August 31, 2020

The coronavirus pandemic has exposed one of the biggest challenges in U.S. healthcare—the need for experienced nurses. The lack of clinically experienced nurses at the bedside is a result of burnout, high turnover rates, and RN retirements. Traditionally, healthcare executives have turned to travel nurse agencies for critical needs, but there may be better options to consider.

With patient safety being one of the primary concerns of chief nursing officers in 2020, hospital leaders are looking for ways to bring long-term, skilled nurses on staff to bring stability to their units. Historically, travel nurses have been a good option for chief nursing officers looking to augment their team. They provide short-term contracts to hospitals to help fill temporary needs in their units. While travel nurses may be an excellent solution to solve specific challenges on a case-by-case basis, it won't solve chronic workforce shortages.

If you have used travel nurses in the past, but are looking for a more sustainable solution, travel nurses may not be the answer. Here is why you should think twice before you hire a travel nurse agency.

Travel Nurse Agency Labor Rates Have Skyrocketed 

Before the COVID-19 outbreak, travel nurses had high labor costs compared to other personnel alternatives. According to a study by HIT Consultant, travel nurse pay has doubled as a result of the coronavirus pandemic. The demand for frontline workers has increased to treat COVID-19 patients, leading to a significant increase in bill rates. 

Labor costs have been steadily rising in the past decade, reducing the overall hospital contingency spend. In an article from Healthcare Financial Management Association, labor expenses have increased from 50.6 percent to nearly 55 percent of total operating revenue from 2008 to 2018. This report does not factor in post-coronavirus rates, which will undoubtedly impact this number in years to come.

Cash-strapped hospitals across the U.S., most notably rural healthcare, have faced the brunt of high labor costs since it has been more difficult to retain experienced providers. Travel nurses have become a popular option in rural communities where it is hard to keep nurses at the bedside. The increase in operating costs has contributed to the closure of over 120 rural hospitals since 2010, according to the National Rural Health Association.

As labor rates continue to rise in hospitals, hospitals are seeking innovative solutions to help control costs.

Travelers May Indirectly Increase Attrition Costs and Vacancy Rates

It's not surprising that the top concern of chief nursing officers is recruitment and retention. With most nurses leaving their practice setting within the first two years, keeping and retaining experienced, skilled nurses on staff on a long-term basis is a priority for hospitals. If you are interested in learning about recruitment and retention strategies chief nursing officers are using in 2020, check out tactics from other nurse leaders on their respective facilities

Hospitals that struggle with high turnover rates end up paying more for attrition than they may realize. According to the 2020 NSI National Healthcare Retention & RN Staffing Report, the average cost of turnover is $44,000. These costs can account for training, orientation, potential signing bonuses, and lower productivity in the first few months. It is estimated that each percent change in RN turnover will save an average facility an additional $306,400 per year.

When chief nursing officers are focused on augmenting their staff with temporary contracts, they aren't investing in their core staff, which can cost more for the hospital in the long-run with the cost of attrition. Travel nurses tend to seem like an attractive option for nurse leaders when burnout and turnover rates are high, but they aren't solving the root of the problem—keeping skilled nurses on staff long-term.

Travel Nurses Can Disrupt the Culture

Travelers, who typically aren't adequately oriented into the organization's culture, can often cause workplace conflict with staff nurses. For hospitals that bring in a significant number of travel nurses, it can put added pressure on staff nurses in the unit, which can lead to animosity between RNs. Staff nurses may also feel resentful if they believe that travelers are getting paid more for the same job.

Another common issue that hospitals face when they bring on travelers is the internal recruitment of staff nurses to their travel nurse agency. Travel nursing can appear alluring to young nurses, which can have benefits, including the ability to travel, flexibility, short-term assignments, and sometimes higher wages. Retaining skilled nurses is already a challenge in itself. Still, when travel nurses are looking to recruit permanent staff nurses out of your organization, it can lead to a higher turnover rate within a facility.

Aside from the drawbacks of potential animosity and internal recruitment, travel nurses aren't integrated into the culture of a hospital. All permanent nurses that start in a healthcare facility must go through a comprehensive orientation process to integrate into the culture. Due to the nature of travel nursing, they aren't typically adequately oriented to the organization, which can sometimes lead to culture disruption and inconsistent patient care.

