Orientation for new-hire RNs in hospitals is costly. In an article in the journal of nursing economics, the average (16 weeks) unit-based orientation cost was estimated at $41, 624 – and this was published back in 2007.
Let’s update this a little using more recent salary related costs; according to KPMG’s 2011 U.S. Hospital Nursing Labor Costs Study, the total cost of a full-time RN averages $98,000 per year (or $1885 per week). Thus, the average cost for the preceptee’s time would be a little over $30,000 (16 weeks at $1885 per week). Adding another $30,000 for staffing the vacancy during the orientation the total cost reaches over $60,000. So far, we haven’t included all of the cost factors yet.
Factors impacting the costs include but are not limited to:
- Hospital policy on staffing the preceptor/preceptee patient load
- Length and design of the classroom and unit-based orientation
- Salary for those involved in nursing orientation including the preceptor(s), preceptee, unit educator, orientation classroom trainer, orientation program manager, etc.
- Salary for those brought in to cover the patient load for the vacant position while the orientation is underway
- Payroll related costs such as social security and 401K contributions, unemployment and workers compensation insurance, health care and other benefits
- Orientation program support costs such as materials, maintaining the program due to equipment upgrades, regulatory or accreditation changes, and other changes in hospital policies and systems.
- The way the hospital allocates other general hospital overhead costs to the program.
Can this cost be managed?
Some of these costs could be managed by nursing management. For example, the policy on staffing load assigned to the preceptor(s) and preceptee determines a significant part of the salary costs. The length and design of both the classroom and unit-based orientation components is also largely under the control of the nursing organization. Other cost factors cannot be managed directly such as the hospital benefits program.
How can cost be managed?
A classic process management approach would be to measure and take actions to improve:
- Cycle time (length of the preceptorship),
- Efficiency (cost of the resources used per preceptorship),
- Effectiveness (outcome of the preceptorship); and some would add
- Adaptability (variability of the other measures under different loads such having one new hire in orientation on a unit verses having three new hires in orientation).
Can the high cost of nursing orientation be managed? Yes. Should it be done? Yes; but only if you are able to lower costs while maintaining or improving effectiveness at the same time. It can and has been accomplished for many other processes in a wide variety of organizations.
2 thoughts on “Can nursing orientation costs be managed? Should they be?”
it can be managed by treating nurses well, so they don’t leave
You are correct Audrey, workplace environment generally is at or near the top of most studies of first year turnover of new graduate RNs. Thanks for the comment.