Cost Of Nurse Turnover

Aspen Pub./JONA

na341206-2

December 2, 2004

4:24

JONA Volume 34, Number 12, pp 562-570 C 2004, Lippincott Williams & Wilkins, Inc. 

The Costs of Nurse Turnover Part 1: An Economic Perspective Cheryl Bland Jones, PhD, RN

Nurse turnover is costly for healthcare organizations. Administrators and nurse executives need a reliable estimate of nurse turnover costs and the origins of those costs if they are to develop effective measures of reducing nurse turnover and its costs. However, determining how to best capture and quantify nurse turnover costs can be challenging. Part 1 of this series conceptualizes nurse turnover via human capital theory and presents an update of a previously developed method for determining the costs of nurse turnover, the Nursing Turnover Cost Calculation Method. Part 2 (January 2005) presents a recent application of the methodology in an acute care hospital. Turnover rates and the more obvious costs of nurse turnover may be tracked in healthcare organizations (HCOs), but rarely are data on the full scope of turnover or its costs available and analyzed. This lack of information makes it difficult for nurse and healthcare executives to fully understand the true consequences of turnover in HCOs, and may complicate efforts to fill nurse vacancies and efficiently allocate organizational resources. Consequently, the identification of adverse organizational effects may be impeded and the financial performance of HCOs may suffer.1,2

Nurse Turnover and its Costs Even under ideal circumstances, HCOs may experience some level of turnover, as nurses leave or Author’s affiliation: Associate Professor and Health Care Systems Coordinator, School of Nursing; Investigator, Southeast Regional Health Workforce Center, Cecil G Sheps Center; The University of North Carolina at Chapel Hill. Correspondence: University of North Carolina at Chapel Hill, CB #7460, Chapel Hill, NC 27599-7460 (cheryl [email protected]).

562

relocate for reasons that may not be responsive to intervention. Under such conditions, nurse and healthcare executives may direct very little attention toward reducing nurse turnover. However, when nurse turnover occurs, there are several potential financial consequences for HCOs. First, there is loss of future returns that would have accrued from past investments in nurses. Second, there are short-term productivity losses and instability in the workforce. Third, there are financial losses incurred above and beyond routine costs when supplemental or temporary registered nurse (RN) staff are employed, beds are closed, patients are deferred, or employed nurses are asked to work overtime to fill vacancies caused by RN turnover. Fourth, investments must be made to orient and train newly hired nurses, and losses are incurred while newly hired RNs become fully productive. Fifth, it may be difficult to acquire sufficient numbers of RNs and patient-nurse ratios may increase such that care delivery becomes unsafe, quality of care suffers, or nurses become overburdened or burned out. In essence, nurse turnover consumes resources that could be directed at core business activities, such as quality improvement programs, and staff development or nurse retention activities. In today’s competitive healthcare environment, administrators must recognize the impact that nurse turnover has on the satisfaction and safety of nurses and other clinicians, the satisfaction and retention of healthcare customers, and customer perceptions of quality of care. A recent survey3 examining employee turnover and customer satisfaction in 6 different industries—banking, computing, retail, telecommunications, investment management, and property and casualty insurance—reported a direct correlation between customers’ perceptions of employee turnover and customer satisfaction, which were, in turn, linked to customer retention or defection.

