CEO’s Letter: What Can Corporate HR Learn from Healthcare HR?

HR departments all face challenges. Availability of talent, the retention of employees, managing culture, diversity, and offering an authentic brand are universal issues that HR leaders deal with. But healthcare has some unique challenges, which I will get into below, and the purpose of this column is to suggest that corporate HR—with its better tools, technology and financial support—can gain a lot from studying healthcare HR where CHROs have learned to do a lot with a little. And as we will cover at our People In Healthcare conference in Houston this year, they do it well.

Let’s review the harsh realities of the healthcare space. First, there is an aging demographic in the U.S. that is causing rising demand for healthcare services.  However, due to burnout both during and since the pandemic, healthcare workers are leaving the workforce at a much higher rate than they can be replaced. This impacts all categories of doctors, nurses, and other allied health professionals. We are not creating stem and healthcare graduates, and in spite of the demand, some data shows the numbers of college students pursuing STEM majors is declining. What follows a labor shortage? Well, gray hair for HR leaders—and of course, wage inflation.

Most of the world of HR is experiencing similar challenges but two things distinguish the healthcare space. The first issue is that most healthcare service providers cannot control their pricing and revenue models. Government agencies and some insurance providers are putting downward pressure on medical reimbursements. This is postured as good for the patient population, but when your local hospital goes bankrupt, your employees may not agree. The second difference is the obvious: when quality of service declines in healthcare, people die. That is the blunt reality of using insufficient or improperly trained human resources. For healthcare CHROs, this is the grim reality in which they live, but we still have cause for optimism. CHROs and HR leaders in healthcare are showing great innovation, improvisation at times, and creativity in addressing these problems. They are also attacking the problems with far fewer resources and a far smaller budget than their Fortune 500 colleagues.

How do they do it? With human outreach, reinforcing the importance of their mission which is about human health and well-being, but they also connect that concept of well-being to their own workforce. CHROs and other HR leaders in healthcare have that mission aspect as a clear advantage, and it sustains their workforces that elected that kind of a career, but only to a point. Beyond that good communication, management of culture, leadership transparency, and visibility are all tools in the arsenal of healthcare HR that are being well deployed and well utilized. Lacking the sophisticated AI tools and some of the software platforms other organizations have invested in, healthcare will focus on rewards and recognition as a core motivator and curator of culture.

Post pandemic large systems are also rethinking their relationship with transient workforces and building internal infrastructure to manage those talent pools. This is saving them considerable funds on wage markup and also forcing workforce service providers to rethink their value proposition to healthcare providers. This may cause some short-term pain in both the practitioner and provider community, but it is long-term good for the marketplace to have these periodic reckonings.

If you are not attending HRO Today’s People in Healthcare Conference, you should at least go to the website and look at some of the recorded content or read the features available in HRO Today following the event. You may get some inspiring ideas on how to accomplish great things using the limited resources that most HR departments have at their disposal. There is a lot HR leaders can learn from cross-industry idea sharing and we hope you will avail yourself of those opportunities in the future.

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