Nursing Turnover Costs Hospitals Up to $6.5M Each Year

Nursing turnover is costing hospitals millions of dollars each year as the rate of registered nurses (RNs) leaving their organizations continues to rise.

NSI Nursing Solutions, Inc. recently reported in its annual NSI National Health Care Retention & RN Staffing Report that nursing turnover for staff RNs increased by 2.8 percent in 2020, causing the rate to rise to a total of 18.7 percent. Nurses working in step down, behavioral health, and emergency services experienced the highest turnover.

The rise in nursing turnover, especially in behavioral health and emergency medicine, was a major blow to hospitals last year. The facilities had reached capacity if not once but multiple times over the past year, battling the COVID-19 pandemic and its impact on patient populations. The rising rate also hit hospital pockets.

The report estimated that the average cost of turnover for a bedside RN was a little over $40,000, but could be as high as $51,700. That means the average hospital lost between $3.6 million to $6.5 million last year for nursing turnover.

“The cost of turnover can have a profound impact on diminishing hospital margins and needs to be managed,” NSI Nursing Solutions, Inc. stated in the report.

Hospitals are committed to reducing turnover across their organizations. Total hospital turnover also increased in 2020, rising by 1.7 percent to stand at 19.5 percent. That means hospitals did not fulfill their previous goal of reducing turnover by 3.7 percent in 2020. However, the report showed that hospitals have “doubled down” and set a new goal of reducing turnover by 4.7 percent.

If they are successful at reducing turnover, they could improve quality outcomes and patient experience, and even save hundreds of thousands of dollars. The report found that each percentage change in RN turnover would save the average hospital about $270,800 a year.

But hospitals and health systems have a long road ahead of them if they want to decrease nursing turnover.

A significant concern, according to the report, is that 62 percent of all hospitals have an RN vacancy rate higher than 7.5 percent.

“Given the economy and impact of COVID, RNs are no longer delaying retirement, and many have gone back to travel nursing, particularly given the lucrative contracts,” the report stated. “During the pandemic, travel nurse packages reached $10,000/week. As the demand for RNs increase and as Baby Boomers reach retirement, expect the vacancy rate to further deteriorate.”

Notably, retirement was the third most common reason for nursing turnover, behind relocation and career advancement, and this was the first time it placed in the top three reasons. Whether retirement rose to the top three because of the RN workforce of the COVID-19 pandemic was not asked, authors of the report noted.

But authors of the report expect retirement to remain high on the list of reasons for nursing turnover through 2030.

“Hospitals are getting the message with more than half (52.6 [percent]) having a strategy that focuses on retaining the older nurse. In 2018, just 21.6 [percent] had such a strategy,” the report stated.

Other reasons for nursing turnover included personal reasons, education, working conditions, salary, scheduling, and commute.

The nursing workforce has had a difficult year and many nurses are fed up with conditions at their hospitals or health systems. This unrest has resulted in several strikes at organizations across the country, including a seven-month strike involving nurses at Saint Vincent Hospital in Massachusetts.

“Thousands more [nurses] are struggling with impossible patient loads. Most of us leave work exhausted and unfulfilled, unable to deliver the kind of care we’re trained for,” writes Judy Sheridan-Gonzalez, RN, of the New York State Nurses Association. “Like teachers, we’re responsible for a precious yet vulnerable population, are beloved by the communities we serve and exploited by the systems we work under.”

Nurses want “to practice our profession with the respect it deserves,” Sheridan-Gonzalez continues.

“We want to care properly for our patients. We want to rejuvenate the joys of compassionate care, to ensure its rewards will excite our youth and encourage them to pursue nursing as a career. We want the necessary tools to do our job. We want to go home knowing we can also care for our families and ourselves.”

More strikes are likely to happen—just last week 24,000 Kaiser Permanente nurses and healthcare workers said they have authorized a strike. The conditions will make talent retention and acquisition difficult for hospitals battling already high nursing turnover rates.