JONA • Vol. 34, No. 12 • December 2004

Aspen Pub./JONA

na341206-2

December 2, 2004

4:24

Consumers can “vote with their feet,” making the effects of turnover reach well beyond the usual expectations of recruiting and hiring to fill vacancies. This report notes that, “The negative effects of the increase in employee turnover are no longer being felt exclusively by human resource managers . . . It is apparent that consumers are directly impacted by turnover . . . as a result, turnover is now a principal concern of chief executive officers (CEOs) because it directly affects the bottom line.”3 A study by Press Ganey4 recently reported that the nursing shortage affects patient satisfaction, and that nurse-patient ratios and patient satisfaction are positively correlated. Given this relationship, it is reasonable to expect that nurse turnover may adversely affect patient satisfaction. In spite of the reality that healthcare consumer choice is somewhat limited, patients do have some choice in where and how they receive services. If healthcare consumers perceive problems with nurse turnover or quality of care, their perceptions may influence their behaviors. Thus, RN turnover is not simply a human resource issue, but can be costly in terms of dollars—human capital losses, disruptions in the work environment, customer loyalty, and organizational performance. These costs make RN turnover a problem at the very top levels of an HCO5 and affect the bottom line.3 Five previous estimates of turnover costs per RN, presented in Table 1, vary considerably. For example, studies published between 1990 and 2004 reported turnover costs ranging from approximately $10,100 to $64,000.6–10 The most recent estimates of RN turnover costs reported in 2003 and 2004 range from $21,5149 to $31,486,10 while the highest estimate of RN turnover costs, ranging from $42,000 to $64,000, was made in 1999.8 The calculation methods used to estimate turnover costs vary, and some previous estimates are now dated, which makes direct comparisons difficult. Methods used in some of the previous studies captured primarily visible costs, omitted some important but less visible costs of nurse turnover, were local or regional in nature, and did not adequately capture the current costs associated with replacing nurses who leave. Table 1 also expresses per-RN turnover costs as a fraction of RN salary, ranging from 0.3 to 1.6. These results are generally consistent with rules of thumb (turnover costs equal to 0.75 to 2.0 times departing employee salary) noted by others.2,11 However, application of the rules of thumb or use of the ratios in Table 1 at another HCO may be problematic, given the wide range in possible turnover cost estimates when these rates are applied. These ratios may help an HCO to define a range of probable

JONA • Vol. 34, No. 12 • December 2004

turnover costs, but more accurate turnover cost estimates would require detailed study. The lack of detailed nurse turnover data and conflicting cost estimates have left some healthcare administrators and researchers scrambling to quantify RN turnover and its costs. This information would allow chief nurse executives (CNEs) and HCO executives to better allocate resources aimed at RN retention, and to make more informed decisions about resource allocation. Further, knowledge of the costs of turnover enables the CNE and other executives to demonstrate potential organization savings—or costs avoided—if retention investments are made. RN turnover can be conceptualized within the context of the economic theory of human capital.12 Human resource accounting methods,13 derived from human capital theory, provide a way to operationalize human capital theory. These methods recognize and value the contributions of “knowledge-workers”14 within organizations, and view employees as organizational assets that affect organizational productivity and future financial returns.15

Human Capital Theory Economists refer to the knowledge, skills, and abilities possessed by individuals as “human capital.”16 Human capital is acquired by making investments to attain knowledge, skills, and abilities, such as acquiring advanced education or specialized work experience, or changing jobs for a higher-level position. The acquisition of human capital increases individual and organizational productivity and produces returns on investments.16 Human capital theory (HCT) recognizes that individuals and organizations invest in human capital in anticipation of gains in the forms of increased productivity and financial returns. Because the productivity of individuals is difficult to measure and data on investment returns are more readily available, these data are typically used as indicators of productivity. For example, economic studies guided by human capital theory often use employee wages and other financial returns as proxies for productivity. An assumption of HCT is that higher wages and other return measures are indicators of higher productivity and greater human capital investments.16 Human Capital: According to Whom? Human capital can be viewed from 2 perspectives: the individual and the organization. Interestingly, turnover may present individuals (or nurses) and organizations (or healthcare executives) with multiple and often conflicting incentives and consequences.23

563

564 †

Estimated from numbers provided in report. Not available in report.

1 hospital

Waldman et al, 200410

∗

4 units in each of 6 countries

Stone et al, 20039

6 hospitals

1 hospital

Wise, 19907

29

N/A†

N/A†

23

26.8

RN Turnover Rate, %

• • • • •

Selection Hiring Training Termination Reduced productivity

• Direct • Indirect

$23,487–$31,486

$21,514

$42,000–$64,000

$11,740

• Accession costs Visible • Separation • Vacancy • Recruiting • Hiring • Orientation Invisible • Lost productivity • Learning curve

$10,098

$/RN Turnover

Direct • Advertising and recruiting • Unfilled positions • Hiring Indirect • Orientation and training • Decreased productivity • Termination

Cost Categories

N/A† 0.7–1.0

$32,000∗

1.1–1.6

0.31

0.37

Ratio of Turnover Cost to Salary∗

N/A†

$37,000–$41,000

$38,400

$27,000

Nursing Salary

$6.1 million–$8.2 million

N/A†

N/A†

$0.55–$1.3 million

$0.6–$1.6 million

Total RN Turnover Cost

December 2, 2004

Advisory board,

4 hospitals

Jones, 19906,23

19998

Sample

Previous Nursing Turnover Cost Studies

na341206-2

Author, Date

Table 1.

