Sometimes getting more can cost less…..

 In Compensation, Organization, Staffing

One of the best places to look for improvements in health center performance, as well as improvement in the quality (and quality of life) of your workforce is at the entry level — particularly in the front office and basic clinical functions.  Interested in raises of 50% and reducing labor costs more than 30%?  It’s possible.  Today we’ll explore how to do more with less, and improve your ability to compensate high quality entry-level staff.

The lower levels of many M/CHCs is where you’ll find the most extra staffing, some of the poorer performers, and some of the biggest pay issues.  It’s a problematic part of the workforce, because of the nature of the jobs and the skills/attitudes of potential workers.  It’s often a vicious circle:  Bringing in entry-level folks at the minimum wage or just above, health centers experience about the amount of productivity (or complexity of work) that you’d expect from people who can’t get jobs at higher rates of pay.  At this level, jobs must be kept very basic, with specific tasks, and frequently jobs that would be seen as single roles are split into smaller simpler roles.  Turnover is high, often from the best performers leveraging their experience to get new jobs; this is also the segment of the population that moves in and out of the workforce the most.  To accommodate lower levels of performance, minimize training expense, turnover costs and lost productivity, the employer simplifies the job, resulting in still more people to do the same amount of work.  Patients experience the frustration of having to deal with several employees to accomplish simple procedures, and overtime can be extensive because employees aren’t trained to do more than their own tasks.

The pay issue compounds the organizational problem.  With so many employees, giving even a small increase to everyone can be difficult, and justifying a higher pay rate for the job is impractical or impossible.  Without the ability to actually measure productivity, maintaining a separate “level” or even just a different rate of pay for some employees can be difficult, and result in morale problems.  While it may be easy to tell who the better employees are, it can be difficult to justify to others why some should be paid more.  The result?  The best people leave, either because they aren’t feeling rewarded (compared to those with lower levels of performance) or simply because they are bored and have nowhere to go.

Here’s a possible solution.

Look at your processes in terms of how they would best be performed, regardless of the jobs/people you currently have.  For example, look at the number of processes that take place at the front desk (intake/checkout, payment processing, answering the phone, referrals and scheduling, etc.).  Include tasks that could be completed at the front desk, even if they aren’t now.  Watch particularly for tasks performed by employees that aren’t busy all the time (e.g., referrals).  Most if not all of these functions can be performed by one person, if the person is properly trained.  Look at the volume of work (patient traffic) and determine the hours of work you would need during a week.  Say your office is open 11 hours a day, five days a week, and that the average patient traffic would require three employees per hour.  That’s about 165 hours, per week, or just about four employees.  Now look at your own staffing, and see how many different jobs you have.  If you have, say three different jobs covering all of the front desk functions, you could easily have five or six people behind the desk at one time — that’s 275 to 330 hours a week, or seven to nine employees.

Before you say “I can’t find someone who can do everything behind the desk at $8/hour” and stop reading, pull out your calculator and do the math.  At $8/hour for eight employees, your annual pay cost (assuming no overtime), would be $133,120, plus another 10% or so in payroll taxes and mandatory benefits, for a total of $183,000.  Now add health insurance and other fixed cost benefits, remembering that as a percent of pay, the entry-level employees probably have the highest cost of any in your organization.  Let’s say you pay an average of $6,000/year in benefits per employee.  Your total cost for these eight employees is about $194,400.  Now lets assume in your market you can find someone who CAN do all the front office functions for $12/hour.   At $12/hour, your four employees will cost $99,800 plus $9,980 in payroll taxes, but only $24,000 in benefits, for a total of $133,780.

Final tally?  Savings of almost $61,000 (more than 31%!), while providing much more meaningful employment opportunities and perhaps even increases of 50% if some of your current employees can step up.  The beauty of it all is that this type of transition will be accomplished relatively quickly through attrition.  Effectively, everyone wins, employees, the organization, and patients.

Now every situation will not prove this compelling, but if you look closely, you’ll likely find several processes you’ve got where specialization is causing inefficiency and extra staff.  I’ve found several examples in health centers over the last couple of years where problems with efficiency, payroll and morale can be solved quickly with just a little bit of creativity and changing the belief that “we have to do things this way.”