How do you know how many FTEs you need?

With personnel expense making up more than half of the total operating cost of most hospitals and health systems, it essential to understand how many FTEs your organization truly needs to run efficiently.

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 period or 2080 hours per year. It is important to remember that an FTE is not a “body” or an 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 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 significant cause for concern, but that is not the only reason that proper staffing is so critical. A right-sized complement 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, 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 a better quality of care. Unfortunately, adding FTEs does not 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. Gone are the days when inefficient staffing practices are defended in the name of quality. An optimized, balanced workforce is the key to a successful future.

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