Healthcare industry to save 280 million through reduced recruitment costs - 12/2001

Temporary staff management costs in the healthcare sector could be cut by as much as one third by applying electronic procurement techniques to the recruitment of people, according to a report issued by Bloor Research, an IT research house, and Netengines, a staff supply chain technology company. E-procurement, the purchasing of goods over an electronic network such as the Internet, could also shorten the time it takes to recruit, check accreditation and deploy new healthcare workers, which could reduce staff shortages and hence patient waiting lists, according to the report.

An ëe-procurement for peopleí model proposed by the report, shows how the use of healthcare workers in an organisation can be more efficient, how the recruitment process can be streamlined by automating time intensive procedures and how unplanned ëmaverickí recruitment of staff can be eliminated. These efficiency improvements can reduce a typical healthcare companyís staffing expenditure by 35% over three years. When applied to the UK healthcare industryís current temporary staffing spend of 800 million per year the savings could be as much as 280 million.

The report, titled ëThe Difference Between People and Paperclipsí, proposes that the recruitment of temporary and permanent staff in the healthcare services industry can be treated as a supply chain issue. It describes how similar web-based technology that is producing huge savings for the procurement of commodities such as pens and paper clips, can be deployed in the staffing supply chain to give similar savings. IBM for example, has been reported as having saved $7billion from its purchasing costs over five years, mainly from using e-procurement initiatives for commodity goods.

Using an e-procurement for people model, a typical healthcare services provider, e.g. one operating over 30 hospitals, employing 30,000 staff and recruitment costs of over 3 million a year (management time, staffing agency fees, advertising costs), can achieve savings of approximately 3.6 million in three years. The technology described will enable staffing managers to look at all the supply sources for staff, internal and external, and streamline their recruitment, accreditation and deployment. In addition to cutting the management time needed for this process, the technology eliminates the random recruitment of staff and ensures that all staff have adequate accreditation.

Robin Bloor, CEO of Bloor Research explains: ìAutomating the staff procurement process will not only provide huge cost savings for healthcare companies, but also it will speed up the process of filling vacancies - initial estimates are roughly 40%. There are a number of reports of large numbers of healthcare professionals leaving the industry, which is creating a staff shortage. However, if healthcare organisations had an amalgamated view of all sources of staff supply, they could fill vacancies much faster and cut down the staff shortage. This should have a knock-on effect and could reduce the patient waiting lists.î

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