Authored by: JoAnn Lazarus, MSN, RN, CEN, FAEN, Managing Partner, Emergency Department Services
Advantages of interim leadership
Hospital finances and escalating costs of staffing are at the forefront for most hospital senior leaders. The aftermath of the pandemic recovery, coupled with the challenges of staffing, led to a surge in the use of agency personnel and temporary staff to ensure adequate nursing and hospital department support. As hospital margins now teeter on the brink of negativity, senior leaders find themselves in the unenviable position of having to eliminate consultants and agency staff. However, there is a question worth pondering: Have we perhaps swung too far in our zeal to eradicate all forms of temporary staffing, and could this unintentionally result in greater financial strain on the organization?
The Future of Nursing report by the Institute of Medicine (IOM) underlines the pivotal role of nursing leaders in driving healthcare transformation and vision.1 Specifically, front-line leaders, directors, and managers play a critical part in the success of unit-based initiatives, patient safety, and quality standards, as well as staff engagement and satisfaction. The preservation of advancements in departmental metrics is paramount, and even minor missteps can jeopardize hard-earned progress. Despite recognizing the advantages and cost-effectiveness of nurse manager succession planning, numerous organizations lack the necessary replacements for all leadership positions.2 Furthermore, only a minority have established coaching and mentoring programs to aid the development of novice nurse leaders.
Snavely3 discusses the worsening shortage of nurses and the resultant financial repercussions on healthcare institutions. While utilizing agency personnel and travelers can compromise unit quality metrics, working with inadequate staffing levels is equally unsustainable. Alongside the nursing shortage looms a scarcity of nursing leaders, particularly at the manager and director levels. These middle management roles are among the most challenging within healthcare organizations and, consequently, are often difficult to fill. Leadership positions frequently remain vacant for extended periods, creating gaps that are arduous to cover and recover from once eventually filled.
“Have we perhaps swung too far in our zeal to eradicate all forms of temporary staffing, and could this unintentionally result in greater financial strain on the organization?”
Benefits of interim leadership
Interim leaders are tasked with achieving stability while moving the department forward. Their mandate includes stabilizing the work environment, engaging staff, ensuring unit safety, and optimizing operational efficiency. Interim leaders also offer a fresh perspective on the department. When the interim leader possesses specialized expertise, they often identify opportunities for enhancement and possess the capability to address any outstanding matters before a permanent leader assumes the role. This becomes even more crucial if the former leader was not a high achiever. In such instances, numerous tasks may be incomplete (e.g., pending performance appraisals, vacant positions, unfinished action plans) along with other essential safety and quality initiatives. Additionally, the interim leader benefits from the capacity to institute long-sought changes within the unit, thereby setting the stage for the incoming leader’s success.
Engaging an interim leader grants the necessary time to select the most suitable leader for the unit, rather than hastily appointing one out of sheer urgency. Making an incorrect choice for a permanent leader can have enduring repercussions for the hospital, staff, and patients, underscoring the critical importance of getting the selection right. Employing an interim solution enables the organization to thoroughly evaluate and choose the ideal candidate. Once this candidate is identified and brought on board, a transitional period becomes crucial to smoothly shift the now well-functioning department under the purview of the new director. This transition period facilitates proper onboarding, orientation attendance, and gradual assumption of responsibilities, ensuring the new leader’s success and mitigating the challenges of the transition.
Recruiting experienced and qualified nurse leaders, particularly in certain geographical regions, poses a significant challenge. While considering a novice leader might be an option for some organizations, this decision comes with its own set of challenges. These challenges can be both professional and personal. Novice leaders may require strong coaching and mentoring which makes it even more important to turn over a well operating emergency department.
Interim leadership cost considerations
The costs associated with employing an interim leader, although higher than the permanent leader’s salary, can yield various organizational benefits. Neglected oversight of key performance indicators (e.g., patients leaving without being seen) and escalating unit costs (such as overtime utilization and unmet productivity targets) can lead to lost revenue opportunities and financial strain. Conservative estimates reveal that replacing staff nurses incurs costs ranging from $92,000 for medical-surgical nurses to $145,000 for specialized nurses (ICU, ED).4 The expense of replacing a nurse manager is reported to be between 75% and 125% of their annual salary, and quantifying the costs of retaining an unsuitable manager is even more complex. Although the investment in hiring the right candidate is substantial, the costs of selecting the wrong individual can have significant and lasting effects on the organization. Ensuring the recruitment of the best-suited candidate is imperative for the long- term success of the unit and the delivery of optimal patient care.
Numerous experts have advocated for comprehensive succession planning, which often stands as the most effective means of addressing leadership vacancies. Fewer than 7% of healthcare organizations have a formal nurse manager succession plan in place for nurse manager positions.5 However, when a clear succession plan is absent, interim leadership emerges as a viable and overall cost-effective solution to sustaining and enhancing nursing units. It provides a quantifiable return on investment while affording the organization the time required to locate and transition a permanent leader seamlessly into their role.
References
1Robert Wood Johnston Foundation. (2011). The Future of Nursing: Leading Change, Advancing Health. Retrieved from NCBI: https://www.ncbi.nlm.nih.gov/books/NBK209867/
2Titzer, J., Phillips, T., Tooley, S., Hall, N., & Sirey, M. (2013). Nurse Manager Succession Planning: Synthesis of the evidence. Journal of Nursing Manger, 971-979.
3Snavely, T. (2016). A brief economic analysis of the looming nursing shortage in the United States. Nursing Economics, 98-100.
4Philips, T., Evans, J., Tooley, S., & Shirey, M. (2018). Nurse manager succession planing: A cost-benefit analysis. Journal of Nursing Management, 238-243.
5Kerfoot, K. (2022). The importance of Nurse Manager Succession Planning. Managed Healthcare Executive, August 26, 2022 / https://www.managedhealthcareexecutive.com