Keeping the Good Ones

March 1, 2004
Bob Vidal

How to retain practice staff

Remember how those high-flying dot.com companies of the 1990s tried to hang on to talented workers? Besides promising lucrative stock options, they stocked worksites with pinball machines, pool tables, and other toys; had lunchrooms that rivaled any local bistro; and provided laundry pick-up, concierge services, and even childcare onsite.

Of course, your practice doesn't have mountains of venture capital to burn through. Still, I know of few physician practices that focus very much on staff retention, let alone offer benefits and perks anywhere near those seen at the boom companies of the last decade.

Retaining human capital is a key success factor for any organization, especially a medical office. A patient-centered practice relies on a specialized group of people who are not only competent professionals but who also have special qualities, problem-solving skills, and patience. The scarcity of this talent makes retention a critical success factor.

Your staff is often under extraordinary stress and, at the same time, they play an important role in the quality of the patient visit. Sometimes what your patients need most is just a friendly, familiar face and a few words of comfort that your staff can provide.

What's your turnover?

It's no secret that staff turnover is high in healthcare.
Turnover rates are usually calculated by dividing the number of employees who have left an employer over a period of time, normally during a calendar year, by the average number of employees employed during the same period.

According to the U.S. Department of Labor, which tracks turnover rates by industry, the total annual turnover rate for all industries was 36.6 percent between September 2002 and September 2003. Total turnover for the healthcare and social assistance sector was a bit better -- 28.6 percent. That means an average practice can expect one in four employees to leave this year.

Voluntary turnover in healthcare was also slightly lower, 17.7 percent versus 19.9 percent for all industries. Voluntary turnover measures the number of employees who left their employment to take a new position, return to school, relocate to another part of the country, or any other situation in which the employee makes the decision to leave.

These numbers make it seem as if healthcare does well relative to other industries, but that's not the whole story.

The flip side is that only 54.4 percent of all workers leave their jobs voluntarily, compared with 61.9 percent of workers in the healthcare and social assistance sector. The remaining 38.1 percent of separations in healthcare are involuntary --  in other words, caused by poor hiring decisions, low employee performance, disciplinary action, or layoffs. What does this mean? It means that almost two out of three workers you lose go because they are seeking something better than they could get with you.

Measure your group's turnover rates and compare them to industry norms. If your turnover is higher than average, you need to improve. Even if you are doing relatively well, look for ways to do better. Retaining good staff is important to your patients' welfare and your practice's stability. Imagine how your practice would change if you could reduce its turnover rate to less than the sector's 28.6 percent norm.

There are many costs associated with turnover; most commonly, they include recruiting fees, interviewing expenses, and advertising fees. Don't forget to add in the costs associated with employee orientation and training --  productivity declines when your staff spends time training new hires --  and the estimated productivity lost when an experienced employee is replaced by someone who is not yet up to speed on the job.

Finding the right people

A comprehensive and successful strategy to reduce turnover and encourage retention contains three critical components:

  • talent acquisition,
  • talent integration, and 
  • talent retention.

Talent acquisition begins with a clear and complete understanding of the requirements and competencies needed to perform every job in the practice. It means developing a profile of the successful employee. The new employee must be willing and able to fit into the culture of the organization.

Hiring the wrong person is an expensive mistake that may severely impact your productivity, expose you to legal action, hurt the morale of other employees, drain management time, and significantly affect patient care.


The second step in a successful talent acquisition strategy is an honest assessment of the competitiveness of your group's compensation and benefit practices. Underpaying or overpaying employees is not a good strategy; the right balance is a competitive compensation package that can attract and retain talent. Sometimes the most disgruntled employee is one who wants to leave the organization but cannot afford to leave.

Don't make the mistake of paying employees less than your competitors. Why settle for less-qualified candidates just to save few bucks? If your compensation practice targets the lower 50 percent of the market, you likely need more people to do the same amount of work that fewer, better-qualified individuals could handle. You'll also commit more management time or spend more dollars on staff training to get a bargain-basement staff up to speed.

Your practice will become the "feeder" to the higher paying practice in your market --  that is, you will hire and train inexperienced people only to have them leave your practice when they have gained the skills and experience.

The final key element of a talent acquisition strategy is knowing where to find talent. Where can you find the candidates who meet your criteria? Can you recall the recruiting source for your most successful employees? Recruiting sources may include specialized recruiters, community organizations, professional publications, and word of mouth.

Your practice's reputation can make a significant difference in attracting the best employees at minimal costs. It's no coincidence that the companies finishing highest on Fortune magazine's annual report of "the best companies to work for" also get the highest numbers of candidates per job opening.

Helping staff fit in

The second component of the retention strategy is talent integration, or helping the staff fit into your practice's culture. Start with a comprehensive orientation program --  one that goes beyond completing payroll and benefits forms. Orientation is an opportunity to communicate the core values of your organization, its rules of conduct, and your expectations.

Once new staff are on board, a comprehensive training program ensures the employee understands your operational and business procedures, enhances core competencies, and provides opportunities for continuous improvement and development. The return on investment for this effort is to reduce the amount of time it takes to create a fully functional and productive employee for the practice.

Finally, setting expectations and developing performance standards for future employee evaluations are critical steps to ensuring consistent and outstanding levels of patient care. An equitable performance evaluation and reward system is vital to the health of the practice. Make sure that the measurements of employee performance relate to and support how you measure your organization's success.

Retaining your talent

We learned a number of lessons from the dot.com's retention strategies. The pinball table in the lobby and other popular -- and often low-cost --  benefits became expectations, not differentiators between employers. People want meaning in their jobs and recognition for a job well done. Good workers are drawn to workplaces where the culture appeals to their core values.

Recognition is the most important element of a retention strategy. Recognition programs take many forms including:

  • additional compensation,
  • annual or spot bonuses,
  • free tickets to a play,
  • plaques or other recognition items to identify special efforts or accomplishments,
  • a pin commemorating years of service, or
  • the opportunity to attend a seminar or training program to enhance professional skills.

Developing an employee feedback system is a great way to learn about employee concerns, gain valuable suggestions to improve the practice, and give employees a sense that you appreciate their value to the organization.

Retaining the special talent required to assist patients is a critical success factor for today's medical practices. Take time to make the workplace meaningful for your staff. Develop a comprehensive retention strategy and watch your practice flourish.

Roberto "Bob" G. Vidal can be reached at 
editor@physicianspractice.com.

This article originally appeared in the March 2004 issue of Physicians Practice.