Introduction

The health sector is an important sector in the economy. Just like any other sector of the economy, the healthcare industry faces the pressures of making profits from their endeavors. When this happens, they have to seek strategies cognizant of the market trends that would help them realize considerable profit margins. One of the strategies being adopted by hospitals to drive up their profits is based on their personnel. Being a labor driven sector, the health industry is seeking to reduce costs involved in staffing (McKenna et al., 2011). The way to do this is by using data to drive staffing decisions. The human resource departments in the health sector are widely using data, to help them make crucial decisions on staff recruitment, hiring, transfers and other such related functions. These health facilities have different stakeholders that range from nurses, doctors, laboratory technicians, accounting officers, the management among others. It is, therefore, important to ensure that the facilities have the right mix of this personnel to ensure utmost productivity in the organization. Also, the health sector is expected to hold high organizational values that ensure that service provision in the industry meets the expected standards. This assessment process will be critical for the organization as it will give a platform for profit maximization as well as improved efficiency in the organization’s daily operations.

Analysis

To improve efficiency and profitability in the health sector, it is wise to carry out an intensive research to pinpoint the necessary areas of improvement. For example, in this case, the staffing decisions in the sector are the weighty subject that the organization must be equipped. Failure to make the right staffing decisions can be very costly to the organization and may also lead to a decline in the efficiency (Graban, 2016). Use of secondary data has been an essential analysis tool that has been widely used by the human resource departments in making crucial decisions on staff recruitment, hiring, transfers and other such related functions.

Previous studies have indicated that staffing expenses are the most expensive expenses in a healthcare sector. It is for this reason that the human resource management must ensure that there are no instances of overstaffing or understaffing in the organization at any given time. For instance, overstaffing in the organization implies that the firm will have to cater for unnecessary payments, and this will have adverse effects on the overall profitability of the firm. On the other hand, understaffing in the health care organization can also not be tolerated as it means that the efficiency in service delivery at the facility will also be badly affected. Crucial decisions have to be made, making this trend of using data even more important. Data makes decisions look measurable and quantifiable. It might be tedious, but when the organizations get used to it, cost efficiency is realized.

As aforementioned, most decision-making practices in the health sector are based on as this makes them look measurable and quantifiable. For instance, staffing decisions have been named as a critical aspect in the success of any healthcare organization. To get the right mix of personnel required in an organization, it is imperative for the human resource management to ensure that they have correct measurements and benchmarks upon which their decision making is based. For example, the number of employees in a given health facility will mainly be dependent on the size of the hospital regarding bed capacity and the number of patients that the firm can hold at a given time. Also, the hours of operations will also be a great indicator of the right number of organizational employees that the firm should hold at a time.

Besides the hospital’s capacity, other important aspects influence an organization’s decision making. For example, hospitals adjusting are another important benchmark that has been used by healthcare providers to influence major staffing decisions in their hospitals. Previous researches have proved that efficiency of nursing staff can be improved if the nurses are adjusted after every eight hours (Dunn, 2009).  If a hospital intends to use this strategy with their employees, it is then prudent for the human resource department to ensure that they have the right number of staffs. Every work shift must have the right number of personnel to make sure that service delivery in these facilities meets the expected levels. Having the right number of nurses will help the firm avoid overtime costs and also avoid having excess staff in the organization working at a certain time.

The main issue here is having flexible work schedules. At no one time shall there be more than required nursing staff in the health facility. The need for hospital adjusting has been approved by other hospitals and other consulting firms. It is, therefore, important for health organizations to ensure that they have the right staffing mix that will make sure that they can do the adjusting. The adjustments are helping institutions like Goshen System have flexible staffing. The point is that they won’t spend on unnecessary staff options at any particular time. Efficient staffing is the strategy worth brainstorming with everyone within the organization. Administrators must first ensure that it is workable within the organization, it is not an emotional or conventional decision, and rather it is data driven.

Another valuable benchmarking tool that firms in the health sector must adopt in their strategic approach is the organizational needs of the firm. Although data will be critical to in strategic positioning of the firm, the company’s needs will also be essential in making major organizational decisions. For instance, the staffing decisions in a health facility will mainly be influenced by the projections of the firm and its aspirations. It is vital for the management of the firm to carry out intensive data mining to ensure quality satisfaction and fulfillment of the organizational needs. Basing decision making in an organization on the firm’s needs will be essential as it will help reduce wastages and maximize profits and efficiency in these organizations.

