Academic journal article Online Journal of Issues in Nursing

The Costs and Benefits of Nurse Turnover: A Business Case for Nurse Retention

Academic journal article Online Journal of Issues in Nursing

The Costs and Benefits of Nurse Turnover: A Business Case for Nurse Retention

Article excerpt

Abstract

Nurse turnover is a recurring problem for health care organizations. Nurse retention focuses on preventing nurse turnover and keeping nurses in an organization's employment. However, decisions about nurse turnover and retention are often made without the support of full and complete knowledge of their associated costs and benefits. This article identifies common nurse turnover and retention costs and benefits, discusses the use of benefit-cost and cost-effectiveness analysis relevant to nurse turnover and retention, and calls for the construction of a business case for nurse retention. It also provides a foundation for including the costs and benefits of nurse turnover and retention in estimating the economic value of nursing.

Citation: Jones, C., Gates, M., (September 30, 2007) "The Costs and Benefits of Nurse Turnover: A Business Case for Nurse Retention" OJIN: The Online Journal of Issues in Nursing. Vol. 12 No. 3, Manuscript 4. Available: www.nursingworld.org/MainMenuCategories/ANAMarketplace/ANAPeriodicals/OJIN/TableofContents/Volume122007/No3Sept07/NurseRetention.aspx

Key words: benefits; business case, costs, nurse turnover, nurse retention

Concerns about registered nurse (RN) turnover become heightened during times of nurse shortages. These concerns originate from both non-economic and economic sources. On the non-economic side, there are concerns about the practicalities: retaining adequate numbers of RNs to appropriately provide safe care to patients; over-burdening existing staff with increased workloads and demands that may bring about more staff turnovers; and recruiting and attracting quality RNs to fill vacancies. On the economic side, there are concerns about the costs of turnover, the loss of nursing human capital, and the potential effects on quality of care. These concerns currently are being voiced by a wide array of individuals, from bedside nurses to nurse managers and executives, and from hospital executives to health care economists.

There is fairly substantial evidence to support the position that nurse turnover is costly (Advisory Board, 1999; Jones, 2005; OBrien-Pallas et al., 2006; Waldman, Kelly, Sanjeev, & Smith, 2004). Yet ...we know very little about the actual costs of nurse retention or the economic benefits of nurse retention and turnover. we know very little about the actual costs of nurse retention or the economic benefits of nurse retention and turnover. There are widely held beliefs that the costs of nurse turnover far outweigh its benefits, and that the benefits of nurse retention far exceed its costs. However, until the missing pieces of the turnover-retention relationship can be quantified, we lack the evidence upon which policy makers and administrators can construct well-informed decisions and strategies. In this article, we attempt to discern the costs and benefits of nurse turnover and nurse retention in an effort to lay the foundation for estimating the economic value of nursing (i.e., that relationship between the costs of RNs relative to the quality gains derived from their employment). In turn, we hope to fuel interest in developing a business case for nurse retention and call upon nurses, nurse leaders, and health care executives to join in this effort.

The Costs and Benefits of RN Turnover

Recent studies of the costs of nurse turnover have reported results ranging from about $22,000 to over $64,000 (U.S.) per nurse turnover (Advisory Board, 1999; Jones, 2005; OBrien-Pallas et al., 2006; Stone et al., 2003; Waldman et al., 2004). The reasons for this variability can be attributed to a variety of factors, but principally emanate from conceptual differences, such as defining nurse turnover cost categories, as well as methodological differences, such as study designs and samples. Two of the studies cited above that reported the highest costs (Advisory Board; Jones) defined and measured more extensive turnover-related productivity losses (e. …

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