In our previous installment, we discussed the costs incurred with physician vacancies. If you missed it, find it here. In today’s ultra-competitive physician recruitment environment, the old axiom “Time is Money” is more relevant than ever. Depending on the specialty, a physician vacancy can result in over $150,000 per month in lost revenue.
In addition to lost revenue, recruitment costs to source, interview, and hire a new physician can also quickly add up. It has been established that from the time a position becomes vacant until a new physician signs a contract, internal costs incurred by a healthcare organization can easily reach $250,000 or more (including sign-on bonuses and relocation expenses). With that amount of money at stake, it is vital to benchmark your recruitment processes to identify weaknesses and inefficiencies and strive for continuous improvement.
Always Track These Physician Recruitment Metrics
At a minimum, every healthcare organization should track the following physician recruitment metrics:
- Time to Fill/Time to Hire
- Cost per Hire
- Physician Sourcing Statistics
- Number of Interviews to Hire
- Acceptance Rate Percentage
- Physician Retention Rates
If any of these data points are not available to your administrative team, it is difficult to gauge the effectiveness of your entire recruitment process. The good news is that the data is readily available in our digital world and easy to collate into actionable reporting.
1. Time to Fill/Time to Hire
It is essential to differentiate time-to-fill rates versus your time-to-hire, as they are often confused or used interchangeably. Both are important indicators of physician recruiting efficiency but tell a different story.
- Time to Fill – This indicator measures the total number of days it takes from the moment a job vacancy is posted to when an offer is accepted. Clearly, this metric indicates how effective your search was, but with a physician search, it doesn’t tell the whole story. Hence, the need for more data. If you’re curious, you can find Jackson Physician Search’s average time to fill for several specialties by using our physician recruitment ROI calculator.
- Time to Hire – As you know, the time between a physician accepting an offer until he or she begins seeing patients is measured in months, not days. Your time-to-hire metric should track when a candidate enters your pipeline until the first day on the job. Having this data available provides a better picture of your accumulated costs, which can then be used to track recruitment ROI.
2. Physician Cost Per Hire
Throughout the recruitment process, costs are accumulating. If you’re conducting the physician search in-house, you’re likely advertising the physician job ad across several physician job boards. If you’ve enlisted the support of a physician recruitment firm like Jackson Physician Search, you’re likely incurring recruiter fees. Tracking and keeping all of these costs visible to the team is one way to ensure everyone understands the importance of acting with sense of urgency.
3. Physician Sourcing Statistics
You can make sure the dollars you are spending in a physician search are not misplaced by tracking the effectiveness of the sources you are using. By now, your organization should be fully invested in a digital recruitment strategy. Simply put, physicians are no different than most in that they are digitally connected to their world. As many as 94% of all physicians use their cellphones for professional reasons, and 91% of them prefer to receive job notifications via email or text over direct mail and cold calls. Reliance on direct mail campaigns to source your next physician hire is ineffective. By closely studying which methods are actually bringing in candidates, you can make more informed decisions about the best use of your recruitment dollars.
4. Number of Interviews to Hire
One metric that is often overlooked but paints a very clear picture of recruiting efficiency is the number of interviews to hire. How many interviews does it take with a candidate before you decide to present an offer? Or better yet, how many different people does an individual have to meet with? One of the keys to developing an efficient process is making sure that the key decision-makers are available to participate. You will find a correlation between higher costs per hire and a high number of interviews, which should provide enough motivation to find ways to improve that process. Estimates show that reducing interview-to-hire ratios from 5:1 to 3:1 can save a healthcare organization $18,000. Additionally, in our recent research, we learned that only 27% of physician respondents decided to accept an employment offer after one on-site interview, so it is vital to make that first impression, a powerful one.
5. Acceptance Rate Percentage
In this highly competitive physician search environment, one of your most important indicators will be acceptance rate. Physicians are receiving 20 to 40 job notifications per week, which illustrates the competition for their services. Sometimes a poor offer acceptance rate is an indicator that your compensation data is off. This can be rectified with market research and bringing your salary offers in line with current rates. Or, you may want to supplement the contract dollars by adding in more vacation time or research opportunities. A physician recruitment partner can also supply your hiring team with real-time accurate data by specialty for your area.
In most cases, the best candidates have multiple offers to choose from. The biggest mistake you can make is not having the framework of a contract ready to go as quickly as possible, ideally during the on-site interview. If you are waiting a week or ten days to get executive approval on an offer, you risk losing the candidate.
Improving your acceptance rate by 20%, can save the organization $24,000.
6. Physician Retention Rates
In many ways, tracking physician retention rates can be the most perplexing of all the benchmarking activities. There are so many factors involved in retention that it can be a scary topic to tackle. One way to measure retention is by looking at your early physician turnover rate. This is the percentage of new hires that voluntarily leave the company within a year after starting. If this is happening with any frequency, you are either attracting the wrong type of candidate, or there is an organizational culture issue.
Physicians today place much more emphasis on finding a cultural fit for their services. It is critical to cultivate a work environment that is aligned with your organization’s mission and values. Having a strong identity/culture provides the roadmap for what type of physician is best suited to succeed. Cultural fit and other factors can be found when tracking retention over more extended periods, such as a 3-year and a 5-year rate. These indicators will force you to take a deeper dive into why the staff is leaving, but they are critical exercises to pursue.
The benchmarks we have covered are probably numbers you already have access to, and for most, they are being reported on a regular basis. The question is, “What are we doing with this data?”
Below are a few steps you can take today to start improving your recruitment processes through benchmarking:
- Establish a small team, and charter them with a benchmarking review. Tip: Empower them to make decisions about what data to use and how to report on it.
- The benchmarking team should determine if the appropriate data is being collected and what may be missing.
- Determine who is receiving the benchmarking data and who else needs to be receiving it.
- Look at the data over the past 12 to 24 months and look for trends and areas of opportunity.
- Determine where the bottlenecks are. For example, are you losing quality candidates to competing offers? Is it a process issue or a personnel issue?
- Consider whether a third party could help you improve your process.
The Quantity Over Quality Trap
Because the costs can be so staggering, it is easy to veer towards recruiting quantity over quality. That trap will end up costing you more in the long run because you aren’t placing enough emphasis on finding the right candidate. There is a balance required in attracting and hiring candidates who are best suited to fit and succeed in your organization. The benefits of hiring for fit (and, conversely, the costs of making the wrong hire) serve to reinforce the benefits of having a finely tuned physician recruitment plan. Here are a few tips to help you find the balance between quantity and quality:
- Start with an objective assessment of your workplace culture.
- Strive to understand what makes your best physicians successful.
- Discover how you can highlight your differentiators to attract like-minded physicians.
- Focus on the candidate whose values match what your team, organization, and community can provide.
The above tips are a starting point. As you learn and understand your organizational culture and the qualities that make up your most successful physicians, you are developing the strategic blueprint for future candidates.
If you have given all of the above serious consideration and still don’t have a clear path toward improvement, it is time to engage reinforcements. Today’s physician recruitment landscape is highly competitive, and finding a trusted physician search firm may be your best opportunity to source and land the quality physician candidates you need. Even if you are only looking for a partner to supplement your in-house staff, that can be the difference in seeing better results. Ideally, you will find a partner with the skills, experience, and resources to take an objective look at your processes and help you implement improvements. The key is to start paying attention to the data and taking whatever actions are necessary.
Our next installment will walk you through how to set up each physician search for a successful outcome. From targeting specific candidate types, to building a robust candidate pipeline, there are strategies available that increase your likelihood of finding the right physician.
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