Executive Insight: The True Cost of Layoffs

Jill Schwieters, President of Cielo Healthcare, was interviewed by healthcare magazine Executive Insight and is featured in recent article that examines the costs of layoffs in the healthcare industry, and what alternatives hospitals may have instead. While a hospital leader’s first instinct when faced with a tightening budget may be to reduce their workforce, there are strategies and alternatives to simply laying off employees.

Excerpts from the article:

“Financial pressures are alive and well in hospitals,” observed Jill Schwieters, president of Cielo Healthcare, formerly Pinstripe Healthcare. “Labor costs are the biggest expense within a health system, so it’s natural to make those cuts first. But with the right strategies in place, layoffs don’t have to be the answer.”

Alternative Solutions
Schwieters encourages hospital leaders to understand how the current workforce is performing. “Strategic workforce plans look broadly across organizations to ensure the right resources are in the right place at the right time,” she said. “What are your needs, where is the volume or demand from consumers and who do you have to deliver?”

By identifying strengths in one area that could benefit another, hospitals can redeploy staff to make budget cuts. To improve a staffing imbalance, Schwieters suggests moving an employee to a high-volume area instead of bringing in a per diem employee at a higher rate.

As delivery systems are changing, employee roles are changing, Schwieters said. “Hospitals can take a twofold approach: redeploy employees to similar roles or redeploy in new roles and build upon the competency of the individual,” she shared.

Saving Face
According to Schwieters, layoffs negatively impact the individual but there’s also survivor syndrome to consider. “Hiring freezes and layoffs harm the culture and morale of a workplace,” she said. “The events are perceived as a breaking of trust between staff and administration.”

Looking Ahead
To offset financial constraints, healthcare leaders can strategically consider the necessity of filling an opening as employees resign or retire. “Attrition needs to be part of the bigger plan,” Schwieters said. “No job should be automatically replaced in healthcare.”

A good strategic workforce plan considers the demands of the workplace over the next three to five years, according to Schwieters. “These plans are shorter than they used to be because of the economy in general and global volatility,” she said. “A strong plan is vital but more importantly, the organization needs to be agile and nimble.”


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