4 MSP Strategies to Optimize Contingent Workforce Management and Stabilize Talent Costs in Healthcare

Hospitals are shifting gears from pandemic staffing models. During the surge, many healthcare systems relied heavily on travel nurses to fill staffing gaps. This offered nurses flexibility, higher pay, and development opportunities. However, similar to how many companies are transitioning workforces back to the office, hospitals are now looking to move away from their reliance on travel nurses. This shift reflects a desire for greater stability and potentially lower costs.

As a result, executives in healthcare are relying on contingent talent, also known as non-full-time employees, to augment their FTEs, increase agility and take a more strategic approach to their talent strategy. And to optimize the benefits of their contingent workforce, hospitals are looking to Managed Service Providers (MSPs) for their consultative approach, helping to control costs, draw on industry knowledge, provide worker compliance expertise, supplier optimization, automation, analytics and more. Learn more about the advantages of partnering with an MSP in our blog.

Below are the four main ways MSPs can assist the healthcare industry in controlling labor expenses and improving workforce management.

1. MSPs Help Organization Meet Compliance Needs

Many healthcare organizations lack a centralized management platform that ensures each worker’s certifications are up to date. Granted, maintaining compliance can be complex. For example, a clinicians’ licenses and certifications can be valid between one to three years, while most nursing licenses need to be renewed every three years, and training for Basic Life Support should be renewed every two years. Given these complexities, it’s important to note serious compliance issues can arise from oversights.

The Joint Commission (TJC), the Department of Health and Human Services (HHS), and other organizations often inspect hospitals. Any auditing body has the ability to enter a facility at any time and obtain a worker's compliance file.

A leading MSP partner will help the organization ensure any contingent worker placed within the organization is compliant to work and remains compliant throughout the entirety of the assignment. In other words, the MSP bears the accountability to verify and preserve up-to-date records, including during hiring and after.

Background checks, licenses, certifications, and any other client-specific needs are all gathered and 100% validated by the MSP before personnel begin an assignment. The MSP partner will also offer ongoing compliance monitoring during the job. Learn more about how an Employer of Record (EOR) can help your organization stay on top of the latest changes in compliance. 

2. MSPs Offer Insights into Utilization Trends and Market Dynamics

Hospitals utilized contingent talent prior to COVID-19 to address clinical specialties that were difficult to fill, unforeseen absences, and seasonal census fluctuations. While their reliance on contract labor was previously on par with other industries, it is currently surpassing them. If this workforce is managed in a fragmented, ad-hoc approach, this is cause for concern.

The challenge for hospitals is returning back to a healthy mix of contingent talent, but they need to figure out how to bring the cost of it down to pre-pandemic levels while attracting and retaining clinical workers.

For the hospital systems that don’t partner with an MSP, they face the difficulties of lacking visibility into how many contingent workers are in the building at any given time or how much they are paying for them. A healthcare organization, for instance, might consist of ten separate hospitals, each with dozens of floors and departments. It is quite challenging to obtain an exact headcount and competitive cost because every facility and unit contracts its workers independently. Lacking the data reporting and visibility around contract labor headcount is a challenge.

To overcome these challenges, an MSP centralizes that ordering process and at the same time maintains accurate employment and hiring data. In addition, it makes sure everyone in the organization has access to that data. More importantly, they help address the challenge of lowering labor costs thanks to market-driven analytics reporting and that much needed visibility.

Learn more when you read our report, “The New Role for the Managed Service Provider (MSP) in Human Capital Management.”

3. MSPs Are Reducing Costs Through Data

Hospitals are experiencing a shortage of talent as more healthcare workers choose more flexible work arrangements over full-time employment. As a result, numerous executives find themselves overpaying in their desperation to fill available positions. By partnering with a leading MSP, this trend can be reversed, as the MSP negotiates rates and contract terms to lower the overall costs of contract labor.

MSPs are able to accomplish this via their vast data pools, which can be examined to find trends that were previously invisible. For instance, if an open nursing position sees fifteen qualified applicants applying at a specific billing rent, to an analyst this suggests there is a market saturation for the given specialty. As a result, the rate can be lowered without needing to compromise retention or talent quality for the role. Data market analytics are a key component to enabling MSPs to lower talent costs for healthcare organizations. Delve into labor market trends for strategies on optimizing your talent supply chain when you download our report. 

4. MSPs Drive More Conversions to Full-Time

Contingent workers are usually relied on to cover staffing shortages, whether due to seasonal demand, unexpected absences, or special projects. However, many organizations also hire contract workers with the goal of turning them into permanent, full-time employees.

As hospitals attempt to bring their contingent labor headcounts down to pre-COVID levels, there is a renewed drive in converting the technician and nurses who travel between assignments, also known as “travelers,” to full-time.

Equipped with a more comprehensive understanding of the healthcare labor market, MSPs are better able to identify the critical signs that indicate a particular traveler's propensity to remain in a specific health system and, ultimately, take a full-time job offer. For example, residing within a certain mile radius of an assignment has been linked to an increased conversion rate.

By helping healthcare organizations remain compliant, providing market dynamics insights, reducing costs and converting more workers to full-time, MSPs can help them improve workforce management, inform strategic decision-making and reach their goals without sacrificing talent quality.

For more information on selecting the best partner for your organization’s needs, grab the Ultimate Guide to Selecting a Managed Service Provider (MSP).

Disclaimer: The content in this blog post is for informational purposes only and cannot be construed as specific legal advice or as a substitute for legal advice. The blog post reflects the opinion of Magnit and is not to be construed as legal solutions and positions. Contact an attorney for specific advice and guidance for specific issues or questions.