Change is occurring at a rapid pace in the healthcare industry: Hospitals are merging, large medical groups are forming, and clinically integrated networks and integrated delivery networks are acquiring hospitals and physicians. As a result, leaders are involved in due diligence and transitional processes that address corporate structures, employee benefits, insurance policies, financials, hard assets, and facilities, just to name a few. But these processes often miss a key area.
These business transactions also have a direct effect on the most valuable asset any healthcare organization has: its employees. Although the human side of these transactions is seldom talked about, failing to address employee issues can be expensive in both cost and reputation.
Average turnover costs range from $37,700 to $58,400 for a nurse and $274,000 to $498,000 per physician, for example—and that doesn’t account for the toll that low morale, decreased productivity, and workplace drama can take on an organization. Leaders should consider the human side during the transition process and develop a plan to anticipate and address this period of change. A quote often attributed to Charles Darwin states, “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”
The Human Side of Change
Most people ask themselves three main questions when experiencing a transition at work:
- Am I going to have a job?
- What is changing that will affect my position?
- What’s in it for me?
Leaders must place themselves in their employees’ shoes and be prepared to answer these questions in an open, honest, and direct manner. Britt Andreatta, PhD, author of Wired to Resist: The Brain Science of Why Change Fails and a New Model for Driving Success, writes that about 50 percent to 70 percent of change initiatives fail because we are biologically wired to resist change. As a result, organizations have lost billions of dollars. Furthermore, she notes, a change journey is different for each person and can elicit a variety of emotions and reactions.
Unlike some changes, employees typically would not choose to experience the kind of workplace transition that occurs during a merger; hence the change journey causes disruption and can be peppered with resistance. Employers must anticipate this journey and take steps to address the emotions of fear, confusion, frustration, and resignation that may arise and to help employees understand and ultimately accept the “new normal.”
For example, when word of a potential merger leaks, your employees may have one of three reactions:
- They’re excited about the news and the possibilities associated with change.
- They’re indifferent and keep plugging along.
- They’re anxious and have many questions.
The majority of your employees will be in the third category because they may instinctively feel their safety is being threatened, and as a result, they will act out what are referred to in a change management context as “derailing” behaviors. These may include looking for new positions, exhibiting a decline in productivity, gossiping about sensitive office issues, and—most concerning—contributing to a compromised patient experience and plummeting patient satisfaction scores.
These behaviors in turn lead to increased stress levels in the workplace, which can affect morale and even employees’ health and well-being. Even with the most positive of intentions, one mention of the word “change” can send employees running for the exits, turning your upcoming transition into an expensive nightmare—or even a failure.
This article originally appeared in the September 2018 issue of HFMA’s Leadership e-newsletter. Read the remainder of the article here.
Lucy Zielinski is managing partner for Lumina Health Partners.