Labor cost containment to sustain today and fuel transformation for tomorrow
Workforce management challenges and labor cost containment are pressing priorities in the healthcare industry, as organizations navigate mounting financial pressures, persistent workforce shortages, and rising operational costs. These challenges are further intensified by rapidly changing regulations, shifting reimbursement models, and increasingly narrow operating margins. Healthcare leaders must balance the need to deliver high-quality patient care with the urgent imperative to control labor costs—the largest expense for most organizations. In this evolving landscape, effective cost containment is essential not only for financial stability, but also for sustaining workforce engagement, maintaining excellence in patient care, and ensuring long-term operational resilience.
What if the key to navigating today’s healthcare challenges lies in integrating workforce strategies that drive optimal outcomes while effectively containing costs? Rather than choosing between cost containment, workforce productivity, and staff well-being, healthcare leaders can reframe the challenge: how can we align these goals to create a financially sustainable model that also supports exceptional patient care and a thriving workforce?
Cost containment doesn’t have to mean across-the-board cuts, increased workloads, or reduced quality. It can be achieved through balanced, strategic workforce initiatives, supported by integrated, intelligent solutions that automate administrative tasks and enable a data-driven, enterprise-wide approach to decision-making.
Addressing Workforce Management Challenges: Where Cost Containment Opportunities Lie
Let’s take a closer look at today’s most pressing workforce challenges—and uncover practical, high-impact strategies to contain costs, boost efficiency, and drive sustainable, balanced outcomes across the organization.
Challenges often arise when staffing plans are developed based on a static budget, which rarely accounts for the daily and shift-by-shift variations in patient flow, census and acuity levels. This can lead to instances of understaffing, compromising the quality of care, and instances of overstaffing, resulting in unnecessary labor costs.
By leveraging historical trends and predictive staffing analytics, organizations can create schedules that more accurately reflect real-time demand—far surpassing the limitations of static, budget-based scheduling. This proactive approach minimizes last-minute staffing adjustments, enhances coverage consistency, and ultimately drives greater operational efficiency and improved patient care outcomes.
Health systems across the board have been working to tackle overtime and premium labor costs, but there’s often more work to be done. By taking a deeper dive into these areas, even organizations that have made progress can uncover new opportunities for meaningful savings:
Building overtime reduction strategies that rely on historical data is incomplete at best. Instead, focusing on analytics that combine both scheduling and time/attendance data enables managers and schedulers to view projected overtime and make proactive adjustments to avoid overtime. With clear visibility into scheduled hours and hours already worked, overtime can be addressed before it happens.
Incidental overtime is a block of overtime that is less than an hour in length and usually happens when an employee clocks in a few minutes early, stays a few minutes late, or misses their lunch break. Also called incremental or creeping overtime, the cost of incidental overtime is anything but incidental. After analyzing the overtime data of health systems across the country, the Workforce Management team at symplr found that incidental overtime typically accounts for 5-10% of overtime costs.
These blocks of overtime can often be eliminated by creating awareness and using some simple training initiatives, perfect for quick-win labor cost reductions.
Adopting a variety of timekeeping options, such as location-enabled beacons, can also help your organization reduce incidental overtime. By allowing employees to clock in quickly and seamlessly through their mobile devices, you not only eliminate clocking delays but also improve overall accuracy and convenience—creating a smoother, more efficient start to every shift.
Staffing in silos often leads to missed opportunities in other parts of the organization.
When health systems use standardized staffing practices and technology across the enterprise, they are empowered with data-driven staffing strategies to effectively manage their staff enterprise-wide. Those strategies become even more powerful when managers and staff work collaboratively to fill open shifts. Some examples of these strategies include:
For many health systems, productivity is analyzed at the end of the pay period. However, when productivity is a lagging measure, making adjustments is like aiming at a moving target; you’re using historical data to make future decisions, which means the accuracy of those decisions is hit-or-miss.
With integration between timekeeping and scheduling data, productivity analysis can be more proactive, with the ability to look at what is happening and make corrections to impact results before the pay period ends-not from the rear-view mirror.
See how symplr can help engage staff and improve clinical outcomes and financial results
In today’s healthcare environment, work schedules and staffing policies play a critical role in driving staff satisfaction and retention. Scheduling decisions must strike the right balance between meeting patient care demands, controlling labor costs, and supporting staff well-being. With the high cost of turnover—both in terms of financial impact and operational disruption—leveraging real-time data and adopting more collaborative, flexible scheduling practices are essential to creating a more responsive, equitable, and engaging workforce experience.
