Welcome to another insightful episode of Agile&Me, the podcast for leaders in physical therapy. In this episode, we address the critical issue of clinician turnover with expert guests Wayne Shaw, a seasoned practice owner with 30+ years of experience, and Jamie Farkas, a senior HR leader at Alliance Physical Therapy Partners.
Discover the real costs of clinician turnover, including recruitment and training expenses, and the impact on team morale and clinic operations. Wayne and Jamie provide expert insights into the economic impacts and share effective retention strategies to maintain a thriving workplace culture. Their discussion offers valuable advice for practice owners and HR professionals managing workforce challenges in healthcare.
Tune in to learn how proactive strategies and strong organizational culture can tackle turnover challenges, ensuring success and stability for your practice. This episode is essential for anyone interested in healthcare management and leadership.
Richard: Welcome back to Agile&Me, a physical therapy podcast for leaders. Excited to welcome two very knowledgeable guests today to our podcast, and that is Wayne Shaw and Jamie Farkas. The topic today is talking about the cost of clinician turnover. So I'm sure that there's a lot to talk about here. But before we dive in, I'd love perhaps a quick introduction from yourself, Wayne and Jamie, for our audience.
Wayne: Yeah, thanks for having us, Richard. I really appreciate it. And yeah, it's definitely a hot topic right now. And I'm looking forward to digging into this and figuring it out, retention is the biggest asset we have in our control. And so I think this is a hot topic and one that people will hopefully find value in.
Richard: Absolutely Wayne, a little bit about your background. You're a very successful practice owner that probably got as many years in as me, if not, might be a couple more years. So you've got a wealth of experience on, on outpatient therapy.
Wayne: Yes, originally started back in 1989 and work for some hospital corporations and things of that nature and then eventually opened up our own practice in 2000 and we've grown to 17 clinics and we definitely understand the need for license personnel, but we've definitely been blessed with great personnel over the years that have led to our success.
Richard: Absolutely and Jamie is a senior HR leader for Alliance Physical Therapy Partners, but intimate with regards to kind of recruitment, retention, and everything or every topic around that.
Jamie: Yeah, I mean, recruiting and retention are always the two big problems of any business, right? We have to have the people and we have to keep the people. So, I've been in HR for 20 years, and those two things never change. The lens we look through at them changes. from time to time, especially post covid. And the great resignation. And now I think people just feeling a lot more comfortable moving around to different jobs or wanting different types of flexibility and being willing to make a change if that doesn't happen. So it is even in P.T where we see kind of heavy turn as it is with new grads and people coming out of the gate. It's more than normal and people are much more willing to leave a job for something that they're unsure of to try something new than they ever have been. So that retention piece becomes even more important.
Richard: Absolutely. So today, I don't necessarily want to focus on the causes or solutions, perhaps, of the turnover we could probably spend a whole week talking about that. Today, I really want to talk about the cost and there's multiple costs involved and I think as practice owners Some of those costs are somewhat hidden and I really want to kind of get to the bottom of really what is the cost. But I was doing a little bit digging with some statistics and came up with some really quite frightening figures. One of them is obviously staffing tops the list of health care industry challenges. One figure I found was hospital staff turnover rates climbed to as high as 26 percent in 21 and really operating businesses with such high turnover is truly challenging and also the associated cost. And then for outpatient therapy. The number that I hear banded around is a kind of an average of 20 percent turnover. So again, it blows me away that every five years, theoretically, you've turned your entire staff. And the actual cost, when I When I use Microsoft Copilot, the old AI nowadays, the calculations I see is the, the result of turnover is approximately 120 percent of a PT's annual salary. So if it costs 80,000 for a PT's annual salary, you're looking at well over 100, 000, the business and then predictive health estimated approximately 65, 000 as the cost true cost of a turn. So I was really surprised by those numbers. Wayne, did those numbers shock you or were you really thinking, well, that might actually be conservative?
Wayne: I think before covid, I would have definitely been shocked. But a lot of things have changed since 2020 and those numbers kind of living in this arena. Now, we just, those are probably pretty accurate. And I think sometimes they're in some markets, probably even higher than that. And in some markets, they're probably a little lower, but that's probably a very good average. And I would say, yeah, that’s probably about right
Richard: Now as we dive into the kind of the actual costs, I'd kind of divide into two buckets, direct costs and indirect costs. And with regards to the direct costs, obviously Jamie, from an HR perspective, there are actually direct costs associated with somebody that leaves the organization and also with the recruitment of somebody else. But what are the actual costs associated with somebody leaving the separation costs?
Jamie: So there's several components in this, no matter what there's going to be separation pay. Some instances, that might be something like a separation or severance agreement that we're paying out. But even in cases where somebody is just resigning, there's. PTO earned PTO or sick time to be paid out. The laws in that are different by state. Some states require it. Some states don't. We have policies that kind of cover every possibility there. That's always going to happen. If there's going to be unemployment claims made and if the unemployment claim is accepted, it gets, charged back to the employer, not dollar for dollar, but it results in an increase to our overall rate for the next year.
And even if the claim is not accepted right away, there's associated costs with fighting the claim. We're trying to recover the funds that the employer is is at the mercy of paying. We have moving employees off of systems. Everybody who has to do something associated with that person who's leaving. So H.R / I.T Credentialing other systems people. They're all taking different amounts of time and effort to move people away from that. There's ongoing costs for medical coverage and other insurance coverages to cancel them out or to keep them going. There's admin costs that add up for everything and those they seem small. They are small, maybe one by one. But when you add them together, you start to see where that 65,000 adds up real quick. We start totalling that before honestly, they even leave the building the first time.
Richard: The you bring up health care, which is really interesting one, because we are legally obliged to continue coverage with Cobra. Correct? Yes, as an employer. And I remember one instance, not too long ago where somebody had left the organization. But within that period of time where we had to provide Cobra, they amassed it. I think it was literally hundreds of thousands of dollars in healthcare costs. Now that's the extreme, but as a self insured entity, that was a massive cost to the organization.
Jamie: Yep. And people think about, oh, but once they're not your employee anymore, they're paying their COBRA costs. They're paying their premium, but anything that happens under the coverage of that premium is still our responsibility. So those are unforeseen and unplanned costs, but they still add up. And when you have those big claims that are hitting, even if they're small, if It's still something that we're no longer getting the benefit of their employment, their expertise, driving visits, driving revenue, but we're still paying out for it.
Richard: Absolutely. So when I leave the organization in years to come, when I have six months traveling, I'll maintain Cobra and I've got good coverage.
Jamie: At least I have a warning so we can carve out some things in our plan before then.
Richard: Changing tact a little bit. What I've noticed, Wayne over the years is the notice period has substantially changed. When I first qualified, a similar time to yourself, as a professional, it was all, and certainly in, in England, it was common to have at least one month's notice.
In fact, as professionals, sometimes the expectation was up to three months. Nowadays, it seems we're lucky if we get two weeks sometimes. So there's obviously practical challenges just with the clinic and the patients, yes?
