Cost of Not Hiring in Healthcare

The Cost of Not Hiring in Healthcare: Volume and Business Loss

HealthStream’s Second Opinions Podcast series features industry experts and leaders and their take on issues impacting healthcare today and tomorrow. 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 do you think are some of the most important metrics that human resources leaders ought to be monitoring so that they can make sure that they’re on track?

Elliot Clark

I look at healthcare HR as almost like a time capsule, because they’ve been denied the cap-X expenditure to get more modern tools. If you go into most commercial HR departments they have a wide variety of measurement and analytic tools at their disposal through applicant tracking solutions, and through planning tools that may not be available in the healthcare space.They really need to focus on the big two or three. One is obviously time to fill. Time to fill is increasing in the United States. We have a perfect storm. We have an aging population. Through the Affordable Care Act we added several million benefit recipients. We have an aging workforce. The educational systems in the United States are not keeping up with the retirements and increased demand. You’ve got a bigger and bigger gap. Time to fill has been stretching out across the country. In addition everyone measures your cost per hire. Time to fill, cost per hire, those kinds of things are the big ones.

Here’s the one that no one is covering that I have been on my so box about for the past year, which is the cost of not hiring. Just think about that for a moment. If you’re a hospital with a 10 percent vacancy rate and if you go back to 2001, I think it was an American Nursing Association poll, how many hospitals had more than 10 percent vacancy? Well, the answer was 4.8 percent—same survey a few years later, 32.9 percent. If you have 500 nurses, that’s 50 shifts a week, or 200 shifts a month that are not covered. Now you might not have enough patients through the course of a year, but if you covered half of them and had those beds filled a hundred more bed nights a month or 1,200 a year, what would that mean for the revenue of the hospital? No one’s looking at the cost of not hiring


That’s interesting. You don’t hear that metric mentioned really at all in my experience. You’re right. It’s all about cost of hire, but looking at the cost of non-hires, it’s probably a pretty new concept for quite a bit of our listeners.

Elliot Clark:   

Here’s the point, if you think of it that way, you automatically transform the concept of HR as an expense to HR as an investment. Crossing that Rubicon mentally makes all the difference in the world.


A lot of organizations in healthcare view human resources as a cost center. Is there a different way to manage that?

Elliot Clark:   

Well, I think first of all, HR people as a general need to talk the language of business. You’ve got to be able to talk about, business impacts and cost of not hiring—you’ve got to look at workforce as an investment in the future, an investment in better outcomes, an investment in better qualifications and ratings, etc. Yet there is still an inability to do that.

Listen to the full podcast here.

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