The high cost of administrator turnover: A snowball effect

While we were planning a column on a different topic, we were touched and saddened to read a recent commentary on the Long-Term Living Web site.

For the past several years our education and research focus has been on leadership development and organizational alignment, in an effort to decrease the negative impact of administrative changes and turnover in long-term care. Research indicates that administrator turnover leads to inferior care, additional staff turnover, and substantial financial losses. We have studied and reported on how this turnover affects the morale, productivity, and turnover of staff, but could only imagine the impact it had on residents and families. Now it is here for all to see.

Kathleen Mears is a resident of a long-term care facility and hosts a regular blog for Long-Term Living. As administrators, we are distressed and troubled to read about how difficult it is for residents like Kathleen when administrators leave or are replaced for any reason. Sadly, too many residents find themselves in the midst of frequent and ongoing administrator turnover. It is clear that a change in administrators—often taken so lightly—affects not only the quality of care, but as Kathleen indicates, takes an emotional toll on the residents as well.

Kathleen shares her experience and feelings about witnessing a new facility administrator every year and offered her thoughts on the awkward but common pattern of the revolving-door administrator. Her insights highlight the need to examine not only administrator turnover and the resulting financial costs, but perhaps the more important costs related to resident and staff care: morale and support.

Research indicates that more than 7,000 administrators will leave their jobs in long-term care each year.¹ Turnover for assisted living is equally as frequent and both are in excess of 40%, and as high as 70% in turnover each year.² Unfortunately, Kathleen’s experience is not unusual as we, too, find in many facilities turnover of administrators at 100%—a new administrator every year!

The negative impact of high administrator turnover has been demonstrated and includes increased deficiencies, citations, occurrences of resident pressure ulcers, and use of urinary catheters, restraints and psychoactive drugs—all of which become targets for surveyors and are highly recognized indicators of overall quality of resident care.³ In turn, this yields higher staff turnover; 2.3 times as much turnover. The cost of this cannot be overlooked. Research indicates that facilities with higher administrator turnover will yield increases in other staff turnover averaging 76% for RNs, 78% for LPNs, and a complete new group of nursing assistants with 107% turnover in a year.²

A review of the cost of turnover in the literature varies, but commonly estimated costs include a rate of 150% of an annual salary for professional/licensed staff, while ancillary staff costs range from $3,000 to $11,000 per employee. What does this, in combination with the turnover data, mean today in dollars and cents? For a facility with accommodations for 200 residents, it could cost in the neighborhood of $807,500 to $2,248,970 per year!

The dilemma is that the turnover numbers do not hit the profit and loss statement in a line item. It hits in costs associated with hiring, advertising, time interviewing, training, etc. This figure does not even take into account the decrease in job satisfaction, productivity, and staff morale; the increase in citations; and the subsequent costs. Nor does this figure take into account the loss of reputation in the community, the loss of potential residents, and hence the decrease in census and financials.

And what about the residents who are left to live in a facility where the staff is overworked, distressed, and discouraged? Do residents worry about who will be the next administrator—will they like them and will they care? What happens to the residents who had a positive relationship with an administrator who is now gone with no notice or goodbye? Have the residents not already had enough losses in their lives?

Please read Kathleen’s blog. It truly is a must read for every administrator, owner, and corporate executive.

Resources

1. Tellis-Nayak V. The Satisfied but Disenchanted Leaders in Long-Term Care: The Paradox of the Nursing Home Administrator. Senior Housing & Care Journal, 2007, Volume 15, No 1; 4-18.

2. Castle NG, Engberg J, Anderson RA. Job Satisfaction of Nursing Home Administrators and Turnover. Medical Care Research and Review, 2007, Volume 64, No 2; 191-211.