How many FTEs do you need?

With personnel expense making up more than half of the total operating expense of most hospitals and health systems, understanding how many FTEs your organization actually needs to run efficiently is a priority.

A Full-Time Equivalent, or FTE, is the sum of all worked or paid hours divided by the total hours in a pay period. For most organizations, that’s 80 hours per pay or 2080 hours per year. It is important to remember that an FTE is not a “body” or individual staff member. It is a compilation of hours that can be spread across a mix of full-time, part-time, and per diem positions.

So how is the right FTE balance is achieved? Productivity systems are designed to align staffing with demand and track progress to ensure improvements are sustained. Departmental benchmarks allow healthcare leaders to compare performance against industry standards and establish goals that are realistic and attainable. Without metrics to guide staffing practices, hospitals often fall victim to costly FTEs creeps that can devastate their bottom line and lead to damaging layoffs. If your organization does not have a productivity model in place, now is the time to change that!

Of course, the expense of unnecessary FTEs is a major cause for concern, but that is not the only reason that proper staffing is so critical. A right-sized compliment of staff produces effective practices, clearer expectations, and more efficient operations. It requires each staff member to be more engaged; creating further ownership and more prompt attendance to open issues. In addition, each and every position in an organization becomes more highly valued leading to greater teamwork and overall staff satisfaction.

A popular urban legend that circulates within the industry is that there is a correlation between having a robust staff and providing better quality of care. Unfortunately, adding FTEs does not automatically improve outcomes. In actuality, quite the opposite is true. The traditional practice of “throwing bodies” at a problem in hopes that it can be rectified can no longer be justified in the current healthcare environment.

Earlier this week, I had the opportunity to visit and support a small acute care hospital in Southeastern Ohio. During interviews with the managers and a tour of the facility, I could not help but notice how shiny the floor throughout the building was and how well maintained the facility was. Cleanliness and pride in the appearance where evident everywhere.  I later learned that the hospital is ranked near the top of the state in patient satisfaction for environmental services, and our analytical team shared with me that they are in the top 10% of performance for productivity and efficiency for similar hospitals. As I listened to the manager discuss her department, she focused on areas where she knew they could do better. Her focus was on optimizing the staff that she has, and the outcomes match that level of commitment!

Gone are the days when inefficient staffing practices are defended in the name of quality. An optimized, balanced workforce is the is the key to a successful future.

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