What Recruiters Should Know About the Real Cost of Physician Vacancies

Posted by Doximity TF Team

What Recruiters Should Know about the Real Cost of Physician Vacancies-1When an organization faces a physician vacancy, recruiters may feel pressured to speed up the recruitment process. Despite the pressure to maintain continuity of care by hiring a physician as quickly as possible, that pressure can drive organizations to throw money at a problem without considering the underlying costs of inefficient recruitment processes. It can also drive recruiters to make less informed hiring decisions. 

According to Tony Stajduhar, president of Jackson Physicians, the cost of hiring a physician – one who leaves your role – can exceed $1 million if you consider the cost of recruiting, onboarding, then another vacancy and hiring situation. That’s challenging when maintaining consistent patient care, managing costs, boosting medical staff morale, and ensuring productivity are an organization's priorities.

What do recruiters need to know about recruiting to fill physician vacancies? Here are three tips. 

#1.  Understand the cost of your recruitment marketing and your return on investment (ROI). There's a saying: "What gets measured gets managed," and the same holds true for recruiting. To allocate your recruitment resources appropriately in this evolving health care climate, recruiters should measure what you (and your team) are doing. It’s the only way to make sense of your hires and recruiting efforts in terms of dollars and cents. What’s the return on investment or the ROI of your recruiter's efforts? Let’s start with two metrics: time to hire and cost per hire. 

Time to hire is the time it takes to bring a new hire on board from the moment you publicize an open opportunity to the time they sign on.  It is a crucial recruiting metric because it focuses on the efficiency of recruitment and the sourcing channels used. To improve the time-to-hire metric, you can break it down into intervals between the day you post a job and the hire’s first day on the job. This includes when a candidate was sourced, when they were interviewed, etc. The ultimate goal is to optimize the time to hire.

Cost per hire is one of the most important metrics to track. It shows how much it costs to hire for each position and where you might be losing money. Cost per hire considers a few other metrics, which vary based on the position you’re hiring for. Some common metrics include job boards or email list subscription costs, referral bonuses, advertising costs, and relocation costs. Measuring cost per hire can be done by looking at your external and internal expenses and dividing that number by the total number of hires. 

If measuring ROI seems daunting, think about it this way: you’re simply turning data into information and information into insight. 

When you measure data, you can communicate the importance of your time and investments to your team. In turn, you’ll ensure you’re investing your time and money in the most fruitful methods for your organization. You can learn more details about calculating ROI in a previously published article

#2: Know the costs of physician vacancies. Effective recruitment is crucial for healthcare institutions, but having tangible data to substantiate the expenses of filling vacancies is challenging if you don’t have tangible numbers. According to Jackson Physician Search, each physician vacancy generates $130,000 to $150,000 in monthly lost revenue, more in certain specialties. Moreover, depending on the specialty, physician searches require 5 to 12 months, plus time for relocation, which means the internal cost of a physician vacancy can skyrocket.

Can your organization afford the cost of a physician vacancy? The Missing Physician is a tool to help you calculate it. Simply input your own recruitment data and the calculations will show cost by days to fill, by the number of searches conducted and by annual revenue lost. Tools like this can be helpful in garnering additional recruitment support.

According to Scott Becker and Molly Gamble in an article for Becker’s Hospital Review, the estimated 30,000 physicians who join the U.S. workforce will not be enough to meet the growing demand for care and the number of doctors retiring, reducing clinical hours, or planning to exit the field each year. That’s why measuring ROI and showing numbers that support your recruitment needs will help you maximize your recruiting efforts.

Are you ready to calculate your recruitment ROI? Download 11 terms to remember when calculating your ROI

Terms for Calculating ROI

Topics: tips for physician recruitment, physician vacancies costs

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