Travel Nurses Won't Fix Chronic Shortages

With the deepening nursing shortage, there is an urgent need for a sustainable solution for the U.S. healthcare system. According to the 2020 Trends in Nurse Staffing Study, 83 percent of hospitals anticipate more than ten nurse vacancies this year (up from nine percent from 2019). With more nurses retiring as the population ages, this number is projected to go up.

While travelers can bring immense help to healthcare facilities on a short-term basis, they may not be an answer for chronic shortages, especially with traveler labor costs on the rise. Nurse leaders should find alternative ways to supplement their staff to provide long-term retention of experienced healthcare professionals. Seeking an alternative solution can also lead to an increase in contingency spend and retention rates. Leaders should shift their focus to building a strong, mission-driven, permanent core staff. 

Alternatives to Hiring a Travel Nurse Agency

When hiring a nurse staffing agency, chief nursing officers focus on three primary factors to make their decision: speed, quality, and price. 

Speed is the rate at which you need a nurse placed in your facility to fill a vacancy. While speed is an essential factor in the short-term, you may be compromising on the quality of the nurses. Having quality nurses, on the other hand, is typically worth the investment. A quality nurse is not only experienced and hardworking but also fits well into the culture of the organization; they prioritize teamwork, communication, and patient safety. Another primary decision factor is labor costs. When looking to increase contingency spend, it may be desirable for hospitals to select staffing agencies that promise low fees or rates. Lower prices do not always equate to quality or speed.

Understanding these factors will help best decide which types of alternative solutions to consider. A more comprehensive look into these factors can be found here.

Temp-to-Perm: International Nurse Staffing

Temp-to-perm contracts allow the nurse to work for a designated period before converting. A temp-to-perm placement is a good way for both the nurse and chief nursing officer to test out the arrangement without a hard commitment. Temp-to-perm options are an excellent way to fill immediate gaps, but also offer long-term stability once they convert to the hospital's full-time staff. International nurse staffing agencies are a popular choice for temp-to-perm placements.

International nurses are recruited through agencies like Avant Healthcare Professionals to work in America. They work on a contract (for the agency) at the client's facility until they convert to the facility's full-time staff. These contracts can last for two to three years. The advantages of international nurse staffing are that the rates can be significantly less than travel, you can add stability to high turnover units and reduce burnout, and eventually transition the nurse to your full-time core staff.

If international staffing is a route you are considering, ensure they are a member of the American Association of International Recruitment (AAIHR) is a 501(c)(6) not-for-profit organization that assures standards of ethical conduct among organizations engaged in international recruitment. To assist you in selecting an international nurse staffing agency, here is a comprehensive checklist of questions to ask when making your decision.

Focus on Recruitment and Retention Strategies

Nurse leaders should prioritize strengthening organizational culture and focus on promoting RN recruitment and retention. Doing so will lead to decreasing burnout and lowering turnover rates. By hiring quality nurses and keeping more experienced nurses on staff, it will lessen the reliance on travelers.

In Avant Healthcare Professionals' annual CNO Roundtable, strategies discussed to recruit and retain nurses include building newly licensed nurse (NLRNs) programs, fostering academic partnerships, recruiting international nurses, and investing in the capital for internal recruitment and retention activities. Additional tactics included tuition reimbursement, housing assistance, student loan assistance program, and marketing collateral that highlights the facilities' unique value proposition.

The COVID-19 pandemic added an extra layer of challenge regarding burnout, as nurse mental health became the forefront of conversation during the outbreak. If you are looking for additional strategies nurse leaders are using as a result of the virus, visit our comprehensive guide to navigating nurse staffing post-COVID-19.

The Bottom Line

The nursing shortage is still projected to worsen in the next decade, which will increase the need for sustainable solutions in nurse staffing. Hiring a travel nurse agency has long been a go-to for chief nursing officers looking to augment their staff. Still, with labor costs for travel nurses skyrocketing, there is a need for a more innovative approach in healthcare staffing.