TALENT ACQUISITION MAKING THE BUSINESS CASE FOR INCREASED RECRUITMENT INVESTMENT

Transcription

1 TALENT ACQUISITION MAKING THE BUSINESS CASE FOR INCREASED RECRUITMENT INVESTMENT David Szary, Sr. Vice President and General Manager, Recruiting Services Lean Human Capital by HealthcareSource The HealthcareSource User Conference November 6-9, 2016 JW MARRIOTT WASHINGTON, DC

2 JOIN THE CONVERSATION Be sure to tweet and post what you ve learned in this presentation! #TalentSymposium16 Attendees that are active on social media will be entered to win FUN prizes during the conference!

3 DAVID SZARY Fell into recruiting in 1989! First half of career, recruited (and managed teams) in high tech industry for a publicly-held high-growth IT Service provider In 1997, founded The RIO Group ( & The Recruiter Academy ( In 2009 founded Lean Human Capital ( combining The Recruiter Academy educational solution with analytic and process optimization best practices Has worked with over 10,000 recruiters from thousands of companies across the entire United States, Canada, South America, Europe, Asia and the Middle East, including some of the most respected organizations in the world Unique opportunity to work with recruiters and recruitment organizations performing in all types of market conditions within all major industries Creator of the Healthcare Recruitment Metrics Benchmark Study, with over 800 hospitals from over 200 different organizations participating over the last six years!

4 FOUNDATION OF OUR RESEARCH/INTELLIGENCE Lean Human Capital Healthcare Community Recruitment Metrics Benchmark Study 800+ hospitals have participated in our Healthcare Recruitment Metrics Benchmark Study over the last 7 years.

5 COMMUNITY BENCHMARK STUDY PARTICIPANTS

6 AGENDA Market Conditions Mixed Signals? Making a Business Case for Increase Investment in Recruitment

7 MARKET CONDITIONS

8 MARKET DRIVERS IMPACTING RECRUITING Year over year change (in millions) 808 1,023 Open Jobs; +26.6% growth Hires; -2.5% decline Separations; 0.0% change BLS:

9 THE INCREASING DEMAND FOR WORKERS By 2020: - 1 million new jobs in home health and personal care aids - 40% increase in physical therapy assistants and aids - 400,000 LPNs and 500,000 new medical secretaries By 2022: - Over 1 million openings for nurses by 2022 (19% are RNs) Supply - AACN reported only a 2.6% enrollment increase in entry level nursing programs - Nursing/medical school enrollment isn t growing fast enough to meet demand - Almost 700,000 nurses are projected to retire by Physician shortage is projected to reach 90,000 by 2025

10 HEALTHCARE RECRUITMENT 2017 THIS IS NO PLACE FOR A NERVOUS PERSON... - MICKEY REDMOND

11 MIXED SIGNALS? INVESTMENT IN RECRUITMENT What HR and Talent Acquisition Leaders Say*: - 83% - Talent is #1 priority at their company - 83% - They meet with the C-suite Regularly - 75% - Team is key to the company s workforce planning * Source: LinkedIn Global Recruiting Trends

12 MIXED SIGNALS? INVESTMENT IN RECRUITMENT What the C-Suite is saying... Why can t we be more like Google? We are caregivers... and caregiving is all about the people.

13 INVESTMENT COMPARISON BY INDUSTRY Cost Per Hire Analysis Recruitment Cost Ratio $10,000 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 $4,323 $4,300 $4,325 $3,033 $1,065 $627 30% 25% 20% 15% 10% 5% 0% 25% 7.50% 8.0% 6.7% 5.7% 6.2% 4.7% 2.7% 1.5% Observations: - Compared to other industries, healthcare organization investment in recruitment is very low. - Top performing organizations are investment more money in Recruitment*. - When you compare healthcare RCR (1.5%) to other industries and/or the cost of an RPO (5-10%) or search firm (20-30%), we believe internal recruitment teams perform well considering the lack of capital investment.

14 INVESTMENT IN RECRUITMENT IMPACT ON PERFORMANCE INVESTMENT IN RECRUITMENT IN HEALTHCARE... MY ANALOGY RUNNING A MARATHON ON ONLY 500 CALORIES...