More health systems are adopting advanced, AI-powered staffing technology to give employees greater control over when and where they work. Scheduling solutions should leverage robust data—such as skills, credentials, hours worked, and overtime thresholds—to present staff with personalized, eligible shift options, with transparent and flexible incentives. This data-driven approach not only streamlines scheduling but also empowers employees with greater flexibility and ownership over their work-life balance, helping to drive engagement and reduce burnout.
We use mobile apps for everything—why should timekeeping and scheduling be any different? Leveraging mobile devices for these tasks empowers employees with the flexibility to manage their schedules and timekeeping from anywhere, at any time. This level of convenience promotes better work-life balance, boosts engagement, and contributes to overall job satisfaction—key drivers in attracting and retaining top talent in today’s competitive workforce.
At the same time, managers can streamline administrative tasks on-the-go using their mobile devices, improving accuracy and operational efficiency. By minimizing time spent on manual processes, nurse managers and frontline leaders are free to focus on higher-value priorities such as team support, staff development, patient experience, quality and safety, and fostering a positive work environment—all of which are critical to improving employee engagement and long-term retention.
Additionally, both staff and managers benefit from the growing power of artificial intelligence to simplify routine tasks. AI-driven tools offer intelligent recommendations, optimize self-scheduling, and reduce the administrative burden. This creates a more streamlined scheduling process—leading to improved staffing outcomes and a healthier, more supportive workplace culture.
A successful workforce management strategy depends on data-driven solutions that integrate staff, operational, and financial insights to effectively contain costs. Historically, health systems have struggled to achieve a balanced approach, with gains in one area often coming at the expense of others—leading to fragmented results and missed opportunities for cost control.
In today’s complex healthcare environment marked by evolving regulations and uncertain financial dynamics, this siloed approach is no longer viable—health systems must embrace integrated, holistic strategies that optimize resources, contain costs, and drive sustainable, organization-wide success.
Managing the workforce and containing labor costs has long been an important initiative for hospitals and health systems. With labor accounting for more than half of operating expenses, labor cost containment has always been on the minds of healthcare executives, but it is quickly moving to the top of their priority list. A Becker’s Hospital Review survey of 75 healthcare finance executives showed that nearly three-quarters of respondents said that managing labor costs was the top financial concern keeping them up at night1.
With the move to value-based care and reimbursements tied to outcomes, the focus on the workforce is growing in importance for health systems both large and small. According to the CFO at an 18,000-employee health system in the Southeast, “We really made workforce management a priority last year when we put the imperative as one of our key metrics with our strategic plan.” The importance of workforce management is echoed by the CFO at a rural community health system in the Midwest, “Managing productivity is key in light of the fact that reimbursements are steadily decreasing. We need to become much more efficient at the care we provide.”
Workforce management strategies that worked in the past are being re-examined and expanded. There is an increased awareness that the success of a workforce management initiative is based upon both data transparency and increased accountability for executives and front-line managers. “It comes down to initiatives that hold leaders accountable as well as gefting leaders to think differently about how to manage workforce issues,” says the Midwest health system CFO.
Paying closer aftention to the numbers and taking action to achieve befter workforce outcomes is a common focus for the healthcare executives interviewed. “We are just now increasing our oversight and monitoring of unfavorable variances or large year-over-year growth numbers. So workforce management is a priority, but we did not apply any discipline around managing it before. Now we do,” explains the director of finance at a children’s hospital in the Southeast.
With labor cost containment a top priority, we wanted to know where organizations struggle the most with workforce management. We then examined how health systems are addressing those challenges.
Ability to Flex Staff Up and Down Based on Volumes and Patient Needs
Optimized sta ng requires sta ng levels to be adjusted up and down based on patient needs. Sixty percent of the finance executives surveyed said that flexing sta¦ was a challenge for their organization.
The challenge often starts when sta ng plans are developed based on a static budget. While the budget may provide an accurate overview of patient needs averaged over a period of time, it often does not account for the daily and shift-by-shift variances in patient census and acuity levels. That can lead to instances of understa ng, which can jeopardize the quality of care, and instances of overstaffing, which leads to unnecessary labor costs.
