December 15, 2020

Should I Hire an Employee or a Per Diem Nurse?

Many healthcare organizations have dozens of unfilled nursing positions. In a staffing crisis during a pandemic, should you seek out full-time employees? These 5 factors will help you decide.

By Heather Johnson

Even under normal circumstances, healthcare staffing managers face a delicate balancing act when deciding whether to hire employees or rely on travel and per diem healthcare professionals. At a time when nearly every state in the nation is facing a surge in COVID-19 infections, the decision becomes even more challenging.

While travel and per diem nurses help solve short-term needs, hospitals and ambulatory surgery centers still need permanent healthcare professionals. As an example, Ascension, a nonprofit healthcare system, has 170 nurse openings for its southeast Michigan facilities. Some of these jobs have been open since March. 

While the need is real, so are budgetary constraints. Hospital margins and volumes continue to fall while expenses - labor chiefly among them - continue to rise. The total expense per adjusted discharge rose 13.5% year-to-date compared to 2019, while gross operating revenue fell 4.8%.

So what’s the best choice? Employee or per diem?

Evaluating these 5 key considerations:

#1: Does your facility have an ongoing need?

nursing staff shortage

Typically, healthcare organizations hire permanent employees when they expect business to hold steady. Predicting future demand has always been difficult. In the pandemic, it  has become nothing less than a Herculean task.

In uncertain times, it is far better to improve flexibility, and to fulfill a larger share of your staffing needs with per diem professionals than with fixed-cost employees.

#2: How tight is your staffing budget?

As healthcare organizations shift to value-based care, they have to continually control costs while maintaining or improving quality. Labor can only get trimmed so much before patient care suffers. 

healthcare staffing budget

Do you have room within your fixed costs to bring in one, three, or ten more salaried healthcare professionals?

When trying to answer this question, factor in the “perks” you’ll need to attract top talent, such as: an attractive salary, expanded benefits, sign-on bonuses, and professional development and training.

If budgetary constraints are tight, allocate funds for more per diem healthcare professionals. You can rely on them as your needs rise and fall, whether it’s for one day or one month.

#3: How big is your per diem pool?

Many healthcare organizations have permanent employees as well as an internal pool of part-time, full-time, and per diem professionals. Is your internal resource pool robust enough to support your supplemental staffing needs? If not, look for ways to optimize and expand your internal float pool. Studies show hospitals using float pools save between 2% and 5% of total nursing labor costs.

healthcare per diem pool

To optimize the use of your internal float pool, consider the use of technology solutions. CareRev is one solution that can help you make the most of your internal float pool and pick up the slack. And, when you still have needs that are not filled by your internal pool, you can tap into CareRev’s network of local, fully vetted per diem healthcare professionals to fill in the gaps.

#4: How soon does your facility need support?

If you’re like most healthcare organizations, you need support now. Finding, onboarding, and training a permanent employee takes time—time you don’t have during an immediate crisis.

timing of healthcare staffing support

If you know you’ll need long-term support, publish the job opportunity through all your available channels like you normally would. But if you have immediate needs or recognize that your staffing demands frequently fluctuate, lean on your internal resource pool as well as external resources to bring in experienced professionals immediately.

#5: How’s your labor market?

Many parts of the country are experiencing a nursing brain drain. The pandemic is accelerating a trend that started earlier: nursing professionals are retiring earlier, they are increasingly eschewing acute care facilities and moving to ‘safer’ environments such as home healthcare or ASCs, and they are increasingly looking for more lucrative travel or per diem opportunities. It is getting harder and harder to recruit and retain qualified nurses.

Rural areas are facing an especially tough time as nurses leave town for higher-paying jobs in affluent neighborhoods. Urban public hospitals also feel the pinch as they deal with higher numbers of COVID-19 patients and shoestring budgets. 

CareRev nursing labor market

If you’re struggling to find full-time employees, consider bringing in per diem professionals using a technology-based staffing solution. You can easily deploy local, highly qualified healthcare professionals to fill short-term needs and, by choosing per diem, you’re not locked into a 13-week contract as with travel nurses. 

When the pandemic eases and healthcare organizations start seeing more sustainable, stable patient volumes, you may have the budget to bring in full-time employees. In the meantime, take advantage of both your reliable internal resource pool and local healthcare professionals to find skilled RNs, CNAs, and technicians.

Do you have an ongoing need for per diem talent?

Talk to CareRev today