Managing your workforce

Share this article:
Managing your workforce
Managing your workforce
There is no question that financial challenges are the top concern of a large majority of long term care executives. The increasing cost of staff and supplies are an overwhelming issue within the healthcare industry. [For more, see the American College of Healthcare Executives (ACHE) 2007 survey of 1,080 hospital CEOs.]

For some, total labor costs as a percent of net patient revenues is above industry norms.  For others, increasing labor costs are a product of poorly designed compensation programs that stack premiums on top of one another in ways the originators of the individual incentive programs did not expect, but employees have become adept at manipulating.  And finally, for some, spiraling costs are a symptom of scheduling practices that aren't based on the bottom line.

Within this increasingly competitive market there are a few long term care leaders who have found a solution to these critical problems. These technologically savvy organizations have realized the value of the latest workforce management technology systems. They have recognized that the issue is not just one of “process” but “intelligence” and the lack of the proper tools to effectively manage these problems is not only a cost, but an impediment to greater revenues.

What makes these leaders special? There are some key differences in the way they look at workforce management technology and how they use it. They have in effect become specialists in managing labor cost and utilization.

The comparison is not unlike the difference between the average Sunday driver and an Indy race car champion. One is moving along slowly in first gear, going over the same roads they've always traveled. The other is a trained driver getting the most out of his high performance engine. The winners in this category gain financially, garnering fans and glory.  

If you're ready to graduate from casually driving around in your present workforce management systems there are some lessons to learn from those who have transported themselves into the driver's seat of a financially healthy, competitive long term care champion.

1.    Overcome the tendency to look at workforce management technology (WMT) as a commodity. It is not simply a system to automate current processes. WMT is a tool to manage labor cost and productivity. It is also an ROI driver – yes – a source of greater revenue when used effectively. Understand the value it will deliver, not just the price tag.

2.    Assess where your organization is today. Analyze financial statements, compensation programs, business processes, and payroll leakage relative to labor costs. In addition, obtain data about your position in the market to benchmark your performance compared to other similar organizations. Collect the data. Define your benchmarks. Look for ways to create new line items so you can measure the decisions and functions that are costing you so much today (absenteeism, overstaffing, non-productive time, etc.).

3.    Campaign for executive buy-in so that you obtain a mandate from the highest levels for change. The organizational and culture change may be significant. But it can be done when managers are held accountable and leadership remains actively involved in the deployment of the new WMT.

4.    Include all areas of the organization. Surprisingly, those of us in this industry frequently see WMT systems being deployed only to clinical and nursing areas. While these are the low hanging fruit they typically account for 60% of total labor costs – leaving 40% of the opportunity on the shelf.

5.    Design and manage your WMT system for ROI – not to the project budget and schedule. Executive leadership and key stakeholders should hold design reviews that validate and guarantee that the expected positive outcomes will be achieved. Success is not defined by project deployment measures. Success is achieving the improvements.  

Today's innovators/leaders will be tomorrow's norm among successful healthcare leaders. It is imperative that financial managers in the long term care industry get their arms around cost and revenue. The only organizations that will remain financially viable are those that adapt. It's isn't a matter of if, but when they start to leverage the technology and start managing their workforce with the tools and intelligence that is available.   

What is Workforce Management Technology?

Workforce Management Technology (WMT) is the evolving centerpiece of managing worker activity and cost.  It is the best tool for treating human capital as a valuable asset.  WMT encompasses systems and business solutions designed to effectively administer labor related processes, including acquisition, training, compensation, time and attendance, planning, automated workflow, productivity analysis and retention.

The cornerstones of these systems are the timekeeping and scheduling components. This is where labor activity, cost, and business intelligence converge. WMT blends key performance indicators (KPI) with work activity to create actionable data. Those KPI's include information about the operational side of the business such as work volume, location, equipment and task/procedure, customer/patient data, and employee demographics (e.g. skills, availability, contract requirements, & rates).

These action items include alerts for managers about tasks they must perform, staffing and labor activity they need to manage, and how close they are to achieving goals such as limiting labor expense, managing attendance and productivity, and ensuring quality work is completed on schedule.

WMT is where the work gets done, where labor brings the products and services to life. Unlike traditional payroll systems which generate an historical, two dimensional picture of labor expense (who and how much), today's WMT provides visibility into what is happening now and what's about to happen.

It also adds two more dimensions - what and where labor activity is taking place.   Timekeeping is the proverbial dashboard for the drivers of the business. WMT becomes a virtual workspace where decisions are made and activity is tracked and projected, telling the company where they are headed and whether they are on target - financially, operationally, and strategically - or not. 

WMT systems effectively manage large sums of money.  In many organizations, labor is the largest expense.  Without a WMT system it may also be the least “managed” cost.

A payroll system is merely an administrator for these outsiders, none of whom created their rules in the interest of the employer.  WMT puts the employer in the driver's seat, using what they know about their operations and resources to get the work done most efficiently.  It's demand-driven workforce economics and WMT is better at enforcing the rules and regulations, resulting in more profits.  Payroll is the bean counter's tool – WMT is for those wanting benefits.

Unfortunately, there is a prejudice in the business community that keeps anything associated with certain business functions out of the most elite inner circles.  Popular misconceptions include:  “Decision makers don't come from these areas,”  “Business problems aren't solved from their efforts,” “Profits aren't increased by investing in their infrastructure.”

American College of Healthcare Executives (ACHE) 2007 survey of 1080 hospital CEOs
Lisa Disselkamp is president of Athena Enterprises, LLC, a consulting firm specializing in workforce management technology implementations and business practices.  A Subject Matter Expert (SME) and functional and technical consultant on time and attendance software, compensation, scheduling, labor analytics,  & system ROI, Disselkamp guides client teams thru all phases of system selection, design, roll-out, training, and optimization.  She has led multi-million dollar implementation projects impacting up to 70,000 employees in companies with billion dollar payrolls.  Disselkamp is also the author of Working the Clock, the first and only book focusing solely on Workforce Management technology. A Charter member of the Workforce Productivity Technology Council, Disselkamp is a noted guest speaker and presenter in the industry.
She can be reached at ldisselkamp@athena-enterprises.net or at 800.944.9981.

Share this article:

Guest Columns

Guest columns are written by long-term care industry experts, ranging from academics and thought leaders to administrators and CEOs.

ALL MCKNIGHT'S BLOGS

More in Guest columns

Intern gains life lessons on retirement living and memory support

Intern gains life lessons on retirement living and ...

When I came to Baltimore-based Erickson Living to work as a public relations summer intern, I imagined I would enrich my PR experiences and skills, but I never dreamed I'd ...

Focus on preventable readmissions

Focus on preventable readmissions

Readmissions have become an increasingly urgent concern for skilled nursing facilities not only because they are traumatic for residents, but also because under the Affordable Care Act, hospitals' Medicare reimbursements ...

A plan for drug diversion

A plan for drug diversion

One timely topic that is both difficult to comprehend and discuss is drug diversion in long-term care. Long-term care leaders must have a solid system in place with policies and ...