Technology can be utilized to address the challenge of sta¦ flexing in three ways.
1 – Provide Visibility into Flexing Needs
Real-time transparency into patient demands compared to actual sta ng levels provides visibility into instances of under- and oversta ng in time for adjustments to be made.
A CFO at a health system on the East Coast shares how they have leveraged technology to make staff flexing easier, “Our staffing dashboard pulls in census and acuity numbers, as well as other volume metrics such as number of lab tests, and then applies the staff ng plan. Because we’re comparing actuals, our unit managers and staff ng office can easily see if we’re under- or overstaffed and make the necessary adjustments.”
2 – Make Flexing Easier
Another way to address the challenge of flexing
staff up and down is to make flexing easier.
The senior vice president and system nurse executive at a large health system in the Carolinas explains how they’ve used technology to operationalize their strategy to make flexing easier for staff and schedulers. “Since moving all of our disparate float pool nurses into a single centralized regional pool we have seen a really good rate of adoption. The staffing and scheduling technology we use to manage regional float pool teammate deployment has enabled us to more effectively utilize our own resources instead of looking at contract labor or incentive pay to fill open shifts, and we are better equipped to support flexing census numbers. Skill optimization, improved engagement, and more effective deployment of resources are di cult without visibility into the workforce and implementation of consistent staffing and scheduling policies across the enterprise. Accomplishing all of these goals was next to impossible with a pen and piece of paper.”
This health system has linked their staffing strategies to their corporate imperatives. Their nursing executive says, “Effective staffing that includes skill optimization and complete visibility across the enterprise is fundamental to achieving downstream corporate goals. For an organization as large as ours, open communication, transparency, and the strategic deployment of teammates across the enterprise play a significant role in achieving clinical and financial goals.”
3 – Improve Scheduling Accuracy, Less Need for Flexing
The third way to address the challenge of staff flexing is to develop a more accurate schedule that requires less flexing. When schedule development is based on historical trends and predictive staffing analytics, it leads to a schedule that is much more accurate than a static schedule based solely on the budget.
A vice president of finance and CFO at a regional health system in the South explains their strategy, “With the creation of labor analytics dashboards, our executives have a real-time view of productivity so that real-time adjustments can be made based on actual volumes. We can also spot departmental trends and staffing patterns so it’s easy to see if departments are on track with meeting quality standards as well as predict future staffing needs based upon past history.”
Managing Overtime and Premium Labor Costs
Nearly every health system has taken steps to reduce overtime and other premium labor costs. However, even many of those that have already made some positive changes can drive more cost containment by taking a closer look at these areas:
1 – Use the Data to Proactively Pinpoint Projected Overtime
Building overtime reduction strategies that rely on historical data are incomplete at best. Instead, focusing on analytics that synthesize both scheduling and time/attendance data enables managers and schedulers to view projected overtime and make proactive adjustments to avoid the overtime. With clear visibility into scheduled hours and hours already worked, overtime can be corrected before it happens.
The VP of HR at a 3,500-employee health system in the Northeast explains the power of data transparency: “Having the capability and flexibility of adjusting and redeploying workforce is invaluable. Real-time data allows managers to make decisions at any given moment on who works, where each person will work, and if there is a need for redeployment, of which could quickly have an impact on scheduling and overtime.”
2 – Focus on Incidental Overtime
Incidental overtime is a block of overtime that is less than an hour in length and usually happens when an employee clocks in a few minutes early, stays a few minutes late or misses their lunch break. Also called incremental or creeping overtime, the cost of incidental overtime is anything but incidental. After analyzing the overtime data of health systems across the country, the Workforce Management team at symplr has found that incidental overtime typically accounts for 5-10% of overtime costs.
Since these blocks of overtime can often be eliminated by creating awareness and using some simple training initiatives, they can be a perfect target for quick-win labor cost reductions.
Here’s an example shared by a regional health system in the Midwest. The organization had nearly 900 instances of staff missing their lunch break during each two-week pay period. After taking a closer look at the data and realizing that many of these missed lunches were an unnecessary expense that was not delivering value to the patients, the chief operating officer asked the management team to better manage lunch breaks. Within one month, they dropped the number of missed lunches by 35%, saving the organization over $4,700 each pay period and nearly $125,000 annually – with potential savings over $185,000 annually if those missed lunches were pushing the employees into overtime.
