You meet with your supervisor who lets you know that you are over budget for agency nurses used on your unit. What are some tactics you could implement to decrease agency usage? Analyze how this unplanned overage will impact your overall staffing budget.
Staffing wages and benefits are typically one of the largest items in the budget for most nursing departments. Nursing leaders must be vigilant in monitoring staffing patterns, overtime and expenses related to contract labor vs. incentives and bonuses and how it affects their annual operating budget. With the current staffing shortages most healthcare organizations have had to source nurses through staffing agencies which are typically significantly more expensive than traditional staff. There are several ways that organizations can help to decrease the amount of contract labor. First nursing leaders should evaluate if there are regular staff that can be shifted around to help fill open shifts. In my organization there were several departments that had more day shift staff than they did night shift staff so we offered an incentive to day shift nurses to agree to work night shift for a month at a time. This allowed us to decrease the need for contract labor on night shift. Another tactic is to use per diem staff to fill some of these needs (Leger, 2021). Organizations can also develop internal contract for per diem staff to work full-time for a period of time to fill staffing needs. Internal “contract” positions are very attractive to per diem staff while still decreasing contract labor cost for hospitals. Nurse leaders can also offer short term incentive plans to incentivize full and part time staff to work above their FTE status. Nursing leaders must be aware of the impact exceeding budget can impact the ability to offer annual pay increases or purchase much needed equipment for the department.
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Leger, M. (2021). Financial management for nurse managers: Merging the heart of the dollar (5th ed.). Jones and Bartlett. ISBN-13: 9781284230932
Staffing consumes a great amount of any manager’s budget. According to Brown & Leger, “While every effort should be made to ensure a fiscally responsible usage of funds, the nurse leader has an obligation to stand firm in the commitment to quality patient care (2021, p. 155).” Staying within a particular budget is an extremely important part of a nurse leader’s job. It can be difficult when units are under or overstaffed and must meet particular quotas in order to stay within a set budget. If I was over budget, the first thing I would consider is why are agency nurses more impactful than core nurses. While core nurses can be more expensive to train, if longevity is established, the unit and organization benefit. Understanding the root cause of these issues will assist in preventing them in the future. Once this is established, I would compare the costs of hiring a core nurse versus an agency nurse. While agency nurses can assist with unexpected influxes in patients or sudden decreases in staffing, core staffing should be the priority.
Nurse turnover is a huge issue that continues to impact the nursing world. Nurses and other staff must feel valued and feel as if it is worth it to stay long-term. Incentives can be initiated to assist with longevity but ultimately nurse managers cannot control if someone would like to or plan to quit. Nurse managers can make a healthy work environment in which people want to learn and thrive which should be their goal. Any unplanned overage makes a large impact on any budget. If productivity is closely followed, it is important to understand what positive attributes agency nurses are having. It is also important to understand the negative impact such as the financial strain that use of using agency nurses long-term on a unit and organization can have.
Balancing scheduled hours with dedicated unit staff instead of agency staff requires planning. The cost of agency hours standardly exceeds unit staff wages, and continuity of care is impacted when we use staff not dedicated to the unit. According to Leger, contract hours for travel nurses include, at a minimum, hourly rate, rent, food, travel, and car rental (2023, p.137). Recognizing the reasoning for utilizing agency staff is the first step to developing a plan of correction. Are we using agency hours because of scheduled vacations, sick calls, or to fill in staffing gaps from open positions? These are some key questions to consider when developing a plan of correction. The next step is to look at the staff schedule and see where to plug in short-hour staff or staff from other shifts to fill in the shortages. Another option is to contact the staffing office to determine if there are overages in other departments that can lend a staff nurse to pick up open shifts.
If the agency hours are being utilized due to sick calls, I would consult the attendance policy and hold staff accountable as indicated. If there are open positions, I will work with recruitment to fill the open positions as soon as possible. Looking at the core reason for utilizing agency hours is the first step to managing budget overages. Prolonged agency staff usage will negatively impact the budget if sustained over long periods and used excessively. As the nurse manager, planning and budgeting for vacations and extended staff absences should be reflected in budgeted hours for the year.