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Often a physician's resignation, early retirement, or sudden departure can mark a major loss for an organization and its staff. The huge expense created by turnover may have a facility questioning whether or not they can afford to go through the hiring process to find an adequate replacement. And rightly so, the process can be daunting.
Rough estimates attempt to quantify how much turnover is actually costing you. Factors like lost revenue, start-up, recruitment agency fees, sourcing and advertising, interview and travel, signing bonuses and moving expenses can add up quickly—not to mention the time you'll spend doing it. According to a recent study, the cost of hiring a new physician can easily top one million dollars when you consider lost revenue, recruitment fees and annual start-up costs.
Working with locum tenens recruitment firms is one way to reduce the costs associated with turnover. These organizations take it upon themselves to source, advertise, interview, reference and cover travel for physicians interested in your organization. So you save time and money.
The cost of a locum tenens firm may seem high at the onset but when you consider how much revenue a new physician will generate for your business, the cost is minimal. Take family practitioners for example: on average an FP will earn 1.7 million dollars annually for a facility. Subtract the FPs annual salary, the average annual cost of a recruitment firm and you may be surprised. Physicians will generate—on average—1.4 million dollars for your facility each year.
What's true for family practitioners is also true for every specialty in medicine today. More physicians mean you'll be able to treat more patients, and more patients mean more revenue. While it may be difficult to look past the initial expenses associated with turnover, once that new physician is hired the revenue he or she generates will far outweigh any cost incurred in the hiring process.