technology that operates on a single-platform is one of the most valuable, cost efficient decisions a company can make. A one-stop solution that enables the management of the entire candidate lifecycle through one singlesource solution eliminates the need for companies to ever purchase and maintain multiple recruitment solutions. Look for scalable software that can be configured according to the company s
7 unique hiring management processes as well as capable of accommodating evolving needs as the organization expands or processes change. These attributes will ultimately provide a greater value to your companies needs. As we ve mentioned before, customer support is important for recruitment software. When combined with the convenience of a single platform as well as software s inherent scalability and configurability, it creates an overwhelming value for a company. Therefore, avoid software that offers customer support at different levels for different prices. No organization should be considered less than, or have to pay a premium price for customer support as the company expands. When these three fundamentals are offered from one vendor, they create an ultimate added value to a recruitment technology. How icims Can Help icims is a leading provider of talent acquisition software, as well as a global leader of human resources technology. With thousands of clients worldwide, icims has clients in all industries and of all sizes, with the healthcare industry being one of their fastest-growing clientele groups. A few clients include: Bayada Nurses, Hospital for Special Surgery, Valor Healthcare, and Florida Medical Clinic. icims key differentiator is their easy-to-use software and commitment to customer service and the customer experience. icims is extremely proud of their 4-yearrunning 97% customer satisfaction and renewal rating. Our award-wining customer experience is a result of advanced support offerings, which include a multi-tiered customer support team, frequent virtual and on-site training, and our interactive Customer Care Site. To learn more about the icims Talent Platform, call or watch a quick product video here:
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