We often hear from HR departments that “we aren’t a revenue generating department, so anything new we want, doesn’t make it past the first round of budget cuts.” Being a department that doesn’t directly impact the bottom line isn’t easy. It most likely means, when it comes time for budget cuts, your items are the first to go. It’s a lot easier to explain that with 200 MRI’s billed, the MRI machine has paid for itself.

This scenario has played out at hospitals across the country: A new MRI machine has been approved in the budget for the following year. A committee is formed that will decide what MRI machine will be selected, hours of time is spent making this very big decision. But, the person hired to run the machine is given maybe 1 hour worth of training. And yet, that person will probably be with your hospital for on average, 10 years. Does that make sense?


HR has hard facts too, like the cost of nursing turnover, physician recruitment costs, daily costs of any position being unfilled, or the fact that employee satisfaction directly affects HCAHPS scores and retention rates.All of these items can directly impact the bottom line, as much as your new MRI machine. For example:

The cost of first-year nursing turnover. On average nursing turnover costs hospitals $29,000 per hire, and yet the average first year turnover rate can be as high as 60%. So, improving new hire retention rates could help add to the bottom line.

Reduce Costs for healthcare HR
Recruiting a new physician costs about $25,000. By building a database of potential physicians or at least not hiring a recruiting firm outside of your existing costs can save you at least ½ of that per hire.

Unfilled positions can cost hospitals as much as $4,000 a day. Filling those positions, say, 11 days faster… that adds back up to $44,000 to the bottom line.

The direct correlation between employee satisfaction and HCAHPS scores is undeniable. And improving employee satisfaction is an HR pillar. While it may be difficult o assign a revenue number to an improved HCAHPS score, you can be assured that aligning HR goals and budget items to solutions that affect employee satisfaction and HCAHPs will certainly keep your line items IN the budget versus being tossed to the side, before say, a new MRI machine.

Don’t underestimate the power of your HR department to affect serious change that will directly impact the bottom line. Use any of the links in the above post to help you justify your investments.

About The Editorial Staff

The Editorial Staff is a team of writers with a passion for helping healthcare organizations manage their biggest and most important investment: their employees.