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Blog
Why Healthcare HR Must Evolve and Innovate
In the current issue of HealthStream’s PX Advisor, Elliot Clark, chairman and CEO of HRO Today, shares his belief that hospitals who stay in an expense-cutting mode are not proactive, but reactive. “Those focused only on cutting expenses are not investing for the future. They’re not thinking about how to be more successful by investing more money in areas like staffing solutions,” he notes.
HR’s Evolution
A generation ago, HR professionals were administrative risk managers who kept personnel records and dealt with grievances, without fundamentally contributing to driving business strategy. In the last 20 years, Elliot sees a change that continues to accelerate. “HR officers are coming from the world of engineering, accounting, and psychology, areas outside of the traditional HR education and experience. The percentage coming out of these measurement-driven professions has risen markedly because HR leaders need to be able to speak the language of business.”
“The head of HR for one of the world’s largest manufacturing firms said if you’re in an executive committee meeting and you can tell who in the meeting is the CFO, who’s the head of HR, who’s the head of sales, and who’s the head of marketing and communications, then no one’s doing their job well. They shouldn’t be advocating for their unique viewpoint. They should only be talking about what’s good for the business and what will have an impact on the business. I think there’s a very important inspirational lesson there,” remarks Elliot.
For HR professionals to be more than just employee advocates, Elliot says they need to be able to articulate why employee programs drive better business outcomes. “That’s the inspiration from the commercial world HR needs to get.”
“In healthcare, where 25 percent turnover is not uncommon, if you can reduce turnover to 18 percent, how much money does that organization save on new recruitment cost? What are we spending when our people leave us? We’re not doing a good job in HR talking about or quantifying opportunity cost,” Elliot says.
Looking to the Future
According to Elliot, the new generation of HR professionals must be much more willing to act as business partners to the various units of the hospital and give good advice on business strategy. At the same time, they will need to continue managing day-to-day HR issues, those personnel frictions that occur inside the building. HR must also be innovative, entrepreneurial, and creative. Most of all, they must always be talking about business impact. This starts with treating the accounting and finance group as allies, not adversaries.
“It will be important to forge a strong partnership with the CFO,” says Elliot. “Our study found CFOs agreed more than disagreed with the need for HR to deliver better services, but they require more data and information. Having that partnership can help build the case.” Ultimately, he believes, HR must change its vocabulary from expense to investment, as in, here’s what we invested. “The investment approach will make a world of difference in how everyone views HR,” he concludes.
To download this issue of PX Advisor, which includes the full article featuring Elliot Clark, complete this form.