By David Alemian
The problem of physician recruitment and retention keeps coming up. I spoke about it last week at a conference in North Carolina. Later this month, I’ll be speaking about it again at the annual conference for the California Association of Rural Health Clinics.
The physician shortage has created an enormous recruitment and retention problem for healthcare organizations. However, the problem is compounded by the turnover rate of non-clinical employees. This is a problem that affects the entire country because we all need healthcare. Moreover, the problem is getting worse by 2025 the U.S. will be short 90,000 physicians. To fix this we only need to look at history.
Years ago, employees would spend their entire careers with the same company, because at retirement they would get a lifetime pension. However, when employers switched to 401ks, the pension plan all but disappeared. The result? Employee turnover rates skyrocketed, because now there is nothing tying the employees to the company.
According to recent numbers from Bureau of Labor Statistics, the average U.S. worker changes jobs every 4.4 years. The cost of replacing an executive is 213% of his or her salary. That means a key executive earning a$250,000 a year will cost over $532,000 to replace… Ouch!!!
We always hear about how important it is to lower the cost of healthcare in this country. Imagine what the turnover cost is for a hospital that has hundreds of high income earning employees, with the average employee changing jobs every 4 ½ years.
So what’s the solution? The solution is to bring back the lifetime pension plan, with a long term vesting period. It worked amazingly well before the 401k came along, and we’ll pay for it with bank financing. In a similar way bank financing creates leverage to purchase a building, bank financing can also be used to make pension plans very affordable. The resulting smoother operation of the organization, and the mitigation of huge employee turnover costs, makes this a very smart strategy.
Absolutely, make sure you come back here next week for another edition of the Alemian file.
About David Alemian
Successfully creating affordable retirement plans guaranteed to last a lifetime is a unique, specialty skill. It’s a challenging arena but respected writer David Alemian makes it look easy. Alemian is a leading retirement expert and nationally recognized authority whose expertise is shared via video columns, numerous journals, and talk-shows.
His national recognition results from both revolutionizing and revitalizing how organizations and individuals like you and me plan and save for retirement. Alemian is considered “The Go-To Guy” for creating and implementing absolutely irresistible, lifetime retirement pension programs.
Formerly the host of “It’s About Money” Radio Show, Alemian has also produced and is featured in over 200 financial education videos. Additional content can be found in many well-respected, publications including: MD Magazine, Physician’s Money Digest, Physicians Practice, Journal of Clinical Oncology, Consultant Live, Psychiatric Times, Cancer Network, OB/GYN.net, and The Healthcare Executives Network.
This article reflects the thoughts and opinions of the author and is being provided for educational and informational purposes only. It should not be considered financial or tax advice. Please consult your financial or tax advisor about your situation.