Aspen Pub./JONA 4:24

JONA • Vol. 34, No. 12 • December 2004

Aspen Pub./JONA

na341206-2

December 2, 2004

4:24

These differences become more apparent when human capital theory is considered. From the individual perspective, human capital reflects the knowledge and skills embodied within a person that result from prior investments in education, training, experience, and previous jobs, all of which, theoretically, make the person more productive and able to command higher wages than others without the same complement of human capital.12,16–18 Individuals make decisions about their own human capital investments based on their perceptions of themselves relative to the market, ie, the knowledge and skills they can offer in the market, the knowledge and skills they could offer with additional investments, and the amount the market is willing to pay for their complement of human capital. Individuals invest in human capital in various ways. For example, they make outlays of time and money to pay tuition for additional schooling, or to gain experience in a new area of specialization, and they change jobs and/or relocate, all in anticipation of future returns in excess of the returns expected if they made no additional investments. Returns may accrue to the individual in the form of higher wages, the potential for long-term wage increases or lifetime earnings, increased benefits, and future job growth and opportunities. Individual investments also benefit the organizations where nurses work as well as society, which gain from nurses’ unique contributions in the form of nursing knowledge, skills, and services. From an organizational perspective, human capital contributes to collective or group knowledge, skills, and abilities of employees, including their educational backgrounds, expertise, and relationships that make the organization more productive and increase financial performance. This aggregate of human capital is sometimes called “social capital,” whereby the interactions in organizations are valued based on their contribution to organizational performance and returns.19 Organizations may make numerous investments in employees, such as: a) devoting time and money to seek out and hire individuals with certain knowledge, skills, and abilities; b) training new employees to familiarize them with the organization; c) socializing new hires into their work unit; d) structuring competitive benefits; e) offering competitive salaries; f) providing on-the-job training to educate employees in new techniques and technology; and g) paying tuition for employees who gain additional education and increase organizational capacity. Organizations also invest through ongoing retention efforts targeted at maintaining a high-

JONA • Vol. 34, No. 12 • December 2004

quality and stable workforce, such as the creation of a rewarding work environment, and compensation plans that reward individual human capital investments and stable performance behaviors. Returns can accrue to the organization in the form of increased revenues, organizational performance, and/or reputation. An organization investing in nurses through training and other mechanisms would seek to retain nurses through such activities as raising wages to ensure a return on past investments. Conversely, nurses have less incentive to leave if their nursing knowledge and skills are recognized and valued by the HCO.

` Conceptualizing Nurse Turnover Vis-a-vis Human Capital Theory Nurse turnover occurs when nurses terminate their employment within an employing HCO (external turnover), or when they change jobs or positions with their employing HCO (internal turnover). When nurses change jobs or move to a different position within their employing organization, little effort is generally directed at understanding or reducing turnover because it is not viewed as an organizational loss. When nurses change jobs within their employing HCO, it suggests that there are opportunities for professional growth and advancement available to them with their employing HCO. For example, a nurse may change jobs within a HCO to gain experience in a specialty area, to advance to a management or educator role, or to work in an area with more appealing working conditions. However, losses may result from internal RN turnover, if it costs more to replace the nurse who changes jobs internally than it does to fill the vacancy he or she is filling. Turnover is viewed in HCT as an individual investment for which the individual or organization expects a return. For example, when a nurse decides to change jobs or employers, he or she incurs the opportunity costs of job search and information gathering, moving, and other personal losses that accompany changing jobs, and potential short-term salary interruptions. By changing jobs and/or employers, nurses are trading off the costs and benefits of staying in their present job and organization with the costs and benefits of leaving, relative to anticipated longterm returns on their human capital. While nurses may be unaware of all of the costs and benefits of changing jobs, they may be willing to incur various short-term costs if doing so offers the promise of long-term gains in improved working conditions, career growth and advancement opportunities, job satisfaction, compensation, and life fulfillment.20,21

