Nurses are quitting in droves and it’s costing hospitals a fortune. The “2022 NSI National Health Care Retention & RN Staffing Report” shows astoundingly high turnover rates for 2021. Over the past five years, the average hospital has turned over 100.5% of its total workforce and 95.7% of its RN staff. This trend has increased staffing costs for companies, while disrupting the continuity of care.
According to the report, hospitals lost 2.47% of their overall RN workforce in 2021. The current turnover rate for RNs stands at 27.1%, an 8.4% increase from the year before. Nurses in surgical services, women’s health, and pediatrics had the lowest turnover rates, while nurses in step down, telemetry, and emergency services had the highest turnover rates.
“The cost of turnover can have a profound impact on diminishing hospital margins and needs to be managed,” the report reads. “According to the survey, the average cost of turnover for a bedside RN is $46,100 resulting in the average hospital losing between $5.2m – $9.0m. Each percent change in RN turnover will cost/save the average hospital an additional $262,300/yr.”
Overall, the average hospital lost $7.1 million to additional turnover costs in 2021.
The average facility loses between $5.2 million and $9 million on RN turnover every year.
The average turnover cost per RN for 2021 was $46,100, a 15% increase from the year before.
Hospitals can do more to increase their retention rates. The report shows that while a majority (72.6%) of hospitals have a formal nurse retention strategy, less than half of those (44.5%) have a measurable goal.
Travel nurses and staffing agencies contribute to high turnover rates. Hospitals can reduce staffing costs by reducing their dependency on these agencies, the report says, but only 22% of hospitals said they anticipate being able to do so in the years to come.
“When the labor market tightens, hospitals bridge the gap by authorizing overtime and critical staffing pay, by increasing travel staff usage, and by flexing their internal staffing pool,” the authors note. “All of which are costly strategies, especially when travel rates average $154/hr. and range to $225/hr.”
So, why are so many hospitals having so much trouble getting their nurses to stay?
Many senior nurses are choosing to retire early. Retirement is the fourth-most cited reason RNs leave their jobs. It is expected to be a main driver of RN turnover through 2030. More hospitals are focusing on retaining senior staff members. Today, 52.8 % of hospitals have a strategy to retain senior nurses, compared to just 21.8% in 2018.
Hospitals are having trouble retaining new nurses as well. Around a third of all newly hired RNs left their jobs within the first year. This kind of turnover represented 27.7% of all RN separations in 2021.
Nurses that work in ERs and operating rooms tend to be the hardest to recruit and retain, while nurses who work in pediatrics tend to be the easiest.
The authors urge hospitals to reign in their staffing costs by retaining the staff they have and limiting their use of third-party staffing agencies.
“To strengthen the bottom line, hospitals need to build retention capacity, manage vacancy rates, bolster recruitment initiatives and control labor expenses. Building and retaining a quality workforce is paramount to navigate the shifting paradigm.”
