Leveraging the Contingent Workforce as a Strategic Element of Talent Acquisition. People in Healthcare Summit 2018 March 21, 2018

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1 Leveraging the Contingent Workforce as a Strategic Element of Talent Acquisition People in Healthcare Summit 2018 March 21, 2018

2 Today s Presenters Christopher Henry Vice President of Talent & Change Management Sutter Health Leanne Oatman President & Co-Founder RightSourcing

3 Overview

4 Serving More Than 100 Communities With: 12,000+ physicians 54,000+ employees ~15,000 RNs 24 acute care hospitals Licensed beds: 4,311 Births: 33,749 Discharges: 193,161 ED Visits: 873,992 Home Health Visits: 519,703 Hospice Visits: 217,084 Sutter Health Plan $12 billion in revenues (2016) Community Benefit: 2016 $669M

5 Sutter s Mission We enhance the well-being of people in the communities we serve through a not-for-profit commitment to compassion and excellence in health care services Sutter s Vision Sutter Health leads the transformation of health care to achieve the highest levels of quality, access and affordability Community impact, national leadership

6 Overview

7 Pioneered Contingent Workforce Management Solutions for Hospitals and Healthcare Systems Vendor Neutral MSP Unmatched Compliance Expertise Clinical & Non-Clinical Labor Expertise Best-in-Class Technology & Workforce Analytics Customized Service-Delivery $2.5B+ Under Management Across 250+ Locations National Network of 2,600+ Suppliers Top Vendor- Neutral MSP by Healthcare Spend Ranked #1 for Contingent Workforce Management The Joint Commission Certificate of Distinction

8 Streamlined Contingent Workforce Management Staffing Suppliers & Volunteers Independent Contractors Statement of Work Improve Worker Quality Mitigate Risks Single MSA for all vendors Requisition Oversight Vendor Management Worker Credentials Audits Onboarding Optimization Automated Time/Expense Consolidated Invoicing Best Practices Contractor Compliance RFI Automation Market Intelligence Strategic Analytics Increase Process Efficiencies Reduce Costs

9 The Shifting Workforce

10 Healthcare Talent Supply & Demand Shifts Next Decade in Healthcare*: Growth Service Demand > 10% GDP Jobs >15% Shortages > 45,000 Primary Care Physicians > 46,000 Surgeons + Medical Specialists Technology Skills Gap > 50% *Sourced from H. Landau, CEO - First Health Pro Inc. & T. McDonough, CEO Strayer@Work

11 FTE Fill Fatigue Factors 25% of U.S. workforce are Millennials, with 1:3 freelancing The healthcare industry is becoming the largest employment sector in the U.S. and will account for one-third of the nation s job growth by 2024 In 2016, a reported 50% of healthcare jobs across the nation went unfilled 51% of FTE workers not engaged with jobs & commonly burn-out Sourced from nonprofit HR

12 The Growing Contingent Workforce

13 Contingent Workforce Management Journey

14 Sutter Health Opportunity 25% Turnover in critical areas of nursing Hard-to-fill specialty experience nationally Over $190M annual contract labor spend

15 Initial Sutter Health Challenges De-Centralized Management No Contingent Workforce Visibility Too Many Suppliers / Agreements Not Leveraging Economies of Scale Lack of Internal Expertise Data Analytics & Workforce Planning Inconsistent & Inefficient Processes

16 MyTemp Staffing Timeline Successful Implementation Central Valley, followed by EBR, IS & SPS 772 Legacy workers and 180 workers placed Growing Adoption Five more regions live 1,551 workers placed Successful Expansion Bay Area Nursing & East Bay 3,095 workers placed 2016 Program Optimization Sac Sierra Nursing & Sutter Coast added 3,634 workers placed Strategic Partnership Ongoing discussions to optimize the MyTempStaffing program 2013

17 Gaining Workforce Visibility Holistic View of Workforce Sutter gained visibility to the enterprise-wide temporary workforce. Customized Dashboards Dashboards customized to provide actionable insights that are important to Sutter. Track Key Success Drivers Allowing Sutter to: Compare costs across all worker types, job titles, locations, etc. Know when, where and how to source cost-effectively. Determine why workers come and go. Leverage data to create new strategies to attract / retain top talent. Identify trends / outliers in data. Pinpoint gaps or areas of opportunity.