565

Aspen Pub./JONA

na341206-2

December 2, 2004

4:24

In contrast, nurses who perceive better opportunities by remaining in their present job or organization than elsewhere are likely to stay in their current job or move to a different job within their employing organization, thereby avoiding the costs of changing jobs. While turnover—and particularly external turnover—is typically viewed as an organizational cost, it can also yield organizational benefits. HCOs may benefit from nurse turnover in that it provides opportunities to gain staffing flexibility, acquire an infusion of new ideas and innovations, and achieve cost savings from the lower salaries and fringe benefits paid to newly hired RNs. Also, when nurses leave, it provides HCOs the opportunity to replace departing nurses with others who may perform at a higher level or be a better “fit” with the organization’s needs and philosophy, and enables the organization to hire new RNs with experience in a new service area. Usually, however, nurse turnover represents a cost to HCOs that is especially challenging when nursing shortages exacerbate RN turnover and its costs. Nurses’ working conditions often suffer under shortage conditions, affecting nurses’ job satisfaction, morale, and productivity21 ; nurses, in turn, may be more apt to turnover in search of improved working conditions and/or higher pay.20 Shortages also tend to create vacancies within HCOs and new employment opportunities for nurses who are contemplating a job change. As nurses turnover, fewer nurses may be available to staff units, and those who remain have to work harder and/or longer hours, sometime on unfamiliar units. Healthcare administrators obviously must address RN turnover to meet staffing and patient care demands and ensure ongoing operations, but they may do so by employing increased numbers of temporary or agency nurses to fill RN vacancies. Nurses who remain in the HCO work side-by-side with temporary nurses who are brought in to meet staffing needs, but who are often paid more than permanent nursing staff. Even if the temporary RN does not receive a higher total compensation than permanent staff (ie, permanent staff may receive benefits not available or provided to temporary nurses), the resulting environment may breed even greater discontent and dissatisfaction among permanent staff. Thus, the phenomenon of nurse turnover, especially during periods of shortage, may be characterized as one in which turnover begets turnover. For example, nurses may change jobs or leave the workforce due to increased job stress, dissatisfaction, burnout, or other factors; nurses may leave be-

566

cause of the departure of colleagues or disruption of the group; and/or nurses who had no intentions of leaving may do so because there are greater job opportunities in the market.22,23 The result may have detrimental effects on the quality of care, patient and staff safety, and the cost-effectiveness of care delivery.

Human Resource Accounting Methods Human capital theory has been used to derive human resource accounting methods13,24 for valuing the contributions of “knowledge-workers”14 within organizations and examining the costs of employee turnover.7,13 These methods use micro-costing, or accounting, techniques to operationalize HCT and “regard investment in nurses in the same way as capitalization of buildings, equipment, and inventory.”15 These methods also provide a way to examine the investments made in employees who leave, based on the assumption that employee investments are valid if the returns—in terms of productivity and/or revenues—exceed the total investment. Human resource accounting methods are appropriate for calculating the costs of nurse turnover because they treat the costs of replacing nurses who leave as human capital losses that decrease future returns on prior human capital investments. Replacement costs include the costs of recruiting, selecting, hiring, and developing a new employee to reach a given performance level.13 These costs relate to the major constructs of HCT. For example, replacement costs reflect all investments that an HCO has made in hiring nurses to increase workforce capacity and productivity. This approach assumes that if replacement costs (or past investments) are known, these costs can be used to determine returns on investments, or the profits or losses that result from prior investments. The incentive for organizations is to retain employees because of prior investments and the potential loss of future returns from those investments when an employee leaves. Human resource accounting methods recognize that turnover-related costs may be incurred by HCOs for the obvious reasons of recruiting and hiring new nurses. However, nurse turnover may be costly for less obvious reasons, such as the inability to hire comparably qualified RNs to replace those who leave, and even if comparably qualified RNs are available, a newly hired RN will need time to become familiar with the organization and processes. When an RN leaves an HCO, he or she also takes specific knowledge of the HCO to a new employer, which may mean a loss of “competitive advantage”

JONA • Vol. 34, No. 12 • December 2004

Aspen Pub./JONA

na341206-2

December 2, 2004

4:24

to the original HCO over the short or long run. Administrators may be concerned about the turnover of employees with knowledge, skills, and training that are specific to the organization, and should be willing to invest in employee retention.12 From an economic perspective, both the behavior of employees and organizations would suggest that low turnover should be associated with higher wages, and vice versa, all things being equal.20 This does not mean that individuals will change jobs solely based on wages, or that raising wages will retain all employees in organizations. However, it does suggest that individuals may base turnover decisions on the desire for higher wages over the long run, and organizations concerned with turnover will look for a wage that maximizes employee retention and minimizes overall costs.