15 INVESTMENT COMPARISON IMPACT ON PERFORMANCE Cost Observations: - Increased capital investment in recruitment correlates to reduction in New Hire Turnover and TTF. Cost Per Hire $3,258 Cost Per Hire $6,465 Cost Per Hire $606 Cost Per Hire $903 Source: Bersin by Deloitte & Lean Human Capital

16 MAKING THE BUSINESS CASE FOR INCREASED INVESTMENT 1. Understand what is important to them 2. Use Data/Fact to quantify the issue and/or need based on what is important to them. 3. Quantify what you need to improve performance 4. Quantify Expected ROI 5. Track Results

17 MAKING THE BUSINESS CASE FOR INCREASED INVESTMENT Metrics are Meaningless, What You Do with Them is Priceless! -David Szary Without data you re just another person with an opinion -W. Edwards Deming

18 WHAT IS IMPORTANT TO OUR CUSTOMERS? What do Hiring Managers and key stakeholders expect from you?

19 MAKE A BUSINESS CASE BASED ON WHAT IS IMPORTANT TO THE CUSTOMER CRITICAL VOC PERFORMANCE DIMENSIONS Cost Responsiveness and Speed Efficiency and Productivity Quality of Service Quality of Hire

20 WHAT IS IMPORTANT TO OUR CUSTOMERS! Responsiveness and Speed Quality of Hire Cost Quality Service/Customer Satisfaction Process Efficiency Staff Productivity

21 RESPONSIVENESS/SPEED Why Is Speed So Important?

22 IMPACT SPEED HAS ON THE ORGANIZATION Why reduce the time to hire and onboard a new employee? Patient Safety/Satisfaction Employee Morale/Engagement Improve Customer Satisfaction (hiring manager, new hire, non-hired). Revenue lost from not being able to provide patient services. Reduce Cost of Vacancy! Reduce Turnover (and cost associated with it)

23 STRUCTURAL FLAW IN ORGANIZATIONAL MODEL 2016 BENCHMARK DATA MEDIAN (TOP 25%) 72% (77%) < 60 Days Ave TTF CDVs 28% (23%) 60 Days 23 (21) days 47 (43) days 116 (113) days Zero hours outbound sourcing required per candidate routed to HM Optimum Openings per Recruite: hours sourcing per candidate routed to HM for consideration Organizations underestimate time to outbound source and pipeline candidates for difficult to fill positions. Almost 3 of every 10 positions take on average 116 (Top 25% is 113) days to fill. These positions have a significant negative impact on cost of vacancy, patient safety/experience, clinical outcomes and employee engagement.

24 REDUCING TTF & ELIMINATING INVENTORY - CDV REQUISITIONS Requisition/ Position Control 5-15% Process/Position Management(s) 10-25% Lack of Qualified Candidates 60-85%

25 HOW TO QUANTIFY THE # OF RESOURCES TO MEET HIRING DEMAND STAFFING OPTIMIZATION ANALYSIS CASE STUDY Process Efficiency Metrics BAU (70%) CDV (30%) # of candidates Routed to fill one position % of candidates Routed that are interviewed by Hiring Manager 100% 100% % of candidates that are hired who are extended offers 89.0% 89.0% Recruitment Process Time Study BAU (70%) CDV (30%) # of Hours for Each Category # of Hours Needed per Hire # of Hours for Each Category # of Hours Needed per Hire Time spent sourcing, pre-qualifying and routing a single candidate to the hiring manager Time spent managing the hiring manager interview process (setting up interview, getting feedback, etc.) for each interviewee Time spent developing/delivering offer, receiving feedback, etc. for each offeree Time spent pre-boarding candidate (paperwork, credentialing, keeping candidate warm, etc.) for each hire Total Recruitment Process Hours to Hire 1 Candidate Administrative Process Time Study BAU (70%) CDV (30%) # of Hours for Each Category # of Hours Needed per Hire # of Hours for Each Category # of Hours Needed per Hire Time spent managing the hiring manager interview process (setting up interview, getting feedback, etc.) for each interviewee Time spent pre-boarding candidate (paperwork, credentialing, keeping candidate warm, etc.) for each hire Total Administrative Time to Hire 1 Candidate Recruitment Resource Planning/Allocation SLA Days 365 SLA Days 365 BAU (70%) CDV (30%) Estimate Current Staff # of Hires 3,058 1,311 # of Sourcing/Pre Qual/Routing Hours Required 6,881 27, # of Interview/Offer/Hire Process Hours Required 4,012 4,422 Total Recruitment Process Hours 10,893 31,946 # of FTE Recruiters Required to Meet Hiring Objectives

