Putting an exact figure on the cost of staff turnover is difficult.
The NHS put the turnover rate of Nurses at a typical Trust at 12%.
(And the numbers can't be put down to the pandemic. A Nuffield Trust report explained its figures were roughly the same as pre-pandemic levels, and that Covid only accounts for 14% the Nurses who left the profession.)
But, what is the cost?
Estimating the total financial cost is very challenging.
That’s primarily because an employee’s value is complex – as is the cost of replacing them.
But beyond that, there are what could be termed secondary costs.
These could include an initial deficit in terms of productivity while a new person gets accustomed to a new role, or increased absence of colleagues who become overstretched and overworked.
We can consider all of these factors – all of which deserve attention.
But in terms of a broad, overall cost, a report by the Modern Society Initiative and the Healthcare Workers’ Foundation (MSI / HWF) has attempted to find one.
The report suggests that NHS staff retention rates are dropping, and that the cost of not addressing this issue will be £21.7 billion.
This calculation is approximate of course, based on training costs and likely recruitment challenges in the coming years.
But it’s a useful indicator of just how enormous this issue is.
How Much Does It Cost To Train And Recruit NHS Nurses?
To break this issue down, it’s useful to analyse some of the specific costs related to the retention challenge.
A report published in NHS SBS puts the cost of replacing a fully-trained nurse at £12,000.
And, as it points out, with nursing turnover of up to 12%, the costs soon rack up:
“A large acute NHS trust with over 3,000 nurses, for example, will typically have a turnover rate of between 10-12%. This means needing to recruit more than 300 new nurses on an annual basis. With the total financial impact of replacing a fully-trained nurse estimated to be anything up to £12k, this equates to a minimum spend of £3.6m every year.”
That doesn’t include the initial recruitment costs – the price of actually finding and attracting prospective nursing staff to train in the first place.
A case study for Hillingdon Hospitals’ NHS Foundation Trust found that it cost £8,477.80 to recruit a UK Nurse, and £6,371.41 to hire a Nurse from overseas.
Again, multiply this figure by thousands, and you get a realistic sense of the scale of the cost of recruiting to replace leavers.
Especially when you consider that almost half of the new Nurses on the NMC register have joined from overseas (in the report above, the cost can exceed 10 times that of recruiting a UK Nurse).
How Much Does Absence Cost The NHS?
The link between staff retention and staff absence has been made very clear in recent years within the NHS.
Staff absence is often a very clear indicator of someone who may leave their role (increased risk of leaving the NHS).
And especially during the pandemic, the impact of under-staffing on absence has been undeniable.
But even prior to Covid 19, staff absence in the NHS was high: "Sickness absence rates in the NHS are higher than in the rest of the economy.
NHS staff sickness rates rose from 3.8 per cent in April 2018 to 4.1 per cent in April 2019.
This is the highest level at that time of year in more than a decade, and represents more than 1.4 million full-time equivalent (FTE) days lost in that month alone." (Kingsfund.org, 2019)
“The NHS lost more than 1.4 million full-time equivalent (FTE) days in April 2019 due to sickness absence”
And in August 2021, Nursing Times discovered that there had been a 37% increase in mental health related absences.
And the Government is taking the issue so seriously that the House of Commons Health and Social Care Committee has held reviews into the impact of burnout and resilience in the NHS.
But what does the absence of an NHS worker actually cost the NHS?
Well, we can refer to the interim costs mentioned above.
Needless to say, an interim worker costs far more than a full-time employee across an entire year.
But more broadly, the NHS itself has released data that suggests the cost of staff absence to the NHS is around £2.4 billion a year, with a cost of £1.7m due to sickness absence for an average Trust.
Once more, this aspect of the retention challenge represents a significant cost to the NHS.
The Costs That Can’t Be Easily Quantified
The costs outlined above should be enough to convince anyone that retaining staff is of paramount importance.
But there are deeper and more complex impacts, too.
Any organisation knows that unhappy staff are a problem.
They can be a de-motivating force, damaging multi-disciplinary teams that are so vital to providing quality care.
And then there’s the damage that high turnover does to team and organisational performance.
Any company in any sector knows the inherent value of a team full of experience – teams with staff who know the idiosyncrasies of that place of work inside out.
How do you measure the cost of damaging that?
It’s probably not possible to do so – but that doesn’t mean that the cost isn’t significant.
The Cost Of Poor Retention Rates Can Spiral Quickly
In summary, high staff turnover does untold damage to NHS Trusts – and the subsequent impacts and costs are enormous.
As an industry, we talk frequently about the need to recruit better.
It’s time for Trusts to retain better too.
How Can The NHS Increase Retention?
There isn't one silver bullet to fix retention because the reasons people leave are varied.
Let's end by looking at a Nuffield Trust report from March 2022 that lists the main reasons given by Nurses, Midwives and Nursing Associates for leaving the NHS:
• Work-life balance (quadrupled in last decade)
• Wellbeing (quadrupled in last decade)
• Lack of reward (quadrupled in last decade)
• Unfair treatment (discrimination, bullying, harassment)
• Low levels of staffing
• Pressure and stress
• Covid (14%)
• Undervalued (recognised and valued)
• Unable to provide acceptable level of care