The Nursing Turnover Cost Calculation Methodology The Nursing Turnover Cost Calculation Methodology (NTCCM) was developed over a decade ago6,25 to calculate the costs of nurse turnover by identifying the major cost components of replacing nurses who leave and estimating total and per-RN turnover costs. The original NTCCM (components of which are illustrated in Table 1) was based on the work of Hall24 and Hoffman.26 This methodology defined the 2 broad categories of nurse turnover costs as direct and indirect. Direct costs included advertising and recruiting costs, the costs of unfilled RN positions, and hiring costs; indirect costs included orientation and training costs, the costs of decreased new RN productivity, and termination costs. Using human resource accounting methods, total and per RN turnover costs were calculated for each of the 6 categories. An updated version of the NTCCM recently was used to measure nurse turnover costs and will be discussed in Part 2 of this series. The NTCCM was updated in several ways. First, NTCCM costs and cost categories were refined by identifying relevant omitted costs through an extensive search of the nursing, healthcare, and business literature. Second, new calculation methods were developed and defined to represent new nurse turnover costs and cost categories. Third, an expert panel (composed of financial experts with knowledge of microcosting techniques, economics experts in human capital theory, and nurse researchers and practicing nurse executives with knowledge of nurse turnover and healthcare financing) evaluated new cost categories, calculation methods, and data elements. The costs, cost

JONA • Vol. 34, No. 12 • December 2004

categories, calculation methods, and data elements were modified based on the expert panel recommendations. Table 2 provides an overview of the updated NTCCM, with 2 broad categories redefined as Prehire and Post-hire nurse turnover costs. Figure 1 illustrates conceptually the relative periods of time over which nurse turnover costs are presumed to accrue. All of these NTCCM costs represent investments that an HCO makes to put nursing staff members in place and preserve or improve organizational productivity. The organization makes these investments in anticipation of recovering those costs—in the form of future returns on investment—during the tenure of the RN staff member. An HCO’s return on nurse investments will depend on the nurse’s conditional value (ie, the value of potential services nurses can render) and the nurse’s length of tenure with the HCO.13 The updated NTCCM reconceptualizes nurse turnover costs as occurring both before (Pre-hire) and after (Post-hire) a new nurse is hired to replace nurses who leave, rather than the original categorization of direct and indirect costs. The major categories of the NTCCM were renamed to avoid confusion with economics and finance meanings of the terms “direct” and “indirect,” and to reflect the timing of the turnover cycle, and the fact that direct costs (ie, “visible” costs that can be traced to a specific activity) and indirect costs (ie, “invisible” costs that cannot be traced to a specific activity but are incurred generally across multiple activities)13 occur across all cost categories of the revised NTCCM. Pre-hire costs of the NTCCM are incurred by an HCO during the process of recruiting new RNs to replace nurses who leave, and occur prior to the time that the new nurses are employed on staff. Prehire nurse turnover costs include: (1) advertising and recruiting, or the obvious costs to market open positions; (2) vacancy, or losses that are incurred while attempting to fill open or vacant positions resulting from RN turnover; and (3) hiring, or costs that are required to bring a new nurse on staff. Post-hire costs are incurred after new nurses are hired to fill RN vacancies, but prior to an employed nurse turning over. Posthire nurse turnover costs include costs associated with (1) orientation and training while newly hired RNs become familiar with organizational policies and procedures; (2) new RN productivity, or costs incurred by the HCO during the period of time required for newly hired nurses to become 90% productive; (3) preturnover productivity, a new cost category that reflects productivity changes (for individuals and workgroups) that may

567

Aspen Pub./JONA

na341206-2

December 2, 2004

4:24

Table 2. Pre-Hire and Post-Hire Costs of the Updated Nursing Turnover Cost Calculation Methodology (NTCCM) Pre-Hire Costs: Costs incurred during the recruitment and hiring of RNs to fill RN turnover vacancies.

