In this episode, David Alemian, Founder of David Alemian’s Talent Retention Solutions, discusses boosting hospital profits, mastering talent retention for financial and operational excellence.
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Learn how to listen to The Hospital Finance Podcast® on your mobile device.Highlights of this episode include:
- How current talent retention challenges directly impact hospital financial stability
- Effective talent retention strategies for measurable cost savings in hospital operations
- How improving employee retention can contribute to better patient care and outcomes
- Risks of ignoring the integration of AI with talent management
Kelly Wisness: Hi, this is Kelly Wisness. Welcome back to the award-winning Hospital Finance Podcast. We’re pleased to welcome David Alemian. David brings over 29 years of experience in the financial services and insurance industries, where he developed a visionary strategy to address the national crisis of skilled labor shortages. His relentless pursuit led to the creation of a strategy so innovative that it earned a certificate of registration from the U.S. Copyright Office, a testament to its uniqueness and impact. David’s expertise extends beyond corporate boardrooms. His insights span a variety of sectors, including healthcare, where his strategies have proven essential in tackling critical workforce challenges. In addition to his talent retention expertise, David is a leading AI consultant showing organizations how to seamlessly integrate AI into their operations, enabling them to harness cutting-edge technology for greater efficiency, productivity, and profitability. His work has been featured in numerous respected publications, including Medical Economics, MD Magazine, Physician’s Money Digest, Physicians Practice, and numerous podcasts. In this episode, we’re discussing boosting hospital profits, mastering talent retention for financial and operational excellence. Welcome and thank you for joining us, David.
David Alemian: Well, thank you for having me. I appreciate that.
Kelly: Well, let’s go ahead and jump in. So could you describe how current talent retention challenges directly impact hospital financial stability and the emotional impact of these challenges on the leadership team?
David: Great question. Talent retention or turnover has a big impact on hospital financial stability. According to the Department of Labor, the cost to replace a highly educated employee earning $100,000 and up is more than double their salary. That means somebody earning $100,000, and that’s the floor, it costs $213,000 to replace them. Somebody earning a quarter of a million, and there’s a lot of them in the hospital industry, it cost $535,500 to replace that individual, and the average U.S. worker changes jobs every 4.1 years. That’s an amazing amount of money. A lot of hospitals and a lot of my clients…they track turnover with software, and I’ve never seen software that tracks turnover that actually puts the number in dollars. They might say, “Well, the turnover for our nurses is 18%, and the national average is,” whatever it is at that particular point in time, and they find that acceptable. But if you do the numbers, it literally runs into the millions. I mean, many hospitals are literally losing millions every year just to turnover. And the thing about turnover is you don’t get anything for that cost. Before, you had someone doing a job or a task or whatever it is, then there was a turnover, they left, and they were replaced by somebody else. What changed? Nothing except the bottom line.
So, if we could eliminate turnover or significantly mitigate it, hospitals could be in a much better financial position, and now the emotional impact of these challenges on the leadership team– most leaders will say that their most valuable asset is their team. And when people are constantly coming and going, it does have an emotional impact on them because they can’t get that feeling of security that their team is there for the long haul. So that’s how it impacts the financial stability and emotional impact of these challenges on the leadership team.
Kelly: Wow, that’s significant, really. So, in what ways have you seen effective talent retention strategies lead to measurable cost savings in hospital operations?
David: Oh, another great question. As I said, when we eliminate turnover, we eliminate that turnover cost. Now, as I mentioned before, it’s 213% of salary, and some people leave on average every 4.1 years. Well, if you put those two statistics together and you want to spread it out over the long run, for example, if you had a piece of equipment, and that equipment would cost $10,000, and it was going to last 10 years, then you could say, “All right, well with a 10-year period, the cost of that piece of equipment is $1,000 a year,” just for example. So if we were to spread out over time what turnover cost in percentages, you could take what you’re paying for your skilled labor and add 53% to the cost of that labor, and the way we do that is we take 213%, that turnover cost of salaries, and we divide it by 4.1, the years, and it gives us 53%. That’s an amazing amount of money, and that’s an amazing savings that you can have.
Kelly: It certainly is, yes, definitely. So how does improving employee retention contribute to better patient care and outcomes? And what does this mean for a hospital’s reputation and competitive edge?
David: It directly impacts patient care, and here’s why. When you have a team that’s together year in, year out, there’s a bond. And after a while, they work together like a well-oiled machine, which means we get better patient care and better outcomes. As opposed to, there always seems to be somebody new on the staff. There’s always somebody being trained, and when they’re being trained, that’s less attention that’s being paid to the patients. For example, if you have somebody who’s on the job for, say, six months, they’re not going to be as good at their job or whatever it is that they’re doing as someone who’s been there for the last 10 years. So, what does that mean to the hospital’s reputation and their competitive edge? Increases patient care, which directly relates to the hospital’s reputation and competitive edge. People want to go to the best, find the best care that they can find. They want to go to a hospital– when they have to go to a hospital, they want to know that they’re going to get the best care, and they’re going to be– it’s just going to be a better patient experience.
Kelly: It makes a lot of sense. I definitely agree with that. But can you share a success story where a hospital effectively implemented a retention strategy that led to significant financial and operational improvements?
