Impact of Workforce Flexibility on Operating Costs: Empirical Evidence from Healthcare

ABSTRACT

With increasing nursing shortages, workforce flexibility is frequently used in hospitals. Commonly referred to as “mobility flexibility” or “floating,” this type of workforce flexibility cross-trains and re-deploys nurses to the short-staffed hospital units. Using panel data across three years, we empirically show that mobility flexibility has a U-shaped effect on operating costs. It is very helpful in reducing costs at first. However, beyond an infliction point, the benefit of mobility flexibility diminishes. Managers should encourage limited employee movement outside their units and provide a mechanism to capture the knowledge gained during their re-deployments.

KEYWORDS:

• Health care services
• workforce flexibility
• nursing
• cross-training

Acknowledgments

The authors would like to thank Dr. Luv Sharma for his valuable contributions to this project.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. We are unable to identify the state that is dropped from the final dataset, because of deidentification by ANA associates.