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How do I calculate the new graduate nurse turnover at my facility and use it properly to make a case for a nurse residency program?

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Hospitals usually track the amount of nurses coming and going within an organization; it is a prominent data metric called turnover. Hospitals use their rates of nursing turnover to give them clues as to how well their onboarding efforts are, both in recruiting nurses as well as orienting them to their position in the hospital. Nursing turnover is usually expressed as a percentage and follows a simple formula:

(# of nurses who leave in a given period of time x 100)/ (#of nurses recruited in a given period of time)

 Often, “a given period of time” is one year or 12 months after the new graduate starts working, and essentially answers the question, “Of the new graduate nurses hired last year, how many are still employed?”

You will undoubtedly need help, and the place to start is your HR department. If you are lucky, the department will already be tracking new graduate turnover for the CNO. If you are like most, however, you will probably just have to book an appointment with someone in HR and crunch through the new hire files. Try to get at least three years of new graduate data.

High rates of turnover within an organization usually indicate that the organization is not retaining its nurses, which is often due to poor recruitment and orientation. The higher the turnover rate, the more money the hospital will spend to replace those nurses who leave. Recent research also found that hospitals with high turnover have:

  • A lower return on assets
  • A lower cash flow margin
  • Higher length-of-stay rates for their patients
  • Higher average cost per discharge
  • Decreased efficiency
  • Decreased productivity

It is costly and expensive to recruit, hire, and train new nurses to work in the units. It is even more expensive to hire new graduate nurses; the preparation-practice gap ensures that graduate nurses will need more initial training and orientation to achieve competency than an experienced nurse. Because experienced nurses are in such short supply, hospitals are turning more and more to new graduates to fill their vacancies, which is a more expensive but necessary option. The higher rates of new graduate nurses in the hospital directly equate to higher onboarding costs, and that makes it even more expensive for hospitals when new graduate turnover is high.

If a nurse residency program (NRP) reduces the turnover rate for new graduate nurses, then it will save your hospital money. If the NRP saves the hospital more money (in reduced turnover) than it costs to develop and run, then it will pay for itself and essentially make money for the hospital by reducing the expenses made by the revenue generating departments to train and orient new graduate nurses.

Jim Hansen, MSN, RN-BC

(May 2011)