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opportunity cost

Healthcare Employees Who Leave: The Opportunity Cost

HealthStream’s Second Opinions Podcast series features healthcare experts and their take on issues impacting the industry. We recently interviewed Elliot Clark, Chairman and CEO of SharedXpertise Media and HRO Today, a magazine focused on Human Resources leadership.

In this episode of Second Opinions, Elliot Clark provides strong evidence why healthcare leaders must adopt the mindset of industries that see HR as an investment in the future and in better outcomes, not just a cost center and risk manager.

Below is an edited excerpt from the recording with HealthStream’s Brad Weeks, our host:

Brad Weeks:

What lessons can human resources leadership in healthcare take from other industries?

Elliot Clark:                                      

Principally they’ve got to understand the big shift in HR. If you go back when I started in human resources on stone tablets back in the day, the HR folks were seen as administrative risk managers. They were keeping personnel records, they were dealing with grievances, but fundamentally weren’t really contributing to driving business strategy. That has changed in the last 20 years and continues to accelerate. What we’ve seen is that a lot of chief HR officers come not from the world of HR, but from areas outside of traditional HR in terms of their educational experience—the percentage that comes out of what I’ll call “Measurement-driven Professions,” engineering, finance, etc., has risen markedly; I think part of the reason is that HR leaders need to be able to speak the language of business.

A very good friend of mine who is the head of HR for one of the world’s largest manufacturing firms said to me that if you’re in an executive committee meeting and you can tell in that meeting who is the CFO, who’s the head of HR, who’s the head of sales, who’s the head of marketing and communications, then no one’s doing their job right because they shouldn’t advocate for their viewpoint or sector. They should only be talking about what’s good for the business and something that will impact the business.

I think there’s a very important inspirational lesson there. That HR people need not to be seen necessarily as solely the advocate for the employees. They need to be able to articulate why programs for the employees drive better business outcomes. I think that’s really the key. That’s really the inspiration from the commercial world that HR people need to get. At one point in the commercial world, and I’m only going back 15 years, the leaders of HR were fighting for some for some of the very tools, the HRIS systems, the applicant tracking systems, the metrics analytical platforms that the healthcare industry has yet to invest in. They found that when they did make that investment it paid off. In an industry like healthcare, that in certain parts of the country has 25 percent turnover, if you can make that turnover drop to 18 percent, how much money does that organization save on new recruitment cost? Everyone counts the outward spend. What are we spending as we’re sending qualified employees out the door to other organizations and competitors? We’re not doing a good job in HR talking about opportunity cost.

Listen to the full podcast here.

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