Neglected Technology in Human Services Organizations

Neglected Technology in Human Services Organizations

Recently there has been a lot of discussion about technology investments in health and human services organizations. The changing delivery models and healthcare reform are driving investment in EHR/EMR systems, telehealth, remote monitoring and many more technologies that must be considered for sustainable business models. One technology investment that is most neglected is one that drives bottom line results: Human Capital Management.

Many CEOs and CFOs view human resource and payroll systems as a back office necessity but do not see the value and capability in driving an organization’s top line revenue, productivity, efficiency and effectiveness while controlling costs.

Top Line Revenue Growth Through Talent Management and Recruiting

Employee turnover is one of the mostly costly and disruptive business events. The cost of employee turnover easily reaches 150% of the employee salary taking into account recruiting, training, lost productivity and new hire costs. According to Josh Bersin, Principal and Founder of Bersin by Deloitte, “Many studies show that the total cost of losing an employee can range from tens of thousands of dollars to 1.5-2X annual salary.” Given that most health and human services organizations experience the highest turnover in their front line delivery staff ranging from 20-40%, that amounts to a substantial revenue loss. Let’s use the example of case worker making $35,000:
35,000 x 150% = $52,500. For an organization of 500 employees with 20% turnover, that amounts to $525,000 annually. Does your HR system give you this metric? Is this a KPI on your dashboard? Is your CFO working with HR to drive top line revenue?

Productivity

When you take a minute to think about it, your organization is losing out on fulfilling its mission. To hire one person, managers typically interview 5 people taking at least 1 hour each. To hire 100 people, your managers are spending 500 hours per year. To find 5 people to interview, you typically have to screen at least 10 people, normally more. To find 10 people to screen, you might have to look at 50 resumes. The multiplicative effect of lost productivity and disruption spreads invisibly through the organization.

Efficiency and Effectiveness

You might be saying, “I cannot eliminate turnover. That is just the cost of doing business.” No, but you can dramatically change the impact on the organization. If you can reduce turnover, reduce the days a position is vacant, increase the speed of hire, you increase the efficiency and effectiveness of your organization as a whole. By leveraging powerful key performance indicators (kpi) and human capital effectiveness metrics, you can identify problem areas within the organization to take corrective actions.

Cost Control

In most non-profit health and human services organizations, there are still many manual or paper driven processes. Few organizations leverage electronic workflows for approvals to fill a position or hire a candidate. Many CFOs struggle with validating if a position is budgeted. Do you know how many open revenue-generating positions you have at any given point in time? Do you know your budget variances in real-time? Without the control and visibility of a position-control based system, these questions are difficult and time consuming to answer when it is possible that the data is often stale and no longer meaningful.

Summary

As your organization is evaluating investment in new technologies that drive sustainable business models for client treatment delivery, you may also want to consider an overlooked and neglected technology area of human capital management to drive top-line revenue, productivity, efficiency, effectiveness and cost control. The investment in human capital management systems is vitally important when managing organizations as employee demographics change with retiring baby boomers, hiring of millennials, social media and mobile technology. Do not neglect your workforce.

Written by Erik Marsh