Wayne: Oh, definitely and very true. And we always try to tell our employees, it's as a professional, at least 30 days should be sufficient. And because, we would ask the same thing. If somebody was coming to us, we would say, make sure you give 30 days. Never want to burn bridges as you're leaving, you never know if you're going to come back around that to that bridge. But yeah, the cost and then the stress because you have these patients who have been scheduled for their plan of care most of the time and somebody leaving in the middle of their plan of care. Now, it's going to put the strain on the rest of the staff. So, you may not be able to deliver. The amount and time of treatment the quality should be the same. We just may not be able to give, for instance, an hour treatment, maybe 45 because we're having to see more patients with a licensed personnel than we're normally used to seeing. And so that just puts a strain on on the clinic itself and could could lead to. Others becoming frustrated and annoyed and burned out. So it's keeping that balance of knowing that, what we can work a plan. We're going to have to divide this out, but in the short term we have to get through their caseload of patients and get them discharged when appropriate to get back to normal operating levels.
Richard: It's interesting as there's there's laws in fact that basically say we cannot abandon patients as if you are a provider We are not allowed to abandon patients. I always find it strange when clinicians are providing notice of a period where essentially in my mind perhaps I'm being melodramatic is they are essentially abandoning their patients.Whilst not perhaps to the letter of the law, but certainly from my perspective, like you say, that they're really not taking care of their patients that I would say. No, you're a hundred percent right. I'm glad you said it instead of me, but we, we all think along those same lines.
Wayne: And we always tell our staff, we understand life changes and things are going to events are going to happen and people are going to come and go. And if you could give us as much notice as possible, we're not going to tell you don't ever come in or whatever, because now we can have a plan set forth and say, okay, We have 30 days. So, this is your patient. We're not going to give them any more new patients to put on their schedule and things like that and slowly work them off. So that's the ideal situation. But unfortunately, there's a lot of pressure from other employers that we need you now, and we're offering big bonuses or, whatever a bonus is. It could be a much larger salary or a management position or something, and they want them now. And so they, say, well, two weeks is enough. That's all I have to give. And those are the ones that really are difficult to deal with. And you have to really be fluid and adapt during that situation.
Jamie: Thats something we do well in recruiting side. There's so many people we need those same people too. We want them really fast. Right. But I think what I've seen in our group in the last few years is that we are more understanding when someone says, I can't come to you for a month because I need to give my patients a month in my current role. I've seen us be very flexible in that and not push them, even though we're desperate, right? We have the spot that we need. We are very cognizant still of the patient care, which to me, that human part's very important being, H.R. But that we're thinking of that too, is their people are coming on board with us.
Wayne: Yeah, we tell them the exact same thing, go ahead and give your 30 days once they commit to us and we tell them for some reason if they say we don't need you anymore or you can leave today, then we'll go ahead and take them on. But we always want them to give 30 days. I think it's the professional thing to do. And we're all in this together even our competition and things and it's the right thing to do for both the employer. their employer and especially the patients. So 100 percent agree with that.
Richard: I'm getting a little granular, Jamie. Recruiting costs a lot of money, doesn't it? Tell me a little bit more about those, those direct costs because they mount up, don't they?
Jamie: They do. I mean, there's the cost of the talent acquisition staff and the hiring managers and their hours that they're putting into this. But we pay for recruiting systems, applicant tracking systems. We pay for sourcing. We pay for access to be able to go out and look for employees. We pay to post on job boards. So when I look at our current recruiting team, they have professional subscriptions. At the highest level on LinkedIn and Indeed, which costs money every year, tens of thousands of dollars per seat per recruiter. And then we pay for access to post on job boards. It's free for the job searchers. It's never free for the employer. Somebody has to foot that bill. And it's always getting more expensive. And then we have licensing for access to other fees or searching. We want to buy a database because we want to source or put an ad campaign out. Those all cost additional, even if it's on a platform we use a lot, like Indeed. We pay more to have a spotlight post or a premium ad. If we want to send targeted email or text or even mail snail mail campaigns. We pay for access to the list of people and then we pay for the materials we send out and then postage or whatever else is associated with it.Our marketing team creates materials for us. So we're taking a piece of their time. We're working with outside agencies. Sometimes we will buy a list in a certain state of all licensed PTs, PTAs, OTs, whatever it is. And then you pay for access to that list and sometimes they're worth it. Sometimes they're not, but in this process of trying to turn over every stone. So we can say that we've made sure we've contacted people. We have the best pool that possible for our role. There is a big spend associated with that. I would say it's a little things to add up fast, but it is the big things that just keep adding up like boulders instead of pebbles.
Richard: Now, kind of back of the napkin math, I kind of in my mind think that it probably the direct cost, just the talent acquisition component for a large company, It's fair to say it's probably three, 4,000 just of direct costs associated with the talent acquisition piece per employee.
Jamie: Yeah, for their hours spent on the recs, and if they're lucky enough, if we're lucky enough to have a requisition open in an area that it's easy to recruit in great, then it would, I would say that 34, 000, if it's areas where we have to source, and my team is spending right now, 50 to 60 percent of their time in the recs. Digging out candidates. That's a lot harder. It's a lot more work intensive. And then that costs their hours associated with that particular opening. They're trying to fill go up really quickly.
Richard: Now, you have to try and manage this in the short term. Oftentimes organizations will use staffing agency and as an organization, none of us really like using agency staff for multiple reasons but they serve a purpose sometimes and they can certainly fill in the gap. But there are costs associated with that, direct, indirect, direct and indirect costs associated with the agency. Wayne, I know, with your group, thankfully, and your practice, thankfully you haven't had to use much agency because you have a great retention overall, but, but I'm sure in the past you, you've experienced and certainly know of other partners that have used them. Can you perhaps tell me a little bit about those costs and the stresses associated with agent, bringing agency staff in?
Wayne: Sure, I mean, usually you're paying a premium for the therapist itself plus the commission costs for the agency and their percent that they're going to take it as part of that salary. So, in many times, you can get up to almost twice as much, at least on the salary end of what it was cost you and you're usually offering some type of benefits as well on top of that. So those costs are extremely high being in Texas. It’s very difficult for us to use contract labor because the credentialing process is very difficult in Texas and we're very much shy away from actually, having contract labor because they're not credentialed and we don't feel it's right to ask our other therapists to sign their notes. And so we, we want to avoid that kind of gray area, at least in our state. I know other states it's much easier.
And, and I'm not saying it's right or wrong. It's just something that we kind of avoid. So we've really never had to use that. But I know other partner clinics that I've talked to have really said, what? I can't wait. I have 2, or 3 contract labor and I need to find somebody because it just really, 1 is you've spent so much time just to try to get them up to speed on your system, your documentation system how you work, how your clinic operates, what the expectations, and then by the end of it, their contract ends. You've spent also not just the amount of money, but the time and trying to get them up to speed to be able to handle the caseload. You need them to do. So it's it's a very difficult, but in some instances, it's a stop gap. It's something you need to do. So you can keep the rest of your team also employed and provide. The patients with the care that they need. Obviously, if you're short, most other clinics are probably short staffed as well.And so there's a huge need to be able to get these patients in, especially with the baby boomer generation, really aging. There's more and more need for therapists and there's just not enough of them.