Risk Analysis

Risk analysis is another important aspect in organizational assessment. It is important for the management of health organizations to be wary of the potential risks that may arise in making major decisions in the management of health facilities. Risk can be hard to spot, however, let alone prepare for and manage. And, if you’re hit by a consequence that you hadn’t planned for, costs, time, and reputations could be on the line (Dunn, 2009).  Risk analysis, therefore, becomes an important aspect in organizational assessment as it helps in identifying and understanding potential risks, as well as mitigating factors that can help, reduces the adverse effects of the risks and in plan implementation of the firm. In essence, risk analysis is an important aspect in organizational assessment as risks may be a hindrance to the effectiveness of the program implementation.

The Health sector industry has several challenges that may pose the great risk especially when it comes to staffing decisions. The healthcare industry is increasingly facing challenges to improve staffing metrics for better financial returns. Staffing metrics are the indicators of performance by staff. This is something very crucial for the human resources department in developing things like appraisal systems for employees and making promotional decisions (Inman, Blumenfeld & Ko, 2005). Having accurate data on this issue is crucial if staffing decisions are to aid the financial wellbeing of the organization. The desire is having accurate data from reporting time, patients served and such other factors. It is imperative to point out that the human resource management must cope with the risks that may arise from staffing metrics. All the employees in an organization must feel secure in their course of duty and any sense of fear may adversely affect the profitability and productivity of the firm. Higher levels of efficiency in medical organizations are necessary for the navigation of the current realities facing the pharmaceutical sector.

Besides the challenges of staffing metrics, the health sector must also be in agreement with the provisions of the state and federal laws. For instance, the personnel in the health sectors are mostly nurses and medical practitioners who must be accredited with government and federal statutes. Institutions providing health services must make sure that thy only hire and recruit staff that has met the qualifications as stipulated by the federal laws and regulations (Graban, 2016). Additionally, various labor laws and regulations govern employment in private and public sectors. Essential rules such as minimum wages and working hours should play an important role in making necessary staffing decisions in the organization.

Nevertheless, the organization has the necessary resources that are critical to ensuring a successful plan implementation, especially in the staffing process. The presence of precise staffing analytics would help the organization plan according to their needs. The statistics would allow an organization to plan to staff according to hourly needs, and thus reduce the costs that emanate from redundancy (Dunn, 2009). Integration or data from all areas of scheduling, payroll, patient demand and such, stronger practices and more informed staffing decisions would be made, ensuring better returns for the service outfits. Staff optimization originates from the correct use of data analytics. The human resource department must gather information about the employees and use it to the correct decision making regarding staffing. In the past, data has not been a very important tool in decision making regarding staffing. However, this has significantly changed, and data incorporation into the process has been yielding spectacular results (Bowblis, 2011). An optimal staff is integral in helping the organization achieve optimal financial performance. At the end of it, the organization seeks to reduce the costs and see it reflected in the net income margins. Again, the data plays a crucial role, even in bettering the quality of service offered.

References

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Bowblis, J. (2011). Staffing Ratios and Quality: An Analysis of Minimum Direct Care Staffing Requirements for Nursing Homes. Health Services Research, 46(5), 1495-1516. http://dx.doi.org/10.1111/j.1475-6773.2011.01274.x

Codispoti, C. (2015). How to Reduce Hospital Labor Costs by Using an EDW and Analytics. Health Catalyst. Retrieved 7 July 2016, from https://www.healthcatalyst.com/success_stories/texas-childrens-hospital-using-a-healthcare-enterprise-data-warehouse-and-analytics-to-reduce-labor-costs

Cordara, U. (2012). How can we minimize labor cost and maximize profitability without sacrificing service levels? (1st ed.). SAS. Retrieved from https://www.sas.com/content/dam/SAS/en_us/doc/solutionbrief/hospitality-minimize-labor-cost-maximize-profitability-hotels-106124.pdf

Dunn, L. (2009). 10 Best Practices for Increasing Hospital Profitability. Beckershospitalreview.com. Retrieved 7 July 2016, from http://www.beckershospitalreview.com/news-analysis/10-best-practices-for-increasing-hospital-profitability.html

Ertl-Rosner, M. (2016). Controlling Premium Labor Costs | Healthcare in the Know Blog.Apihealthcare.com. Retrieved 10 July 2016, from http://www.apihealthcare.com/blog/healthcare-staffing-best-practices/controlling-premium-labor-costs

Graban, M. (2016). Hospitals Need IE Data to Drive Staffing Decisions. Iienet2.org. Retrieved 7 July 2016, from http://www.iienet2.org/SHS/Details.aspx?id=18460

Inman, R., Blumenfeld, D., & Ko, A. (2005). Improved Metrics on Hospital Nurses to Reduce Staffing Costs. Health Care Management Review, 30(2), 116-125. http://dx.doi.org/10.1097/00004010-20504000-00006

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