Post-Hire Costs: Costs incurred after new RNs are employed to fill RN turnover vacancies.

Advertising and recruiting: Costs associated with attracting new RNs to fill vacancies caused by prior RN turnover. • Recruitment personnel salaries and expenses • Supplies • Job fairs, seminars • Student visitation days • Advertising Vacancy∗ : Costs incurred while attempting to fill open positions that result from RN turnover and staff shortages. • Temporary nurses • Overtime • Closed beds • Productivity of unit staff† • Patient deferrals† • Adoption of new staffing programs† Hiring: Costs incurred once a prospective RN employee enters the interview process or has accepted a position within a healthcare organization to fill an RN turnover vacancy. • Interviewing personnel time, salaries, and expenses • Employment processing • Bonuses • Search firm costs† • Background checks†

Orientation and training: Costs incurred while familiarizing new RNs with policies and procedures to prepare them to fill RN vacancies. • Training personnel salaries and expenses • Supplies • Equipment • Preceptors Decreased new RN productivity: Costs incurred during the time required by new RNs to become 90% as productive as seasoned RNs and assume a patient care assignment expected of RN staff. • New RN productivity during “learning” period • Supervisor/co-worker productivity† Decreased pre-turnover productivity† : Costs incurred during the period immediately before turnover occurs. • Departing RN† • Co-workers† • Supervisor† Termination: Costs that are incurred upon the departure of an RN employee. • Exit interview personnel time, salaries • Supplies and expenses • Unused vacation and sick time • Early retirement†

RN, registered nurse. ∗ Category renamed (from “Unfilled Positions”) in updated NTCCM. † New costs or category added to update NTCCM.

occur during the 3-month period immediately before turnover occurs; and (4) termination, or costs incurred by a HCO upon an RN’s resignation and departure. Several steps were involved in the process by which the updated NTCCM was employed. A data collection tool was developed to facilitate data collection corresponding to cost, cost categories, and data elements needed to calculate turnover costs. The data collection tool alone does not provide nursing turnover cost results, but provides a way to retrieve data for the analysis component of the NTCCM. The actual calculation of nursing turnover costs requires data collected by this tool and semistructured interviews, which were used to gather additional data that was necessary for calculating nurse turnover costs, but was not easily captured by the data collection tool. However, simply summing data from these sources will not result in an accurate calculation of nursing turnover costs for the study period. To address this issue, a spreadsheet model was developed to include a series of calculations that were used for data entry and analysis. Total and per-RN turnover cost estimates were then derived using these processes. Estimation of turnover

568

costs in this manner helps to identify the sources and magnitude of nurse turnover costs.

Conclusions Administrators in HCOs experiencing nurse turnover are faced with trading off the costs of turnover, including replacement costs, with the costs of retaining nurses who have organizationspecific knowledge. In many cases, HCOs may make human resource and organizational decisions without full knowledge of the trade-offs. Whether these decisions are cost beneficial for individuals or organizations is largely unknown, especially under constrained nursing labor market conditions when there are insufficient numbers of nurses available to fill vacancies. It is logical to expect, however, that in a constrained labor market, the advantage might go to the nurses who leave, given that they are in short supply and employment opportunities may be abundant. Also, under poor working conditions, nurses may leave in search of a better work environment, even if doing so means taking a short-term loss of wages.27 Gaining a better understanding of nurse

JONA • Vol. 34, No. 12 • December 2004

Aspen Pub./JONA

na341206-2

December 2, 2004

4:24

Figure 1. Turnover cost accrual timeline used in this study. Timeline not drawn to scale; varies by individual.

turnover costs and benefits provides a way to begin designing interventions to adequately address RN turnover in ways that recognize nurses’ human capital potential. Human capital theory and human resource accounting methods provide a means of conceptualizing RN turnover and replacement costs, and developing methods to categorize and calculate RN turnover costs. These methods recognize nurses as organizational assets with knowledge, skills, and abilities that impact organizational productivity and performance. The updated NTCCM uses these methods to derive more realistic and accurate estimates of nurse turnover costs. Nurse executives can use the resulting information in organizational deci-

sion making, and to develop policies and practices aimed at nurse retention. Part 2 of this series will illustrate an application of the updated NTCCM using data from an acute care hospital and demonstrate how the costs of nurse turnover can be used to build a business case for nurse retention.

