An Evaluation of Healthcare Workforce Labor Costs

 Three Key Drivers of Labor Costs within A Specific Health Care Service, Facility, Or Other Health Sector-Related Occupation

For the past decade, the labor share of hospital total expenses has been increasing. According to the Healthcare Financial Management Association (HFMA), hospitals in the US have created 586,500 new jobs in the past decade, significantly increasing cost pressure (Daly, 2019). Some of the factors driving labor costs within hospitals include new staff needed to fulfill their missions embarked in the past decade, labor supply, and productivity improvement efforts.

Read also Managing Diversity and Promoting Multi-Cultural Competency in Healthcare Workforce

Read also Using Human Resource Analytics to Improve Health Care Workforce

            Over the past decade, hospitals have created new job positions to fulfill the missions they have adopted in response to increasing quality requirements. This includes staff needed to implement electronic health records (EHRs), tracking social determinants of health, and other information technology initiatives (Daly, 2019). The additional staff required to implement these initiatives has considerably contributed to the increased labor cost. Hospitals can control this cost driver by fully leveraging technology. Automating most information technology functions can help minimize the number of staff required to oversee the initiatives.

Read also How Federal Healthcare Policies Impact Consumer Costs

            The tightening labor market has also contributed to the increased cost of labor within hospitals. Due to population increase and increasing competition from private hospitals, the tightening labor market has led to higher wage demands. Hospitals, therefore, have more staff than they used to have, and these employees are demanding relatively higher wages. Besides the high salaries, the hospitals are compelled to offer attractive personnel benefits to retain their staff (Aksenova et al., 2020). Thus, decreased labor supply has contributed to the increased cost of labor. Hospitals can address this factor by investing in strategies aimed to improve employee retention. This starts in the recruitment process by identifying employees who will stay the course and providing a favorable working environment undergirded by the organizational culture.

Rea also Key Drivers of Labor Cost within a Hospital

             Due to the increasing competition in the healthcare industry, hospitals have been compelled to find ways to bolster their productivity. Consequently, hospitals have spent considerable amounts of money and time enhancing employee productivity in the past decade. Some of the strategies used to improve productivity include employee training, giving perks, and other bonuses (Emanuel, 2018). A solution that can help address this factor is focusing on intrinsic motivators instead of extrinsic motivators when designing frameworks for attracting and retaining employees.

Future Changes that Might Accelerate or Exacerbate the Solutions ro Labor Costs

            Whereas the proposed solutions have a high potential to slow down the increasingly growing cost of labor costs within hospitals, various trends deter the proposed solutions from achieving the desired outcomes. To start with, the growing trend of consumerism can prove challenging to the solutions. Hospitals will be forced to respond to consumerism by adding staff as navigators to guide patients requiring by answering non-clinical questions and guide patients requiring cosmetic surgery, among other needs driven by consumerism. Additionally, the increasing entry of Generation Z into the workforce means that Generation Z and Millennials will soon constitute most of the workforce. Notably, the two generations have unique employee needs that will require organizations to devise new strategies for attracting and retaining them as well as motivating them to enhance productivity. Lastly, the shrinking labor market means that the labor supply will continue to shrink, causing wages to rise. Nonetheless, through proper planning, the healthcare industry can counter these threats.

Read also Variance Analysis of Labor and Material Costs

Need a Professional Writer to Work on Your Assignments? We will deliver Unique and Quality Work. Good Grade Guarantee!!

Order Unique Answer Now