April 23, 2024 RN retention: The financial impact of managers’ meaningful interactions

Consistent meaningful interactions between nurse managers and their RN team members have a strong and statistically significant impact on team member retention. With high spans of control and escalating responsibilities, these new insights provide a business case for investing in managers to enable them to sustain effective levels of team interaction.

Tim Darling

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What the data says
This article builds on the Spring 2024 report, Quantifying Nurse Manager Impact, a co-publication between Laudio Insights and the American Organization of Nurse Leaders (AONL). The analysis is from a three-year longitudinal study of 3,000 nurse managers and their team members in over 50 acute care facilities and many more ambulatory locations nationwide.

One of the most insightful findings in the report was that, inclusive of all sites of care and specialties, there is a statistically significant association between managers’ consistent, purposeful interactions and increased odds of RN retention. This novel data underscores the powerful impact managers can make on employee satisfaction and retention, particularly when their team interactions are timely, personalized, and intentional.

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The values show the improvement in retention for an RN team with an 80% baseline retention probability. Introducing one meaningful interaction per team member per month for a year is associated with a remarkable 7-point turnover decrease, with a resulting annual turnover rate of 13%.

For a hospital with 1,000 RNs, this equates to 70 RNs saved every year; a savings of $3.7M in replacement costs avoided, assuming an average $52,358 cost per RN turnover event (NSI 2023).

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While managers have a wide variety of interactions with their team members in the hallways, the break room, and at team meetings, the interactions documented in the Laudio platform and discussed in the Quantifying Nurse Manager Impact report are specific and purposeful, defined as:

    • Interactions documented by the manager in their local working files (e.g., sent email, completed new hire check-in, added note to personnel folder, scheduled follow-up reminder). The interactions can be in-person or through email or text message.
    • Interactions that are specific to the work or behavior of the individual employee in the categories of: celebration and recognition, check-ins, and corrective actions.

The impact of specific types of 1-1 manager interactions varies, but all are associated with a positive effect on RN retention. The chart below shows the relative association between a variety of purposeful interactions and increased odds of RN retention. As shown below, recognition and celebration-related interactions have the highest impact.  The actions that are typically prescribed and scripted (e.g., new hire check-ins) are associated with less impact.

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What it means 

Managers’ purposeful interactions with their teams create tremendous operational and financial value for health systems – but not all interactions have equal impact.
    • Among the most impactful activities frontline managers can do is having consistent meaningful interactions with their team members.
    • Recognition that is timely, personalized, and specific to the work the team member is doing has the greatest impact of all, followed by celebrations.
    • When possible, emphasis should be placed on those types of authentic, personalized interactions as opposed to prescribed and scripted ones.

The outsized financial impact of consistent meaningful interactions means that these insights can be a communication bridge from an organization’s financial needs to the standard work practices of all leaders.
    • There is often a wide gap between organizations’ cost savings goals and the work of frontline leaders. Directors, VPs, and C-Suite leaders are typically most aware of strategic priorities and financial needs of an organization. They are also aware of the activities or adjustments needed to meet them, but the connection to frontline leader work is often less established.
    • While many managers value the impact of having a strong connection with their teams and observe the impact this has on their team members firsthand, few have seen the broader impact to the organization quantified and even fewer have prioritized standard work to optimize specific financial outcomes.

There is a strong business case for investments that allow managers to reach and maintain the optimal cadence of meaningful team interactions.
    • With high spans of control, elevated overall levels of responsibilities, and compounding administrative and organizational commitments, managers today rarely have the time to naturally reach and maintain these levels of purposeful team interactions.
    • This new data can help shift the perspectives to help managers focus their time on the types of interactions that matter most.


What the implications are for healthcare leaders 

Training and coaching for managers on how to convey timely and personalized recognition should be a priority for health systems.
    • One such approach is to provide leadership training for managers that focus specifically on developing ways to have meaningful interactions with their teams.
    • These insights can also become a core part of onboarding for new employees in leadership roles.
    • Leadership training is not enough though; with managers already stretched thin, technology solutions that make this level of interaction feasible – both by surfacing opportunities and making them easy to act on – also need to be considered, as discussed below.

Health systems can add tools and support systems that make it easier for  frontline managers to maintain consistent, purposeful interactions.

    • Given that one purposeful interaction per month per RN is associated with large improvements in retention, an ROI-driven approach could justify investments in tools and support systems that specifically help managers lead their teams more efficiently and effectively.
    • As a first step, given managers’ broad and time-consuming responsibilities, executives would benefit from partnering with HR and Information Technology (IT) leaders to identify solutions that reduce administrative burden and free up manager capacity for team engagement. For example, HR can help move activities from managers to centralized support roles (e.g., recruiting processes).
    • Executives can invest in software platforms that specifically support managers and are designed for leaders’ standard work (as opposed to systems that primarily support generic organizational processes or reporting needs). Popular examples include platforms that support self-scheduling, reduce managers’ administrative burden, or support purposeful coaching, check-ins, and recognition of team members by surfacing timely opportunities for engagement or reminding managers about upcoming milestones.

Interested in exploring the data further? Join us on May 21st @ 1PM ET for a live webinar delving into the groundbreaking insights from the Quantifying Nurse Manager Impact Report.

Background on the analysis and the data set 
A Bayesian multi-level logistic regression model, leveraging the collection of employee, manager, and facility attributes, as well as documented purposeful interactions, predicted the odds of employee retention. These analyses are based on RNs in the Laudio data set, which comprises 34,301 RNs in 95 facilities with 36 months of longitudinal data each.  

Cost of RN turnover: NSI Nursing Solutions, Inc., 2023 NSI National Health Care Retention & RN Staffing Report

NOTE: Some of the charts and wording in this article were previously published in Quantifying Nurse Manager Impact in Spring 2024, a joint publication between Laudio Insights and the American Organization for Nursing Leadership (AONL).

Written by: Tim Darling

President of Laudio Insights

Tim Darling is a co-founder and President, Laudio Insights.  With over 20 years of experience in healthcare technology, Tim has a real passion for using data and analytics to serve the challenges facing healthcare organizations. Prior to Laudio, Tim was on the leadership team of a healthcare education analytics company and he spent seven years as a consultant at McKinsey & Company.  He has an MBA from Carnegie Mellon and BS degrees in Mathematics and Computer Science from the University of Maryland, College Park.

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