Executive Insight December 2015 Rich Miller’s article on Reducing Labor Costs without Layoffs (also available as PDF) was featured in the December 2015 issue of Executive Insight. As the co-founder and Chief Strategy Officer of OpenTempo, he is well-placed to address the underlying causes of inefficient staffing.

Antiquated systems lead the list, ranging from paper-based systems to rudimentary software. It is not unusual for printed schedules to be covered with cross-outs and post-its as changes are made.

Lack of systems integration is another concern. While this is typically discussed in relation to electronic health records, labor-related systems also benefit from integration. Labor systems include staff schedules, time & attendance and payroll systems, all of which need to be able to communicate with one another.

Reducing Labor Costs in 6 Areas

Where antiquated and unintegrated systems are in place, labor costs skyrocket. Miller presents the top 6 costs of inefficient staffing as:

  1. Overtime
  2. Scheduling errors
  3. Patient delays
  4. Underutilization
  5. High FTEs
  6. Excess locums

By addressing the underlying issues, these costs can be significantly reduced and, in many cases, even erased. For instance, healthcare staff scheduling can be used in conjunction with time tracking and payroll to give real-time control of overtime. This same integration will give managers the ability to reduce underutilization of staff.

Miller concludes, “By addressing these issues, health systems gain control over their labor budgets without the need to resort to layoffs.”