Richard: Jamie, you see, you pay the bills. But my impression with agency is really. If a private practice is thinking of using agency to actually still maintain their financial profitability I think that's a no go. I think a very best, a very best an agency employee in outpatient therapy and standalone clinics will and oftentimes I don't think they even do that based off the reasons that Wayne has just mentioned. You see the bills. Is that really how you see the use of agency really primarily focused on, on being able to maintain care for patients rather than any financial benefit for the organization?
Jamie: Yes, because as Wayne mentioned, the premium that we pay for their flexibility and willing to travel for their expertise on a short term basis, it's high. We pay an average between, I would say about 78 to 85 an hour for agency staff, which is eating away any kind of profit we're gonna make. At the best helping us break even. So we keep the doors open and keep patients with treating if there's credentialing barriers, as we mentioned licensing issues. Sometimes the recruiters are doing twice the work because they're finding an agency placement. And we're still continuing to look on the inside. It takes a long time to train them. It takes some time. Patients are feeling finally on a six month assignment that they are with a therapist they like, and then the person's leaving. There's a lot of disruption in it. We spend a lot of time educating agencies. We work with replacements about selling Alliance because we don't get to talk to these people early until after they've already identified somebody for us and they've tried to kind of land them. But we have to spend a Lots of time with them. We have like 20 agencies that we work with right now. We primarily do placements through three. We have more placements right now. We have 14 than we've ever had when I've been here. And we started our own internal travel program to try and combat some of this. So we could at least control where people are going and know a little bit more about them and be able to place them in areas where we need them the most. Instead of relying on an agency, I'm seeing a lot more agencies being willing work with direct placements as well instead of just temp placements Because people want that and everyone's looking for full time. They know that this is a stopgap measure and we're not going to keep recruiting it's not usually covering for a leave like we used to see agency help now. It’s because we are trying to find someone and for whatever reason. So they're being more flexible. Within a certain degree, the pricing is definitely not more flexible. And we find ourselves, negotiating back and forth between, Hey, we just paid for a six month contract. I'm not going to pay you again for a placement fee, trying to keep that balance of relationships built. So we have this resource, but also being fair to our business and theirs about, what are the right associated costs that all of us can bear.
Richard: Now, Wayne, you've alluded to this already, but when somebody leaves, there can be a profound impact on the remaining team for multiple ways, including kind of productivity, morale, even, can't there, of those that leave that remain, and then, Practical operational issues what are some of the practical concerns and difficulties that your team, the remaining team have to deal with when, when one of their clinicians leave?
Wayne: Yeah, a great question. And one of the biggest things is, our team is very much all in and they're willing to step up and do what it takes, but we also have to be very conscious of protecting them from themselves. They're willing to say, okay, yeah, I'm willing to work longer and I'm willing to take on more patients. The problem is in this market. It's hard to let them know when this is going to end because recruiting and the cost of it is expensive. And you just don't know. At what time you'll be able, there's better times during the year than others. And so do be able to say, what, we appreciate that effort, but we're going to have to, cap you at X amount of patients, but both from a compliance standpoint, as well as kind of protecting them from burnout and anxiety and everything else. So that's a huge thing. So you really have to be in tune with your staff and understand each one's personalities and what they can handle and what they can't. And sometimes you need to protect them from themselves because they're willing to step up and do it for you. But they don't realize at the same time. They may be burning themselves out and creating. This, this type of burnout that catches up with them two months later. And the next thing they know they're, they're tired all the time, depressed and, and those type of things. So it's, it's really making sure that you, understand the temperature happening in your clinic and that everyone is, is, doing what they can do without placing the undue stress upon themselves.
Jamie: That's so interesting, Wayne, because we think about it in terms of turn, but also like there's all these reports after COVID and people who left the profession because of burnout and now might never come back because they, they don't want to return to that. They can't handle it. They don't want to think about it. And so it's not just even turnover from, a loss to the organization, but lost to the profession as a whole for you get to that point where you never want to return.
Wayne: Yeah, and the pro one of the big things on that too is that everyone's bringing you their problems. You're a problem solver as a therapist. That's what you do. You solve people's problems. And so it's hard to listen to problems all day long every day. And maybe you have 12 normally, but to listen to 16 because somebody left, that's just. It's a huge increase of problems and you magnify that day over day and sometimes just being able to cope with all that and say, well, I have problems too, it is a profession. It takes special people to be able to handle other people's problems every day in and day in and day out.
Richard: We found a therapist, and they've actually agreed, accepted the position and we've got a start date. But the costs don't stop there, do they? The costs just continue to, to accumulate from the turnover. So there's kind of many costs associated with that new person. So, Jamie, perhaps do you want to start from the costs once they've accepted, and then perhaps Wayne, a clinical perspective, what are some of the direct and indirect costs? And again, we've, we've touched on them, but I'd really like to kind of dive a little bit deeper. Then, once they accept the offer, then what does HR have to do that costs money and kind of the service team have to do?
Jamie: Yeah. So once they've accepted, then they kind of, they're in this no man's land of, you're not a candidate, you're not an employee yet. So it's called onboarding. We get them all set, but there's a lot of HR and talent acquisition presence in the onboarding because there's time spent on the employee side, completing documents, getting things ready. Okay. But that has a counterpart always on the internal side for HR Where we're guiding people through the process, answering questions. There's background checks that have to be done that have a cost. We have nine verifications depending on what they have for licensing in different states. We had to pay for access to. Be able to look up their licensing and we have to credential them. So there's a lot that happens behind the scenes before they ever actually start. And then we're ordering equipment. So it gets involved. We put them through orientation. So at Alliance, we have a two day formal orientation that everybody goes to regardless of your position or where you are. There's a cost to that. They're now working, we're paying them, but. It's not anywhere near productive yet, right? We eat that cost. It's important to their success, but they're not, in any way in any of those roles earning anything yet. And then there's the cost for the people who spend their time as presenters in New Hire Orientation. They're taking their time here. There's costs associated. With that we're putting people onto IT platforms, HR platforms. They all have a per employee per month cost or we're enrolling them in MedBridge. So they have a subscription cost. So all those things start to add up before they even see their first patient or touch their first piece of equipment out in the clinic itself. So that's all front loaded right off the bat for everybody.
Richard: And after all that Wayne, they've still got costs in the clinic?