David: I got one in mind. Actually, recent one. There’s a healthcare organization, and they started a spin-off company. They were a non-profit, and they started a spin-off. And that spinoff started about four years ago. And there were three people at the top of this particular second organization, and the first one was about 100-million-dollar organization. And the second one went from 0 to 80 million in as little as four years. That’s an amazing growth rate. So, the board of directors definitely did not want to lose these three highly talented individuals. So, we put together a retention plan that absolutely guarantees that these three talented and well-deserving individuals will enjoy the benefits of this retention plan, and they will stay all the way up until retirement. Now that’s commitment.
Kelly: It certainly is, especially in this day and age. So, what are the risks of ignoring the integration of AI with talent management in today’s healthcare environment?
David: AI is moving so fast that to some people, it’s like it came out of nowhere, but AI actually has been around for a long time, but then it got to a point just about two years ago where it literally exploded. And here’s where it works well in a healthcare environment, and the risk of ignoring it can be high, and here’s why: the patients want a quality patient experience. And with AI, there are so many things we can do with it. One of the things is just the front desk, for example. Now, most healthcare organizations will say when they get phone calls, 90% of the calls are the same thing over and over again. And maybe there’s someone that’s sitting there at admitting or at the front desk and they’re being taken care of by the front desk staff. And then the front desk, the person waiting on them or trying to give them good service, stops to answer the phone, which means now the patient is sitting there waiting. And then they come back and they’re talking some more, and then the phone rings again, and they stop and they answer the phone and so on and so forth. As opposed to AI, which could take all of those phone calls and answer 90% of them, which would mean that front desk staff can spend their time doing what they can really do well, and that is giving the patient the attention they need, answering their questions, and giving them a better experience. Another way that AI can help in the healthcare environment is it doesn’t matter what your position is. Whether you’re a front desk person, a nurse, a physician, or an executive, it makes no difference. Everyone has their high-level skill sets and high-level work that they perform, which is what they’re being paid for. And then there’s these low-level mundane tasks that they have to get done, and they take up time.
So, we can bring in AI to do those low-level, time-consuming tasks, which frees up time for the highly paid staff to focus on what they do best, which is whatever their skill set is, and it does two things. One, it creates better efficiency, but two, it creates happier employees because they’re not doing the boring, mundane tasks that they don’t want to do anymore, and they’re focused on doing what they love. And that’s one of the ways that it can help in a healthcare environment. Now, when a hospital does that, they’re going to work like a well-oiled machine. The hospital that doesn’t do that is stuck in the old way. And over time, patients will move to the place where they’re going to get better care and a better patient experience.
Kelly: Almost definitely. AI is definitely significantly impacting things all over the place. How can hospital CFOs leverage your retention solutions to ensure a more sustainable and profitable future while maintaining compliance and ethical standards?
David: My retention solution does exactly that. It saves them money. It stops turnover dead in its tracks, which means we increased the bottom line because we got rid of a cost, which means there’s more room for profit. Now, a lot of hospitals…they work on single digit margins. And about 60%, sometimes even more, percent of the cost of running a hospital is labor, and a lot of that is skilled labor. So, as I said before, over time, we’re eliminating a cost that’s adding 53% to the cost of labor, their biggest cost. So, we’re taking away literally their biggest hidden cost, and we’re improving the bottom line. As far as being sustainable– and that just helps make us more sustainable. And while maintaining compliance and ethical standards, well, again, when you have someone who’s been on the job and doing whatever it is that they’re doing, whether they’re an executive or a physician or a technology staff, and they’ve been doing it for a long time, they know what they’re supposed to do, and they know how to maintain their ethical standards. Where mistakes are made and where people may not maintain compliance is if they’re new on the job, or if they’re new in that particular work environment, and they may violate certain compliance protocols without even knowing it, and the only reason is because they’re so new.
Kelly: There are certainly a lot of challenges there. Yeah, it sounds like your system, your solution does assist with a lot of that. David, what first steps can CFOs and other leaders take immediately after this podcast to transform their talent retention approach?
David: Probably the best thing they could do is visit my website, take a look at it, and then reach out to me for a discovery call, and I can show them how they can literally stop turnover for any group of their employees. For example, if you’re a hospital and you have hundreds of employees, in some cases, thousands of employees, one of the best things they could do is start a pilot program using my talent retention approach. The great thing about this is that all of this turnover and how long someone is on the job is tracked. So, they’ll know how long this group is, what turnover was for this group before, and then they’ll know what it is after. And then as they see their success, they can roll it out throughout the whole organization. But probably the best thing would be to visit my website, schedule a discovery call, and see what’s the possibilities for their organization, and my website is Davidalimian.com.
Kelly: Wonderful. Thanks for providing that and for those actionable steps. We really appreciate you being with us today, David, for sharing your insights on boosting hospital profits, mastering talent retention for financial and operational excellence. Thanks again, David.
David: Thank you for having me.
Kelly: And if a listener wants to learn more or contact you to discuss this topic further, how best can they do that? I know you already mentioned your website, but is there another way they can reach you?
David: Sure, they could reach out to me on LinkedIn. I’m the only David Alemian on LinkedIn, so I’m easy to find. And you could connect with me there and send me a message there, or you could send me an email, David@davidalemian.com.
Kelly: Wonderful. Thank you for providing that, and thank you all for joining us for this episode of The Hospital Finance Podcast. Until next time…
[music] This concludes today’s episode of The Hospital Finance Podcast. For show notes and additional resources to help you protect and enhance revenue at your hospital, visit besler.com/podcasts. The Hospital Finance Podcast is a production of BESLER | SMART ABOUT REVENUE, TENACIOUS ABOUT RESULTS.
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