Leveraging Staff Enterprise-Wide
Staffing in silos often leads to missed opportunities in other parts of the organization. As the senior vice president and system nurse executive at the health system in the Carolinas explains, “If one hospital had three or four critical care nurses out sick, they may desperately need critical care nurses, even spending huge dollars in premium labor and staffing incentives to get those shifts covered when, ten miles down the road [at another facility], we might be sending people home because we didn’t have enough patients. Being able to pull resources from other units or locations is a tremendous benefit.”
When health systems use standardized staffing practices and technology across the enterprise, they are empowered to use more sophisticated staffing strategies that enable them to leverage their staff enterprise-wide. Those strategies become even more powerful when managers and staff work collaboratively to fill open shifts. Some examples of these strategies include:
Staffing Productivity as a Lagging Measure vs. Proactive
For many health systems, productivity is analyzed at the end of the pay period. However, when productivity is a lagging measure, making adjustments is like aiming at a moving target; you’re using historical data to make future decisions, which means the accuracy of those decisions is hit-or-miss.
There is a better way to manage productivity. As a CFO on the East Coast sums up, “Productivity shouldn’t be after the pay period. Now, technology can deliver proactive productivity analysis as a function of integration between time and attendance and staffing and scheduling.”
The vice president of finance and CFO at the regional hospital in the South explains how they’ve put software solutions to work for their organization: “Our labor analytics technology gives us the ability to look at the data as it’s happening within the pay period and then make corrections proactively so that we can get the results we’re hoping to achieve. Instead of using a rearview mirror approach where you look at outcomes days or even weeks after the pay period has ended, our managers can affect the outcome of the pay period before it ends.”
Work schedules and staffing policies can have an enormous impact on staff satisfaction. Creating schedules and making staffing adjustments needs to be a delicate balance between meeting patient needs, managing labor costs and engaging staff.
“You can increase nurse satisfaction by giving them a say in what’s happening with their schedule, within the staffing guidelines and rules you put together for your units and for your departments. The more that you can keep them informed about their schedule in advance, the more satisfied they are,” explains a vice president of nursing/CNO at a 5,800-employee health system in the Southeast.
Many organizations are using technology to empower staff with more control over when and where they work. With a system of checks and balances that allows employees to see the shifts they’re qualified to work based on criteria such as skill sets, credentials, whether or not the employee is working up to their committed hours and if they’re approaching overtime, health systems are engaging staff in the staffing and scheduling process, giving them much more control over their own work/life balance.
As the director of patient care services at a 651-bed teaching hospital on the East Coast shares, “For me, it’s about effective communication. We put all of the open shift information out there so that all of our employees have equal access to it. They can self-direct their activity, provided they meet the credentialing and training standards that are set for them. It’s really about allowing them visibility and a voice in their schedule.”
Finding the Data Gaps
Successful workforce management strategies are predicated on having and using the right data. The CFO at the large health system in the Southeast explains what they’re looking for with their workforce management initiatives: “Success is leadership having the updated information to plan and meet the needs of the volumes and growth for our organization.”
The CFO at the rural Midwest health system has a similar view of success, saying, “We are looking for accurate reporting and benchmarking based on historical department performance.”
However, accessing and using the right workforce management data is still a challenge for many of the health systems surveyed. For example, while many organizations are using real-time census data for staffing decisions, only one-quarter are using real-time acuity information. There are also large gaps in using staff skill and competency data, patient information from the Electronic Health Record, and information about the cost of the staff, all critical data components that can improve outcomes when used for making staffing decisions.
A successful workforce management strategy accounts for people, processes and technology, with a focus on providing the right people with access to the right information at the right time. Traditionally, health systems have struggled to achieve balanced outcomes in all five key areas: clinical, financial, staff engagement, patient experience and compliance. Often, attention will be focused on just one or two areas, resulting in no results or even negative results in other areas. That unbalanced approach is no longer sustainable. To survive and thrive in today’s environment, health systems need to master a workforce management strategy that consistently delivers balanced outcomes.
This strategy is built on a foundation of integrated solutions that pull together patient, staff and operational data for staffing optimization. With this strategy, managers, executives and staff all have the information they need to overcome the biggest workforce management challenges, including flexing staff up and down, managing labor costs, leveraging staff enterprise-wide, improving productivity and keeping staff engaged and satisfied.
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