Wayne: Definitely. Again, it depends on the type of therapist. Are they an experienced therapist? Are they a new grad? Obviously a new grad you usually doing way more mentoring with them. You're bringing them along slower. They're getting to know your systems better. And on both instances, credentialing is a huge part in some states and for Texas, it is so. When we're starting a therapist, really all they can see is workers comp Medicare and one other insurance that doesn't require the credentialing to be completed and we're able to build that retro. So they're very limited and it almost is a natural barrier for us to bring them along slowly, but you've had the cost of a possible sign on bonus or travel moving expenses or something with that employee. Now you're already paying them. And their production level probably isn't even up to where it needs to be for somewhere between three and six months, because it takes about six months just to get them completely credentialed. That PT is able to be able to now start seeing more patients and generating more revenue. Plus, you have the time of the staff, that's mentoring them, spending time with them. They, they can't, in some instances, obviously they may be with patients other times. It may be one on one meetings with them to go over certain skill sets and things like that and teach them things and they can't see patients at that time. But we're also making an investment in that employee and that just gets back to retention, which you've had talks about, but that’s the biggest thing there, but the cost, I don't think anybody really knows the exact cost.I've also read some articles that say it's 1.5 time and employee salary minimum, just when somebody leaves to replace them. So, those are all costs that we really don't see right in front of us, but they're real.
Richard: Yeah, it's crazy, isn't it? I think is the clinicians don't understand this and probably why would they as an organization, the direct costs and the inefficiencies which we that we acknowledge, understand, allow to be able to build them to the point where we would say they are efficient, working efficiently. That amount of time, that lost revenue, that lost profitability. We're investing a huge amount in them. And the crazy thing is I think statistically most new grads leave within two years their first position. So we're investing all this additional resource and money in them. And alot of them are just moving on to the next entity.
Jamie: Schools tell them that. Their schools, we heard this from a couple people that are speaking at colleges, universities that do PT programs, and they're telling the students that you should expect to job hop three times in your first five years. That's a year and a half at each place. That's it you’re barely up and running and then you're out.
Wayne: You'll never recoup those costs in that short of time. We figure it takes about three years to get our investment back from that employee.
Richard: Yeah, that's a really good figure, I think. Yes, I'd love to chat with the schools. I can't even get the local university to actually even respond to my, my email communication. So anyway So we've talked about the kind of some real and tangible costs associated with turnover. There's, as we said, there's a lot of indirect and, and intangible costs. I think morale is is a big factor as well, isn't it? Because I strongly believe, and I know Wayne, that this is your philosophy as well. If you have a strong culture, then you will be successful. And morale can have a profound influence on that, can't it? And this turnover definitely can impact that. So any thoughts on that, perhaps?
Wayne: Richard you're 100 percent right. And, working with HR team and talent acquisition, when we're looking at somebody and we hire them, you have to get it right on both sides. One is they have to fit your culture. I know a lot of times talent, they don't know they're just bringing, PTs that are interested and they're like, well, how come that didn't work out their license PT and we're like, that's it. We don't hire license. We hire people because if they really don't fit into our culture and buy in one, it makes the rest of the team morale go down because they're not fitting in. They're not part of believing how we believe and the second part is they're probably going to leave because they don't. So we spend a lot of time interviewing. Our interviews will last 2 or 3 hours. Sometimes we'll do 2 or 3 with them because. The one the the potential hire has to get it right. They have to make sure they want to fit because we're looking at them for long term. That's always our goal. And two, we have to get it right. Because when we don't get it right, we do put that stress on the rest of the team and their morale goes down. So from a leadership perspective. We need to get it right, and it's not always easy. We all make mistakes, but we're going to be very diligent about it.
And so there's a lot more factors than just the money that comes into it. And we have to see exactly what their goals, ambitions are, and their future plans. And we have to have some really in depth conversations, because if we don't, we'll also put that undue stress on our team. Jamie, any thoughts?
Jamie: I think Wayne it's a great point about the culture, and I think talent acquisition now is becoming more involved in trying to understand that, right? Because I will say, Your group doesn't have the luxury of a huge amount of candidates, right? You're in the same boat as most of our other partners, where you've got a finite amount and we're trying to find the best fit and the differentiator is the time spent with those candidates. On the clinic side to make sure that you have the fit because like you said, we're not just looking, we're not looking for a license. We're looking for the person who's going to be a fit at border and this specific group within border. I think we have to think about that a lot because those negative effects of somebody who comes in, it's not a good fit and then they leave. And what kind of damage happens when you get someone in for a short term? One person who really doesn't, buy into the culture that we're trying to create and maintain or a person who really kind of it throws everything off. That's a ripple felt for the whole team. And then they lose confidence in leadership's ability to find them the right team or to make the decisions, the best decisions on their behalf. They're losing confidence in HR and talent acquisition. And then they're having to deal now twice with having to cover the workload have of a missing partner, right? It has a lot of kind of those domino or trickle down effects where people start to feel good. We've got a new teammate workloads, even, and now something happened. I don't get along with them. And now we're having turnover and maybe it's people who've been there for a long time who ended up leaving and not the new person, but those are all, I think, preventable things that as leaders, we have to look at, we're responsible for, and to identify those things and head them off the best we can and set ourselves and our teams up for the most success. And that it only comes from recruiting and retaining your people with intention all the time.
Wayne: Yeah, and we realize that the hardest thing to do is when you need a therapist or several and you actually walk away from 1 and some of the best business decisions are the ones you walk away from just because that it's going to put undue stress on the rest of the business and so we've done that before and the rest of the team is just like hey we'll we'll do what needs to be done until you find the right person that's the great thing about our team they're very much about us finding the right person because they actually understand what happens when we don't and so like I said I'm interviewing someone again today and it's the fourth interview and We, we're making sure we're going to get it right because it's a very important position and we expect this person if, if it works out to be long term and that's the goal. So sometimes it takes more than one and we just can't look at it as, Hey, they have a license, even though we're so tempted because we need them, but sometimes it can actually hurt our team more than help our team.
Richard: Yeah we talked about the, the costs of, of recruiting somebody in the assumption up to this point, the assumption that we're assuming it's going to be a good hire, but the costs of, of recruiting a bad hire are probably two, three, four times the cost of recruiting a good hire. So yeah, they don't really talk about that in the literature, do they?
Wayne: No, absolutely. You're 100 percent right. And so when you see four dinners for the same person, we're, we're trying to get it right on the credit card for McDonald's But you're right. If we don't pick the right person, not only did it hurt our, our team, but it's going to really have a huge financial impact that we hope we could have avoided.
Richard: So, time's always against us, any perhaps words of wisdom or final thoughts that you may have on this kind of topic, Wayne for our listeners?
Wayne: I think this is a very important topic and I don't think it's discussed enough and I really don't think even the rest of the staff in the clinical side understands how much time and resources and costs are put in on the backside from the clinical side. The administrative team from talent acquisition from HR from those individuals that are spending a lot of time in the cost and those associated with it. I think that all they know is, hey, it's the salary and that's what it costs to hire them. And so understanding the whole complete package can definitely be, I think, easily one and a half to two times, whatever that person's salary is going to be. And so getting it right is the important thing because you don't want to have those costs six months later again. Absolutely.
Richard: And Jamie?
Jamie: I think the biggest thing, we talk about the cost of turnover and the biggest, most impactful thing we can do to mitigate that is stop the turn where we can, right. And by making sure that we're intentional in our management and we're forming relationships with people so that there's feedback loops and we're having stay interviews instead of exit interviews, right. Some of those turns don't hurt so much. Some of them are necessary and some are healthy, but in any way that we can prevent this cost. The stress, all those associated negative effects of the turnover. That's where we really need to put our attention because that's always going to be the best way to mitigate that impact is to avoid it.