26 STAFFING OPTIMIZATION ANALYSIS CASE STUDY Approximate # of outbound sourcing hours to meet hiring demand and fill positions in 27 days: - 27,525 hours Currently Recruitment team is sourcing approximately 3,600 hours per year: - 15 recruiter x 5 hours week x 48 weeks

27 COST OF VACANCY IMPACT AGENCY AND PREMIUM PAY CASE STUDY Projected FY2016 Annualized Gross Costs DIRECT CARE RNs Net Cost DIRECT CARE RNs (50% Premium for OT: 25% Premium for Agency) Annualized Net Cost DIRECT CARE RNs Overtime $37,906,873 $ 12,635,624 $ 12,635,624 Agency $14,291,310 $ 2,858,262 $ 2,858,262 Totals $ 15,493,886 Non Nursing - Projected FY2016 Annualized Gross Costs Net Cost (50% Premium for OT) Annualized Net Cost 2016 Overtime $46,745,598 $ 15,581,866 $ 15,581,866 Average Direct Care RN Net Cost of Vacancy per 12 hour shift: $178

28 QUALITY METRICS Quality hires drives HCAPHS!

29 IMPACT OF PATIENT-CARE ON FINANCIALS Quality Improvements and Patient Satisfaction As of 2016, 1.75% of Medicare reimbursements are at stake HCAHPS 25% Clinical Process 10% In 2017, it will be 2% at stake Core Measures 75% Outcomes 40% Efficiency 25%

30 RECRUITMENT TRANSFORMATION JOURNEY 1.0 QUANTIFYING ROI

31 INVESTMENT IN SOURCING TO REDUCE COST OF VACANCY - CASE STUDY LHC Cost of Vacancy Analysis Investment in 2 Sourcing FTE s (150k) Daily Cost of Vacancy (EXAMPLE DATA) Hard Cost Productivity Lost Overall Cost Direct Care RN OT $274 $0 $274 Direct Care RN Agency $219 $131 $350 Direct Care RN PD $9 $0 $9 Blended Daily Cost of Vacancy ($274 + $350 + $9) = $211 $211 # of Direct Care RN positions filled in MORE than 60 days (2013) 240 Average TTF for positions filled in MORE than 60 days (2013) 136 Total COV (assuming vacancy) $6,887,040 Average TTF Reduced by 25% New Average TTF moving forward 102 Total COV $5,165,280 Cost Savings!!! $1,721,760

