The True Cost of Turnover for Human Service Organizations

Written by Dylan Kane

July 17, 2018

The True Cost of Turnover for Human Service Organizations

Across all industries, attracting and retaining top talent are top priorities among executives. This is particularly true of nonprofit Human Services organizations, who are constantly looking to grow their workforces to meet the increasing demand of their clients and patients. Unfortunately, this industry is notorious for high turnover rates, with organizations often reaching turnover as high as 40%.

While all industries experience turnover and its internal impact on culture and employee morale, there are several factors that make high turnover particularly threatening to the success of the Human Service organizations. For these organizations, not only do executives have to worry about the internal consequences of high turnover, but they must also be mindful and proactive of the external impact that their turnover has on their clients and patients. This makes the cost of turnover much higher for these organizations, and is currently putting pressure on executives to solve their turnover mystery.

How it Impacts the Quality of Care
For many Human Services organizations, providing high quality of care to patients is their top priority. Unfortunately, high turnover rates make this task increasingly difficult, and often weaken the relationships that organizations have with their patients. Behavioral and Mental Health treatment programs require that a great deal of trust, understanding, and comfort is established between the patient and the professional. The importance of trust in healthcare settings is affirmed in a 2008 study by BMC Health Services Research, who researched the importance of patient-caregiver relationships and their impact on impactful treatment. The study found that when patients were asked to describe their experiences while admitted, they did so largely in the context of the caregivers they encountered, rather than the kind of treatment they received.

For people with behavioral health disorders, mental health disorders, or intellectual/developmental disabilities, familiarity and trust are essential in treatment programs. When caregivers leave because of high turnover, it can be hard for patients to build trustful relationships while admitted, and can force them to go through the frustrating process of starting a relationship from scratch all over again. With that said, high turnover can have a detrimental impact on the quality of care provided by organizations, and negatively effects their external cost of turnover. In some cases, high turnover puts the reputation of some Human Services at risks if patients are vocal about their negative experiences due to poor caregiver turnover.

How it Hurts the Bottom Line
Across all industries, employees are aptly referred to as “human capital,” as they are an asset to their respective organizations. Given that for most Human Services organizations employees represent their organization’s largest expense, it’s fair to say that employees are the organization’s most important asset. In many ways, employees can also be seen as investments, especially when considering the significant costs and resources required during the recruiting, onboarding, and training processes of new employees.

Consequently, high turnover results in a significant financial loss. Josh Bersin, Founder of Bersin by Deloitte, claims that replacing an employee can cost 1.5 to 2 times the employee’s salary. When an employee is terminated or otherwise leaves an organization, the money and resources invested in that employee are ultimately lost. The financial impact is significantly higher when turnover is occurring in highly-skilled positions, like Psychiatrists or Registered Nurses. Last year, SHRM posted an article listing the hardest jobs to fill in 2017. In their ‘Top 10 List,’ which included positions in all industries, 4 of the top 10 were positions found in Human Services organizations. The harder it becomes to fill these positons, the more critical it is to increase retention and protect the investments made in our employees, limiting their internal cost of turnover.

Combating High Turnover
More than ever, organizations are investing significant resources into recruiting qualified applicants, training and monitoring performance, acclimating new hires, and engaging employees. Here are a few ways that modern HR and Recruiting technology is allowing organizations to attract and retain top talent:

  • Attract the best talent with better career sites and a streamlined applicant experience
  • Allow for faster, better communication and collaboration among recruiters and hiring managers
  • Implement better, more thorough background and reference check processes
  • Increase employee engagement with online company news and announcements
  • Capture real-time metrics on turnover rates that breakdown of turnover by program, location, etc., allowing executives to uncover underlying retention risks
  • Utilize online, automated performance reviews help monitor and track performance standards and employee satisfaction

As we jump into the new year, executives need to investigate ways to increase retention in order to protect their most valuable investment, their employees. Increasing retention is critical for the growth and success of an organization, and more importantly, the success of treatment programs for their patients. If executives can limit and decrease their overall cost of turnover, they can provide their patients with higher quality care, and strengthen their organization’s bottom line.

This DATIS Blog was written by Dylan Kane, DATIS, on January 18th, 2018 and may not be re-posted without permission.