Richard: Well, thank you so much for your time today. I really appreciate it. And a lot of valuable thoughts, material, hopefully listeners will find helpful.
Wayne: Yeah. Thanks for having us on.
Podcast Transcript
Richard: Welcome back to Agile&Me, a physical therapy podcast for leaders. Excited to welcome two very knowledgeable guests today to our podcast, and that is Wayne Shaw and Jamie Farkas. The topic today is talking about the cost of clinician turnover. So I'm sure that there's a lot to talk about here. But before we dive in, I'd love perhaps a quick introduction from yourself, Wayne and Jamie, for our audience.
Wayne: Yeah, thanks for having us, Richard. I really appreciate it. And yeah, it's definitely a hot topic right now. And I'm looking forward to digging into this and figuring it out, retention is the biggest asset we have in our control. And so I think this is a hot topic and one that people will hopefully find value in.
Richard: Absolutely Wayne, a little bit about your background. You're a very successful practice owner that probably got as many years in as me, if not, might be a couple more years. So you've got a wealth of experience on, on outpatient therapy.
Wayne: Yes, originally started back in 1989 and work for some hospital corporations and things of that nature and then eventually opened up our own practice in 2000 and we've grown to 17 clinics and we definitely understand the need for license personnel, but we've definitely been blessed with great personnel over the years that have led to our success.
Richard: Absolutely and Jamie is a senior HR leader for Alliance Physical Therapy Partners, but intimate with regards to kind of recruitment, retention, and everything or every topic around that.
Jamie: Yeah, I mean, recruiting and retention are always the two big problems of any business, right? We have to have the people and we have to keep the people. So, I've been in HR for 20 years, and those two things never change. The lens we look through at them changes. from time to time, especially post covid. And the great resignation. And now I think people just feeling a lot more comfortable moving around to different jobs or wanting different types of flexibility and being willing to make a change if that doesn't happen. So it is even in P.T where we see kind of heavy turn as it is with new grads and people coming out of the gate. It's more than normal and people are much more willing to leave a job for something that they're unsure of to try something new than they ever have been. So that retention piece becomes even more important.
Richard: Absolutely. So today, I don't necessarily want to focus on the causes or solutions, perhaps, of the turnover we could probably spend a whole week talking about that. Today, I really want to talk about the cost and there's multiple costs involved and I think as practice owners Some of those costs are somewhat hidden and I really want to kind of get to the bottom of really what is the cost. But I was doing a little bit digging with some statistics and came up with some really quite frightening figures. One of them is obviously staffing tops the list of health care industry challenges. One figure I found was hospital staff turnover rates climbed to as high as 26 percent in 21 and really operating businesses with such high turnover is truly challenging and also the associated cost. And then for outpatient therapy. The number that I hear banded around is a kind of an average of 20 percent turnover. So again, it blows me away that every five years, theoretically, you've turned your entire staff. And the actual cost, when I When I use Microsoft Copilot, the old AI nowadays, the calculations I see is the, the result of turnover is approximately 120 percent of a PT's annual salary. So if it costs 80,000 for a PT's annual salary, you're looking at well over 100, 000, the business and then predictive health estimated approximately 65, 000 as the cost true cost of a turn. So I was really surprised by those numbers. Wayne, did those numbers shock you or were you really thinking, well, that might actually be conservative?
Wayne: I think before covid, I would have definitely been shocked. But a lot of things have changed since 2020 and those numbers kind of living in this arena. Now, we just, those are probably pretty accurate. And I think sometimes they're in some markets, probably even higher than that. And in some markets, they're probably a little lower, but that's probably a very good average. And I would say, yeah, that’s probably about right
Richard: Now as we dive into the kind of the actual costs, I'd kind of divide into two buckets, direct costs and indirect costs. And with regards to the direct costs, obviously Jamie, from an HR perspective, there are actually direct costs associated with somebody that leaves the organization and also with the recruitment of somebody else. But what are the actual costs associated with somebody leaving the separation costs?
Jamie: So there's several components in this, no matter what there's going to be separation pay. Some instances, that might be something like a separation or severance agreement that we're paying out. But even in cases where somebody is just resigning, there's. PTO earned PTO or sick time to be paid out. The laws in that are different by state. Some states require it. Some states don't. We have policies that kind of cover every possibility there. That's always going to happen. If there's going to be unemployment claims made and if the unemployment claim is accepted, it gets, charged back to the employer, not dollar for dollar, but it results in an increase to our overall rate for the next year.
And even if the claim is not accepted right away, there's associated costs with fighting the claim. We're trying to recover the funds that the employer is is at the mercy of paying. We have moving employees off of systems. Everybody who has to do something associated with that person who's leaving. So H.R / I.T Credentialing other systems people. They're all taking different amounts of time and effort to move people away from that. There's ongoing costs for medical coverage and other insurance coverages to cancel them out or to keep them going. There's admin costs that add up for everything and those they seem small. They are small, maybe one by one. But when you add them together, you start to see where that 65,000 adds up real quick. We start totalling that before honestly, they even leave the building the first time.
Richard: The you bring up health care, which is really interesting one, because we are legally obliged to continue coverage with Cobra. Correct? Yes, as an employer. And I remember one instance, not too long ago where somebody had left the organization. But within that period of time where we had to provide Cobra, they amassed it. I think it was literally hundreds of thousands of dollars in healthcare costs. Now that's the extreme, but as a self insured entity, that was a massive cost to the organization.
Jamie: Yep. And people think about, oh, but once they're not your employee anymore, they're paying their COBRA costs. They're paying their premium, but anything that happens under the coverage of that premium is still our responsibility. So those are unforeseen and unplanned costs, but they still add up. And when you have those big claims that are hitting, even if they're small, if It's still something that we're no longer getting the benefit of their employment, their expertise, driving visits, driving revenue, but we're still paying out for it.
Richard: Absolutely. So when I leave the organization in years to come, when I have six months traveling, I'll maintain Cobra and I've got good coverage.
Jamie: At least I have a warning so we can carve out some things in our plan before then.
Richard: Changing tact a little bit. What I've noticed, Wayne over the years is the notice period has substantially changed. When I first qualified, a similar time to yourself, as a professional, it was all, and certainly in, in England, it was common to have at least one month's notice.
In fact, as professionals, sometimes the expectation was up to three months. Nowadays, it seems we're lucky if we get two weeks sometimes. So there's obviously practical challenges just with the clinic and the patients, yes?
