As workforce scarcities intensify for nearly all healthcare organizations, a common question (usually voiced in anxious tones) is arising in many boardrooms: “What is happening with staffing?” And many CEOs may be silently thinking, “Staffing is in my lane—the board should focus on governance.” However, a discussion about the board’s role with respect to workforce shortages is highly relevant amid today’s labor challenges.
Although staffing and human capital remain the chief executive’s responsibility, the severity and long-haul nature of the current round of healthcare workforce shortages have elevated this subject to governance-level attention. It is appropriate for the governing body to develop an understanding of the long-term strategic implications of a severe workforce shortage. And because these deficiencies are affecting organizational financial health, growth plans and even mission fulfillment, a certain level of board involvement should be expected. Finally, boards are not immune to persistent media coverage about the nationwide healthcare workforce shortage.
As with most matters on the board’s agenda, the directors’ focus should be overarching and strategic rather than tactical. Successful CEOs are working with board leadership to ensure governing bodies’ contributions are additive, not redundant of management’s work, and in keeping with the board’s oversight role.
The CEO’s Action Plan
The CEO can heavily influence the board’s approach to workforce-related matters. When CEOs implement the following action steps, the board is more likely to produce thoughtful contributions at the governance level.
Provide the board with a macro-level overview of labor challenges in the hospital or health system’s service area. This summary should encompass demographic trends and labor challenges in all sectors of the region’s economy.
The idea is to provide context for a more specific briefing to the board about the local healthcare workforce scenario. This discussion should cover the clinical and nonclinical workforce, including professional and support, and salaried and hourly markets. The goal is for the board to gain an accurate understanding of the current situation along with a longer-term forecast.
A further goal is to focus the board on trends rather than anecdotes.
Present the organization’s workforce development strategy to the board. The presentation, given by the CEO or C-suite designee, should avoid tactical detail and instead focus on primary themes. The goal is for the board to gain an understanding of management’s approach to tackling the ongoing workforce development challenge, including time frames, financial commitments and expected outcomes.
Led by the CFO and the finance committee, the full board should understand the connection between the current workforce situation and the organization’s financial health. Internal forecasts of labor availability and associated costs may alter growth plans and capital projects. The board needs to understand these realities.
For both context and benchmarking purposes, boards may also benefit from a brief overview of national financial trends.
All boards should be up to speed on regional and national organized labor trends, even if an organization is nonunion. The pandemic galvanized organized labor across nearly all sectors of the economy.
For healthcare organizations with active union contracts, the board should receive information about the relevant labor union’s recent history related to work stoppages and contract negotiations.
For nonunion organizations, a confidential boardroom discussion about unionization in healthcare may be in order. In this instance, boards may wish to create a document outlining the board’s philosophy related to labor unions.
Involve the board (or the appropriate board committee) in a formal review and update to the enterprise risk management plan. Many organizations are adding workforce challenges to the “significant risk” category. The board’s review of mitigation strategies surrounding this identified risk creates another opportunity for the CEO (or C-suite designee) to reinforce the organization’s comprehensive workforce development strategy.
The board should understand the barriers and risk points of care transformation. Many hospitals and health systems are pursuing care transformation across all
clinical divisions. Although care transformation is an operational matter, providing information and education to the board before executing a care transformation strategy is a proactive step. When educating the board on the hospital or health system’s care transformation plans, start by defining what “care transformation” means to your organization. Boards may
not be familiar with this term, which is often defined differently at hospitals and health systems across the nation.
Benefits to the CEO
When the healthcare workforce discussion is conducted at the governance level, the CEO can expect these benefits:
- The board will serve as a thought partner with the CEO.
- Board members with experience in other sectors of the economy will enrich the discussion as they add a nonhealthcare perspective.
- The board will understand that staffing shortages in today’s complex healthcare environment will not be resolved quickly or easily; workforce development in healthcare will require long-range strategies with significant investment.
- The board will have a solid understanding of the direct linkage between staffing and financial results.
- The board is accustomed to considering the financial ramifications of all major decisions; workforce ramifications will be added as an essential consideration in future boardroom decisions.
Final Thoughts
It will be tempting for CEOs to handle human capital-related matters with minimal board communication, which was often the standard in the pre-pandemic world; however, the depth and complexity of workforce shortages has elevated this subject to a higher level of governance attention. Transparency is a highly effective tool to reassure the board that management is appropriately prioritizing energy and effort on workforce matters.
Kimberly A. Russel, FACHE, is CEO of Russel Advisors, a healthcare governance and CEO consulting firm, and an adviser with The Governance Institute (russelmha@yahoo.com).
Editor’s note: For additional information, see The Governance Institute’s April 2022 publication, Healthcare Workforce Scarcities: The Governance Role.
The Bottom Line
- Provide the board with a macro-level overview of labor, as well as an overview of regional and national organized labor trends.
- Present the organization’s workforce development strategy to the board.
- The full board should understand the connection between the current workforce situation and the organization’s financial health.
- Involve the board (or the appropriate board committee) in a formal review and update to the enterprise risk management plan.
- The board should understand the barriers and risk points of care transformation.