Acknowledgment This research was supported in part by a Faculty Research Opportunity Grant from the University of North Carolina-Chapel Hill School of Nursing. The author also gratefully acknowledges the thoughtful comments of colleagues Drs Barbara Mark and Mary Lynn on an earlier version of this article.

References 1. FitchRatings. Nursing shortage update. 2003. Available at: www.fitchratings.com. Accessed July 15, 2004. 2. VHA Inc. The business case for workforce stability. 2002. Available at: https://www.vha.com/research/public/stability. pdf. Accessed July 15, 2004. 3. Business Editors. Unifi Network, A Division of PricewaterhouseCoopers, uncovers link between employee turnover and

JONA • Vol. 34, No. 12 • December 2004

customer satisfaction. 2000. Available at: http://crm-daily. newsfactor.com/perl/story/5894.html#story-start. Accessed August 4, 2004. 4. Press Ganey. Study confirms nursing shortage affects patient satisfaction. 2004. Available at: http://www.pressganey. org/scripts/news.php?news id=57. Accessed July 15, 2004.

569

Aspen Pub./JONA

na341206-2

December 2, 2004

4:24

5. Carpenter D. Going, going, gone: nurses and other staff bid hospitals farewell. Hosp Health Networks. 2000;74(6):32– 42. 6. Jones CB. Staff nurse turnover costs: part II, measurements and results. J Nurs Adm. 1990;20(5):27–32. 7. Wise LC. Tracking turnover. Nurs Econ. 1990;8(1):45– 51. 8. Advisory Board Company. A misplaced focus: reexamining the recruiting/retention trade-off. Nursing Watch. 1999;11:1–14. 9. Stone PW, Duffield C, Griffin P, et al. An international examination of the cost of turnover and its impact on patient safety and nurse outcomes. Proceedings of the 37th Biennial Convention, Sigma Theta Tau International. Toronto, Ontario Canada, November 3, 2003. 10. Waldman JD, Kelly F, Sanjeev A, Smith HL. The shocking cost of turnover in health care. Health Care Manage Rev. 2004;29(1):2–7. 11. McConnell CR. Staff turnover: occasional friend, frequent foe, and continuing frustration. Health Care Manager. 1999;18:1–13. 12. Becker GS. Investment in human capital, a theoretical analysis. J Pol Econ. 1962;70:9–49. 13. Flamholtz EG. Human Resource Accounting. 2nd ed. San Francisco, Calif: Jossey-Bass Publishers; 1985. 14. Drucker PF. Management and the world’s work. Harvard Bus Rev. 1988;66(5):65–76.

570

15. Mann EE. A human capital approach to ICU nurse retention. J Nurs Admin. 1989;19(10):8–16. 16. Cohn E, Geske TG. Economics of Education. 3rd ed. New York: Pergamon Press; 1990. 17. Kiker BF. Historical roots of the concept of human capital. J Pol Econ. 1966;74:481–499. 18. Schultz TW. Investment in human capital. Amer Econ Rev. 1961;51:1–17. 19. Coleman JS. Social capital in the creation of human capital. Amer J Soc. 1988;94:S95–S120. 20. Ehrenberg RG, Smith RS. Modern Labor Economics: Theory and Public Policy. 4th ed. New York: Harper Collins Publishers; 1991. 21. McCloskey JC. Breaking the cycle. J Prof Nurs. 1995;11(2): 67. 22. Cavanagh SJ. Nursing turnover: literature critique and methodological critique. J Adv Nurs. 1989;14(7):587–596. 23. Staw BM. The consequences of turnover. J Occup Behav. 1980;1(4):253–273. 24. Hall TE. How to estimate employee turnover costs. Personnel. 1981;58(4):43–52. 25. Jones CB. Staff nurse turnover costs: part I, a conceptual model. J Nurs Admin. 1990;20(4):18–22. 26. Hoffman FM. Cost per RN hired. J Nurs Admin. 1985;15(2):27–29. 27. Jones CB. Registered nurse turnover and the changing health care system. Nursing Connections. 1996;9(1):35–48.

JONA • Vol. 34, No. 12 • December 2004