Wayne: Oh, definitely and very true. And we always try to tell our employees, it's as a professional, at least 30 days should be sufficient. And because, we would ask the same thing. If somebody was coming to us, we would say, make sure you give 30 days. Never want to burn bridges as you're leaving, you never know if you're going to come back around that to that bridge. But yeah, the cost and then the stress because you have these patients who have been scheduled for their plan of care most of the time and somebody leaving in the middle of their plan of care. Now, it's going to put the strain on the rest of the staff. So, you may not be able to deliver. The amount and time of treatment the quality should be the same. We just may not be able to give, for instance, an hour treatment, maybe 45 because we're having to see more patients with a licensed personnel than we're normally used to seeing. And so that just puts a strain on on the clinic itself and could could lead to. Others becoming frustrated and annoyed and burned out. So it's keeping that balance of knowing that, what we can work a plan. We're going to have to divide this out, but in the short term we have to get through their caseload of patients and get them discharged when appropriate to get back to normal operating levels.
Richard: It's interesting as there's there's laws in fact that basically say we cannot abandon patients as if you are a provider We are not allowed to abandon patients. I always find it strange when clinicians are providing notice of a period where essentially in my mind perhaps I'm being melodramatic is they are essentially abandoning their patients.Whilst not perhaps to the letter of the law, but certainly from my perspective, like you say, that they're really not taking care of their patients that I would say. No, you're a hundred percent right. I'm glad you said it instead of me, but we, we all think along those same lines.
Wayne: And we always tell our staff, we understand life changes and things are going to events are going to happen and people are going to come and go. And if you could give us as much notice as possible, we're not going to tell you don't ever come in or whatever, because now we can have a plan set forth and say, okay, We have 30 days. So, this is your patient. We're not going to give them any more new patients to put on their schedule and things like that and slowly work them off. So that's the ideal situation. But unfortunately, there's a lot of pressure from other employers that we need you now, and we're offering big bonuses or, whatever a bonus is. It could be a much larger salary or a management position or something, and they want them now. And so they, say, well, two weeks is enough. That's all I have to give. And those are the ones that really are difficult to deal with. And you have to really be fluid and adapt during that situation.
Jamie: Thats something we do well in recruiting side. There's so many people we need those same people too. We want them really fast. Right. But I think what I've seen in our group in the last few years is that we are more understanding when someone says, I can't come to you for a month because I need to give my patients a month in my current role. I've seen us be very flexible in that and not push them, even though we're desperate, right? We have the spot that we need. We are very cognizant still of the patient care, which to me, that human part's very important being, H.R. But that we're thinking of that too, is their people are coming on board with us.
Wayne: Yeah, we tell them the exact same thing, go ahead and give your 30 days once they commit to us and we tell them for some reason if they say we don't need you anymore or you can leave today, then we'll go ahead and take them on. But we always want them to give 30 days. I think it's the professional thing to do. And we're all in this together even our competition and things and it's the right thing to do for both the employer. their employer and especially the patients. So 100 percent agree with that.
Richard: I'm getting a little granular, Jamie. Recruiting costs a lot of money, doesn't it? Tell me a little bit more about those, those direct costs because they mount up, don't they?
Jamie: They do. I mean, there's the cost of the talent acquisition staff and the hiring managers and their hours that they're putting into this. But we pay for recruiting systems, applicant tracking systems. We pay for sourcing. We pay for access to be able to go out and look for employees. We pay to post on job boards. So when I look at our current recruiting team, they have professional subscriptions. At the highest level on LinkedIn and Indeed, which costs money every year, tens of thousands of dollars per seat per recruiter. And then we pay for access to post on job boards. It's free for the job searchers. It's never free for the employer. Somebody has to foot that bill. And it's always getting more expensive. And then we have licensing for access to other fees or searching. We want to buy a database because we want to source or put an ad campaign out. Those all cost additional, even if it's on a platform we use a lot, like Indeed. We pay more to have a spotlight post or a premium ad. If we want to send targeted email or text or even mail snail mail campaigns. We pay for access to the list of people and then we pay for the materials we send out and then postage or whatever else is associated with it.Our marketing team creates materials for us. So we're taking a piece of their time. We're working with outside agencies. Sometimes we will buy a list in a certain state of all licensed PTs, PTAs, OTs, whatever it is. And then you pay for access to that list and sometimes they're worth it. Sometimes they're not, but in this process of trying to turn over every stone. So we can say that we've made sure we've contacted people. We have the best pool that possible for our role. There is a big spend associated with that. I would say it's a little things to add up fast, but it is the big things that just keep adding up like boulders instead of pebbles.
Richard: Now, kind of back of the napkin math, I kind of in my mind think that it probably the direct cost, just the talent acquisition component for a large company, It's fair to say it's probably three, 4,000 just of direct costs associated with the talent acquisition piece per employee.
Jamie: Yeah, for their hours spent on the recs, and if they're lucky enough, if we're lucky enough to have a requisition open in an area that it's easy to recruit in great, then it would, I would say that 34, 000, if it's areas where we have to source, and my team is spending right now, 50 to 60 percent of their time in the recs. Digging out candidates. That's a lot harder. It's a lot more work intensive. And then that costs their hours associated with that particular opening. They're trying to fill go up really quickly.
Richard: Now, you have to try and manage this in the short term. Oftentimes organizations will use staffing agency and as an organization, none of us really like using agency staff for multiple reasons but they serve a purpose sometimes and they can certainly fill in the gap. But there are costs associated with that, direct, indirect, direct and indirect costs associated with the agency. Wayne, I know, with your group, thankfully, and your practice, thankfully you haven't had to use much agency because you have a great retention overall, but, but I'm sure in the past you, you've experienced and certainly know of other partners that have used them. Can you perhaps tell me a little bit about those costs and the stresses associated with agent, bringing agency staff in?
Wayne: Sure, I mean, usually you're paying a premium for the therapist itself plus the commission costs for the agency and their percent that they're going to take it as part of that salary. So, in many times, you can get up to almost twice as much, at least on the salary end of what it was cost you and you're usually offering some type of benefits as well on top of that. So those costs are extremely high being in Texas. It’s very difficult for us to use contract labor because the credentialing process is very difficult in Texas and we're very much shy away from actually, having contract labor because they're not credentialed and we don't feel it's right to ask our other therapists to sign their notes. And so we, we want to avoid that kind of gray area, at least in our state. I know other states it's much easier.
And, and I'm not saying it's right or wrong. It's just something that we kind of avoid. So we've really never had to use that. But I know other partner clinics that I've talked to have really said, what? I can't wait. I have 2, or 3 contract labor and I need to find somebody because it just really, 1 is you've spent so much time just to try to get them up to speed on your system, your documentation system how you work, how your clinic operates, what the expectations, and then by the end of it, their contract ends. You've spent also not just the amount of money, but the time and trying to get them up to speed to be able to handle the caseload. You need them to do. So it's it's a very difficult, but in some instances, it's a stop gap. It's something you need to do. So you can keep the rest of your team also employed and provide. The patients with the care that they need. Obviously, if you're short, most other clinics are probably short staffed as well.And so there's a huge need to be able to get these patients in, especially with the baby boomer generation, really aging. There's more and more need for therapists and there's just not enough of them.