18 Contract and Compliance Consistency Compliance/Credentialing Team of 5 dedicated Compliance Analysts for Sutter Health Department with EEOC, FLSA, Co-Employment Expertise Standardized Contract Terms for Suppliers Former IRS Auditors and Insurance Specialists Validation/ Monitoring of Supplier Insurance Certificates 1099/IC Worker Classification Audits Since program go-live RightSourcing has participated in 26 audits with 100% compliance

19 Optimizing Workforce Quality Self-Sourced Talent Pools High Worker Quality FTE Conversions Cost Savings Self-sourced workers driving high worker quality scores and cost savings Self-Sourced Eligibility for Rehire Since go-live 1,026 workers have been converted to full time, resulting in a 9.5% conversion rate Generating an estimated $5.2M in cost-savings Workers Converted to FTE % % 95% % Q1-Q2

20 Eliminated Rapid Response Rapid Response Hours Utilization 2014 Q Cost Savings through Lower Rates RightSourcing implemented demand planning procedures allowing optimal time to source workers at competitive rates Reduced utilization Estimated $16.7M* in savings for 2015 and 2016 combined

21 COST SAVINGS $2.4M in Cost Avoidance 2017 Program Results Highlights $7.7M 92% QUALITY RESULTS Percent of workers completing assignments eligible for rehire STAFFING PLACEMENTS 3, Days DECREASED NURSING TIME-TO-FILL Compared to 2016 average

22 Value Through Cost-Savings $10M $9M $8M $7M $6M $5M $4M $3M $2M $1M K $9.3M $7.3M $7.7M $3.4M $2.1M $2.5M $2.3M $1.1M Cost Savings Cost Avoidance Sutter Health-RightSourcing program has driven $35.7M in cost savings and avoidance since go-live in Q through: Market-rate benchmarking Competitive-bidding on all requisitions Resource forecasting to eliminate rapid response rates Reduction in orientation Overtime reductions Self-sourced talent pools No-fee FTE conversions Process efficiencies

23 Program Evolution: Effective Utilization of Technology to Drive Workforce Optimization

24 Private Talent Network Your Network. Your Talent. Your Savings. By leveraging Sutter Health s strong employer brand, RightSourcing s Wand VMS technology is helping to build a Private Talent Network of workers exclusively for Sutter Health - including alumni, retirees, silver-medalists, referred workers, etc. Sutter hiring managers will leverage this functionality to easily identify, engage and assign quality talent in a very short amount of time and with cost-savings of 10% 20%.

25 Workforce Demand Planning All-inclusive Total Talent Dashboard With key strategic decision points on workers, roles, tenure, time-to-fill, current and benchmarked rates, replacement costs, etc., the Sutter/RightSourcing program is able to optimize their workforce through a flexible forecasting model to reduces costs, create efficiencies and improve patient care. Ability to address critical planning needs Planning needs can be addressed by manager, cost center, operating unit, etc. Assignments ending in under 30 days

26 Supplier Optimization Framework Financial benefits pricing leverage Heightened supplier focus and engagement Tighter controls to increase candidate quality Increased supplier alignment to business objectives SUPPLIER SCORECARDS Alignment with Sutter s new Operating Units SUPPLIER EVALUATIONS Who s In? Who s Out? Who s On Watch List? RECOMMENDATIONS RightSourcing to provide initial recommendations and obtain Sutter approvals SUPPLIER NEGOTIATIONS RightSourcing to facilitate negotiation and contract adjustments based on final decisions

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