A workforce struggle that spans the ages, overtime has its time and place in nearly every industry. But excessive overtime is a pain point for many organizations, burning out employees and driving up labor costs.
What constitutes an excessive amount of overtime? In general, a healthy overtime average for a typical provider organization sits around 3 percent – anything above that should demand leadership’s attention to what is causing it.
Before we get into this, let’s get on the same page with two key terms: Core and Contingency.
Core Staff: Staff members who hold an ongoing FTE commitment within a single department working within their FTE. As an example, a licensed professional who is full-time (1.0 FTE) in an ICU cost center is a core staff member for that cost center.
Contingency Staff: All hours, other than those worked by core staff members within their FTE. Examples include Overtime, Incentive Shift, Float Pool, PRN, Per Diem, and Contract Labor.
In the world of inpatient care, core staff working into overtime may be necessary in order to reach optimal levels during times of greatest need. As census fluctuates, core staff can occasionally flex up to meet this demand, but this should be a very thin contingency resource layer. Core staff working in overtime as a major and ongoing source to fill contingency needs is not only a leading cause of staff burnout and dissatisfaction, but it also reduces the availability of these individuals during times of high need.
Overtime is just one of the contingency defenses an organization should have to meet demand. Depending on the size of the health system, there are many types of contingency resources an organization can have to flex up to patient demand, such as float pool, PRN, and agency.
While every organization has its own reason for excessive overtime, not having an enterprise staffing mentality is a common factor. A lack of transparency across the facility or system and failure to share resources drives up labor costs and frustrates staff. If an organization has a cancellation percentage that exceeds overtime, this is a warning sign that resources are not being shared. Having shifts frequently cancelled is just as frustrating for staff as being overworked, as they count on working their expected schedule.
A significant cause of excessive overtime is an imbalance of having the right amount and right mix of resources (i.e., core vs. contingency). However, there is no fixed ratio of core staff that will work best for every health system. The objective is to hire the number of core staff needed to keep them working to their FTE commitment without the need for excessive floating or overtime. A deep dive into predictive analytics and workforce analytics can help you determine what that number is for your organization.
An organization may also not have the right amount or layers of contingency resources – such as enterprise float pools or PRN. How many layers and their size varies depending on an organization’s size and its patient volume fluctuations, among other factors, but the process for determining size and layering involves analysis of core staff behaviors and trends (expected and unexpected time off, etc.), historical census levels and acuity spikes, predicted future census, staffing levels, and various HR information.
It takes strategic planning and strong commitment to take action to reduce metrics such as overtime. Ensuring an organization has the right amount and mix of core and contingency resources is a good starting place. Embracing an enterprise mentality that freely shares resources leverages workforce optimization, further helping reduce core staff working in overtime.