Richard: Jamie, you see, you pay the bills. But my impression with agency is really. If a private practice is thinking of using agency to actually still maintain their financial profitability I think that's a no go. I think a very best, a very best an agency employee in outpatient therapy and standalone clinics will and oftentimes I don't think they even do that based off the reasons that Wayne has just mentioned. You see the bills. Is that really how you see the use of agency really primarily focused on, on being able to maintain care for patients rather than any financial benefit for the organization?
Jamie: Yes, because as Wayne mentioned, the premium that we pay for their flexibility and willing to travel for their expertise on a short term basis, it's high. We pay an average between, I would say about 78 to 85 an hour for agency staff, which is eating away any kind of profit we're gonna make. At the best helping us break even. So we keep the doors open and keep patients with treating if there's credentialing barriers, as we mentioned licensing issues. Sometimes the recruiters are doing twice the work because they're finding an agency placement. And we're still continuing to look on the inside. It takes a long time to train them. It takes some time. Patients are feeling finally on a six month assignment that they are with a therapist they like, and then the person's leaving. There's a lot of disruption in it. We spend a lot of time educating agencies. We work with replacements about selling Alliance because we don't get to talk to these people early until after they've already identified somebody for us and they've tried to kind of land them. But we have to spend a Lots of time with them. We have like 20 agencies that we work with right now. We primarily do placements through three. We have more placements right now. We have 14 than we've ever had when I've been here. And we started our own internal travel program to try and combat some of this. So we could at least control where people are going and know a little bit more about them and be able to place them in areas where we need them the most. Instead of relying on an agency, I'm seeing a lot more agencies being willing work with direct placements as well instead of just temp placements Because people want that and everyone's looking for full time. They know that this is a stopgap measure and we're not going to keep recruiting it's not usually covering for a leave like we used to see agency help now. It’s because we are trying to find someone and for whatever reason. So they're being more flexible. Within a certain degree, the pricing is definitely not more flexible. And we find ourselves, negotiating back and forth between, Hey, we just paid for a six month contract. I'm not going to pay you again for a placement fee, trying to keep that balance of relationships built. So we have this resource, but also being fair to our business and theirs about, what are the right associated costs that all of us can bear.
Richard: Now, Wayne, you've alluded to this already, but when somebody leaves, there can be a profound impact on the remaining team for multiple ways, including kind of productivity, morale, even, can't there, of those that leave that remain, and then, Practical operational issues what are some of the practical concerns and difficulties that your team, the remaining team have to deal with when, when one of their clinicians leave?
Wayne: Yeah, a great question. And one of the biggest things is, our team is very much all in and they're willing to step up and do what it takes, but we also have to be very conscious of protecting them from themselves. They're willing to say, okay, yeah, I'm willing to work longer and I'm willing to take on more patients. The problem is in this market. It's hard to let them know when this is going to end because recruiting and the cost of it is expensive. And you just don't know. At what time you'll be able, there's better times during the year than others. And so do be able to say, what, we appreciate that effort, but we're going to have to, cap you at X amount of patients, but both from a compliance standpoint, as well as kind of protecting them from burnout and anxiety and everything else. So that's a huge thing. So you really have to be in tune with your staff and understand each one's personalities and what they can handle and what they can't. And sometimes you need to protect them from themselves because they're willing to step up and do it for you. But they don't realize at the same time. They may be burning themselves out and creating. This, this type of burnout that catches up with them two months later. And the next thing they know they're, they're tired all the time, depressed and, and those type of things. So it's, it's really making sure that you, understand the temperature happening in your clinic and that everyone is, is, doing what they can do without placing the undue stress upon themselves.
Jamie: That's so interesting, Wayne, because we think about it in terms of turn, but also like there's all these reports after COVID and people who left the profession because of burnout and now might never come back because they, they don't want to return to that. They can't handle it. They don't want to think about it. And so it's not just even turnover from, a loss to the organization, but lost to the profession as a whole for you get to that point where you never want to return.
Wayne: Yeah, and the pro one of the big things on that too is that everyone's bringing you their problems. You're a problem solver as a therapist. That's what you do. You solve people's problems. And so it's hard to listen to problems all day long every day. And maybe you have 12 normally, but to listen to 16 because somebody left, that's just. It's a huge increase of problems and you magnify that day over day and sometimes just being able to cope with all that and say, well, I have problems too, it is a profession. It takes special people to be able to handle other people's problems every day in and day in and day out.
Richard: We found a therapist, and they've actually agreed, accepted the position and we've got a start date. But the costs don't stop there, do they? The costs just continue to, to accumulate from the turnover. So there's kind of many costs associated with that new person. So, Jamie, perhaps do you want to start from the costs once they've accepted, and then perhaps Wayne, a clinical perspective, what are some of the direct and indirect costs? And again, we've, we've touched on them, but I'd really like to kind of dive a little bit deeper. Then, once they accept the offer, then what does HR have to do that costs money and kind of the service team have to do?
Jamie: Yeah. So once they've accepted, then they kind of, they're in this no man's land of, you're not a candidate, you're not an employee yet. So it's called onboarding. We get them all set, but there's a lot of HR and talent acquisition presence in the onboarding because there's time spent on the employee side, completing documents, getting things ready. Okay. But that has a counterpart always on the internal side for HR Where we're guiding people through the process, answering questions. There's background checks that have to be done that have a cost. We have nine verifications depending on what they have for licensing in different states. We had to pay for access to. Be able to look up their licensing and we have to credential them. So there's a lot that happens behind the scenes before they ever actually start. And then we're ordering equipment. So it gets involved. We put them through orientation. So at Alliance, we have a two day formal orientation that everybody goes to regardless of your position or where you are. There's a cost to that. They're now working, we're paying them, but. It's not anywhere near productive yet, right? We eat that cost. It's important to their success, but they're not, in any way in any of those roles earning anything yet. And then there's the cost for the people who spend their time as presenters in New Hire Orientation. They're taking their time here. There's costs associated. With that we're putting people onto IT platforms, HR platforms. They all have a per employee per month cost or we're enrolling them in MedBridge. So they have a subscription cost. So all those things start to add up before they even see their first patient or touch their first piece of equipment out in the clinic itself. So that's all front loaded right off the bat for everybody.
Richard: And after all that Wayne, they've still got costs in the clinic?
Wayne: Definitely. Again, it depends on the type of therapist. Are they an experienced therapist? Are they a new grad? Obviously a new grad you usually doing way more mentoring with them. You're bringing them along slower. They're getting to know your systems better. And on both instances, credentialing is a huge part in some states and for Texas, it is so. When we're starting a therapist, really all they can see is workers comp Medicare and one other insurance that doesn't require the credentialing to be completed and we're able to build that retro. So they're very limited and it almost is a natural barrier for us to bring them along slowly, but you've had the cost of a possible sign on bonus or travel moving expenses or something with that employee. Now you're already paying them. And their production level probably isn't even up to where it needs to be for somewhere between three and six months, because it takes about six months just to get them completely credentialed. That PT is able to be able to now start seeing more patients and generating more revenue. Plus, you have the time of the staff, that's mentoring them, spending time with them. They, they can't, in some instances, obviously they may be with patients other times. It may be one on one meetings with them to go over certain skill sets and things like that and teach them things and they can't see patients at that time. But we're also making an investment in that employee and that just gets back to retention, which you've had talks about, but that’s the biggest thing there, but the cost, I don't think anybody really knows the exact cost.I've also read some articles that say it's 1.5 time and employee salary minimum, just when somebody leaves to replace them. So, those are all costs that we really don't see right in front of us, but they're real.