32 INVESTING IN RECRUITMENT TO REDUCE DIRECT COST OF TURNOVER - CASE STUDY Assumptions Case Study % 1166 # of external new employees hired (projected for CY2015) 5800 Turnover % 20.1% Total number of replacement employees 1166 Average annual compensation $ 57,000 Average tax and benefit cost as % of salary (25% is average) 25% Average loaded hourly admin labor costs $ 19 Average loaded hourly HR/recruiter labor costs $ 45 Average loaded hourly hiring manager labor costs $ 60 Average time spent by HR manager for exit interviews 0 Average time spent by admin for termination processing 120 Separation pay (# of weeks offered) $ - Time spent Sourcing to find one candidate for a difficult to fill positions 5 Average # of applications received to fill 1 position 22 Average time spent dispositioning applicants 2 Average # of candidates Pre-screened by Recruiting/HR 7.24 Average time spent by HR Phone/Interview candidates 30 Cost pre pre-assessment test (manpower) $ 6 Average # of candidates routed to Hiring Managers for consideration 5 Average # of candidates interviewed by hiring manager to fill 1 position 3.04 Average time spent by hiring manager interviewing candidates 60 Average time spent by HR to creating/deliver/processing offers 60 Cost per source of hire (media, posting, agency, etc.) $ 788 Background check/drug/medical exam costs per hire $ 531 Average candidate travel costs per hire $ - Moving expenses $ - Post offer onboarding admin expenses 120 Average sign on bonus per hire $ - # of hours spent in formal training/onboarding per new hire. 8 Learning curve - # of months to full ramp up 2 Lost productivity % during learning curve period 50% Turnover categories Case study Separation Costs Total labor costs for exit interviewer's time $ - Total admin labor costs for termination processing $ 43,671 Total separation pay $ - Total separation costs across all replaced employees $ 43,671 Recruitment Replacement Costs Total costs - source of hire $ 918,650 Total Labor Costs to source candidates $ 1,311,525 Total labor costs to disposition all applicants $ 38,471 Total labor cost for pre-screening candidates $ 189,909 Total pre-assessment testing costs $ 48,532 Total labor cost for hiring manager interviews $ 212,642 Total labor cost for HR/recruiter to create/deliver offer $ 52,461 Total recruitment replacement costs $ 2,772,191 Onboarding Replacement Costs Background check/drug/medical exam costs per hire $ 619,040 Average candidate travel costs per hire $ - Moving expenses $ - Post offer onboarding admin expenses $ 43,671 Average sign on bonus per hire $ - Total Onboarding Costs $ 662,711 Total Training Costs New hire labor costs during Training/onboarding $ 319,474 Total learning curve costs $ 6,921,938 Total Training Costs $ 7,241,412 TOTAL TURNOVER COSTS $ 10,719,984 % decrease in Turnover Rate 23.5% Median First year TO Rate 15.4% Total savings from reduction in turnover $ 2,519, % 15.4% $2,519,196

33 INVESTMENT IN RECRUITMENT TO IMPROVE CUSTOMER SATISFACTION MEAN RESPONSES BY DIMENSION 06/24/15 11/16/15 10/04/16 BM UNDERSTANDING COMMUNICATION CARE SATISFACTION QUALITY OF HIRE

34 INVESTMENT IN RECRUITMENT TO IMPROVE CUSTOMER SATISFACTION % OF RAVING FANS BY DIMENSION (RESPONSES 6-7) 06/24/15 11/16/15 10/04/16 BM 54.2% 82.2% 85.7% 68.3% 45.0% 78.6% 82.1% 63.2% 57.7% 87.7% 91.3% 76.7% 52.1% 84.1% 88.2% 70.7% 45.5% 76.7% 79.4% 73.7% UNDERSTANDING COMMUNICATION CARE SATISFACTION QUALITY OF HIRE

35 INVESTMENT IN RECRUITMENT TO IMPROVE CUSTOMER SATISFACTION % OF DISSATISFIED CUSTOMERS BY DIMENSION (RESPONSES 1-3) 06/24/15 11/16/15 10/04/16 BM 15.3% 1.7% 1.8% 10.4% 5.7% 3.8% 15.6% 7.7% 1.3% 0.2% 4.4% 17.2% 1.7% 2.5% 12.0% 10.2% 1.0% 1.5% 4.3% 24.3% UNDERSTANDING COMMUNICATION CARE SATISFACTION QUALITY OF HIRE

36 COST METRICS Being Fiscally Responsible

37 INVESTMENT COMPARISON BY INDUSTRY Cost Per Hire Analysis Recruitment Cost Ratio $10,000 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 $4,323 $4,300 $4,325 $3,033 $1,065 $627 30% 25% 20% 15% 10% 5% 0% 25% 7.50% 8.0% 6.7% 5.7% 6.2% 4.7% 2.7% 1.5% Observations: - Compared to other industries, healthcare organization investment in recruitment is very low. - Top performing organizations are investment more money in Recruitment*. - When you compare healthcare RCR (1.5%) to other industries and/or the cost of an RPO (5-10%) or search firm (20-30%), we believe internal recruitment teams perform well considering the lack of capital investment.

38 THANK YOU! Questions? Presenter Contact Information for Additional Questions: David Szary Sr. Vice President and General Manager, Recruiting Services Lean Human Capital by HealthcareSource REMEMBER! Rate each session you attend in the Mobile App 1-5 Stars, 5 being the best.