Richard: Yeah, it's crazy, isn't it? I think is the clinicians don't understand this and probably why would they as an organization, the direct costs and the inefficiencies which we that we acknowledge, understand, allow to be able to build them to the point where we would say they are efficient, working efficiently. That amount of time, that lost revenue, that lost profitability. We're investing a huge amount in them. And the crazy thing is I think statistically most new grads leave within two years their first position. So we're investing all this additional resource and money in them. And alot of them are just moving on to the next entity.
Jamie: Schools tell them that. Their schools, we heard this from a couple people that are speaking at colleges, universities that do PT programs, and they're telling the students that you should expect to job hop three times in your first five years. That's a year and a half at each place. That's it you’re barely up and running and then you're out.
Wayne: You'll never recoup those costs in that short of time. We figure it takes about three years to get our investment back from that employee.
Richard: Yeah, that's a really good figure, I think. Yes, I'd love to chat with the schools. I can't even get the local university to actually even respond to my, my email communication. So anyway So we've talked about the kind of some real and tangible costs associated with turnover. There's, as we said, there's a lot of indirect and, and intangible costs. I think morale is is a big factor as well, isn't it? Because I strongly believe, and I know Wayne, that this is your philosophy as well. If you have a strong culture, then you will be successful. And morale can have a profound influence on that, can't it? And this turnover definitely can impact that. So any thoughts on that, perhaps?
Wayne: Richard you're 100 percent right. And, working with HR team and talent acquisition, when we're looking at somebody and we hire them, you have to get it right on both sides. One is they have to fit your culture. I know a lot of times talent, they don't know they're just bringing, PTs that are interested and they're like, well, how come that didn't work out their license PT and we're like, that's it. We don't hire license. We hire people because if they really don't fit into our culture and buy in one, it makes the rest of the team morale go down because they're not fitting in. They're not part of believing how we believe and the second part is they're probably going to leave because they don't. So we spend a lot of time interviewing. Our interviews will last 2 or 3 hours. Sometimes we'll do 2 or 3 with them because. The one the the potential hire has to get it right. They have to make sure they want to fit because we're looking at them for long term. That's always our goal. And two, we have to get it right. Because when we don't get it right, we do put that stress on the rest of the team and their morale goes down. So from a leadership perspective. We need to get it right, and it's not always easy. We all make mistakes, but we're going to be very diligent about it.
And so there's a lot more factors than just the money that comes into it. And we have to see exactly what their goals, ambitions are, and their future plans. And we have to have some really in depth conversations, because if we don't, we'll also put that undue stress on our team. Jamie, any thoughts?
Jamie: I think Wayne it's a great point about the culture, and I think talent acquisition now is becoming more involved in trying to understand that, right? Because I will say, Your group doesn't have the luxury of a huge amount of candidates, right? You're in the same boat as most of our other partners, where you've got a finite amount and we're trying to find the best fit and the differentiator is the time spent with those candidates. On the clinic side to make sure that you have the fit because like you said, we're not just looking, we're not looking for a license. We're looking for the person who's going to be a fit at border and this specific group within border. I think we have to think about that a lot because those negative effects of somebody who comes in, it's not a good fit and then they leave. And what kind of damage happens when you get someone in for a short term? One person who really doesn't, buy into the culture that we're trying to create and maintain or a person who really kind of it throws everything off. That's a ripple felt for the whole team. And then they lose confidence in leadership's ability to find them the right team or to make the decisions, the best decisions on their behalf. They're losing confidence in HR and talent acquisition. And then they're having to deal now twice with having to cover the workload have of a missing partner, right? It has a lot of kind of those domino or trickle down effects where people start to feel good. We've got a new teammate workloads, even, and now something happened. I don't get along with them. And now we're having turnover and maybe it's people who've been there for a long time who ended up leaving and not the new person, but those are all, I think, preventable things that as leaders, we have to look at, we're responsible for, and to identify those things and head them off the best we can and set ourselves and our teams up for the most success. And that it only comes from recruiting and retaining your people with intention all the time.
Wayne: Yeah, and we realize that the hardest thing to do is when you need a therapist or several and you actually walk away from 1 and some of the best business decisions are the ones you walk away from just because that it's going to put undue stress on the rest of the business and so we've done that before and the rest of the team is just like hey we'll we'll do what needs to be done until you find the right person that's the great thing about our team they're very much about us finding the right person because they actually understand what happens when we don't and so like I said I'm interviewing someone again today and it's the fourth interview and We, we're making sure we're going to get it right because it's a very important position and we expect this person if, if it works out to be long term and that's the goal. So sometimes it takes more than one and we just can't look at it as, Hey, they have a license, even though we're so tempted because we need them, but sometimes it can actually hurt our team more than help our team.
Richard: Yeah we talked about the, the costs of, of recruiting somebody in the assumption up to this point, the assumption that we're assuming it's going to be a good hire, but the costs of, of recruiting a bad hire are probably two, three, four times the cost of recruiting a good hire. So yeah, they don't really talk about that in the literature, do they?
Wayne: No, absolutely. You're 100 percent right. And so when you see four dinners for the same person, we're, we're trying to get it right on the credit card for McDonald's But you're right. If we don't pick the right person, not only did it hurt our, our team, but it's going to really have a huge financial impact that we hope we could have avoided.
Richard: So, time's always against us, any perhaps words of wisdom or final thoughts that you may have on this kind of topic, Wayne for our listeners?
Wayne: I think this is a very important topic and I don't think it's discussed enough and I really don't think even the rest of the staff in the clinical side understands how much time and resources and costs are put in on the backside from the clinical side. The administrative team from talent acquisition from HR from those individuals that are spending a lot of time in the cost and those associated with it. I think that all they know is, hey, it's the salary and that's what it costs to hire them. And so understanding the whole complete package can definitely be, I think, easily one and a half to two times, whatever that person's salary is going to be. And so getting it right is the important thing because you don't want to have those costs six months later again. Absolutely.
Richard: And Jamie?
Jamie: I think the biggest thing, we talk about the cost of turnover and the biggest, most impactful thing we can do to mitigate that is stop the turn where we can, right. And by making sure that we're intentional in our management and we're forming relationships with people so that there's feedback loops and we're having stay interviews instead of exit interviews, right. Some of those turns don't hurt so much. Some of them are necessary and some are healthy, but in any way that we can prevent this cost. The stress, all those associated negative effects of the turnover. That's where we really need to put our attention because that's always going to be the best way to mitigate that impact is to avoid it.
Richard: Well, thank you so much for your time today. I really appreciate it. And a lot of valuable thoughts, material, hopefully listeners will find helpful.
Wayne: Yeah. Thanks for having us on.