Australian Healthcare Industry
Discuss About The Facing HR Professionals Healthcare Industry.
Human resource management is a concept that has gained widespread popularity in the past few decades. Human resource management aims at optimising the performance of the workforce of business organisations by providing the employees with a better work environment and by establishing better employee-employer relations (Hendry, 2012). To achieve its objectives, human resource management relies upon a number of core functions, such as recruitment and selection, performance management, training and development, career development, etc. and non-core functions, such as motivation, attraction and retention, etc.
Due to the spread of globalisation and liberalisation, the business world has become a smaller place and it has become easier for companies to enter into foreign markets and establish relations with others. Business organisations have become vulnerable to a number of micro and macro environment factors, which can undergo changes in real time and can force business organisations to implement changes in the workplace. Such changes in the environment are also having an impact on the management of human resources in almost all business sectors (Bodi, 2017). Health care industry is no exception and is facing a significant number of challenges when it comes to the management of human resources working in the health care sector. Therefore, in this report, we will discuss two major human resource management challenges that the health care centres of Australia are most likely going to experience in the years to come and consider strategies that would be helpful in addressing the challenges.
In a Census conducted by the Australian Bureau of Statistics in 2016, healthcare was found to be the largest industry in Australia. The Australian healthcare industry consists of numerous health care and social assistance sectors, hospitals, aged and child care centres. Healthcare industry employs 12.6% of Australia’s total population. In the last five years alone, the Australian health care industry has grown by 15.7% while the total number of people employed in the industry grew from 1.2 million in 2011 to 1.4 million in 2016 (Business Services , 2018). It has been identified that the ageing population in Australia in combination with an expansion in the private health insurance coverage, the demand for healthcare services is going to get stronger in the years to come (IBIS World, 2018).
Healthcare industry is one of the most important industry in an economy as it not only provides employment but is also necessary for the well-being of the society. For the betterment of the society, it is important that the healthcare industry of a country offers high quality healthcare services to its customers. The changing environment trends are bringing about a significant number of changes in the healthcare industry and are making human resource management difficult for the managers. Two of the most important human resource management issues that the Australian healthcare industry is most likely going to face in the near future are discussed below:
Upcoming Human Resource Management Challenges in Australian Healthcare Industry
The first and the most important challenge that the human resource managers working in the Australian healthcare industry will have to address in the coming years is related with the shortage of healthcare staff. During 2012, the number of hospitals that were experiencing a shortage in the nursing staff was estimated at 4.8 percent while the number jumped up to 32.9% by 2016, which is alarming for human resource managers working in the industry. The Bureau of Labour Statistics has projected that by the end of 2022, there will be a vacancy of almost 1.2 million nursing positions (Bamboohr, 2017). The Australian healthcare industry is not an exception to this human resource management challenge. The government of Australia continuously carries out studies and researches to identify shortage of labour and skills in the Australian Labour Market and the shortage of nursing staff in the Australian healthcare centre has been a major concern for the government in the past few decades. In a report published by Australia’s future health workforce, published in 2014, the department of health forecasted a the shortage of nursing staff in the Australian healthcare industry to reach 85,000 by 2025 and to 123,000 by the end of 2030. According to reports, in the years to come, the Australian health care industry will not be having sufficient number of healthcare professionals to satisfy the healthcare demands of rapidly growing Australian population. The situation is so alarming for the government of the country that nursing has been added to the national list of identified skill shortage and any nursing migrant applying for a temporary work visa in Australia can work in the industry for a period of up to four years (Healthstaffrecruitment, n.d.).
The second major challenge that the Australian healthcare industry is most likely going to experience in the coming years is related with the turnover rates of the employees. In addition to workforce shortages in hospitals, healthcare centres, clinics, etc. the healthcare industry is also struggling to retain its existing workforce or staff members that it already has. Thanks to the ageing baby boomers, the demand for healthcare services is so high in Australia that the nursing employees have so many job openings for them that it has become too easy for them to make a shift in case they are not happy or satisfied with their jobs. In the past six years alone, the turnover rates of registered nursing staff have gone up from 11.2% to 17.2% and these numbers are going to increase even more in the years to come (Bamboohr, 2017). This alarming situation is costing millions to the Australian healthcare centres. It has been discovered that the cost associated with replacing a nursing staff is almost equal to his or her half year salary, which implies that for companies operating in the Australian healthcare industry, it will cost them around $5M to compensate for the labour turnover rates.
Shortage of Nursing Staff
The problem of increasing labour turnover rates is becoming worse because of the inability of Australian healthcare companies to invest heavily in the planning of their human resources. Human resource planning is a concept that allows business organisations to forecast workforce demand and supply patterns for their subsidiaries based on information and data available from the past as well as from the present (HRO, 2016). By conducting careful research and studies, human resource managers are able to accurately forecast the human resource demand that their company is most likely going to experience in the coming years and can consequently think of strategies to fulfil the demand and to avoid staff shortage. The process of human resource planning involves heavy investment and a lot of time, which most of the Australian healthcare industries are not able to manage.
Therefore, these two issues are the two biggest challenges that the Australian healthcare industry has started facing right now and the situation will continue to become worse if it is not properly dealt with.
Strategic human resource management, also known as SHRM, is a new concept that aims at strategically aligning the human resource practices of a company with its goals and objectives, in order to achieve the best possible results. Strategic human resource management has gained a lot of importance because it is aimed at developing human resource managerial strategies for a longer run, which can allow business organisations to optimise their workforce performance levels.
One of the most commonly used models in strategic human resource management is the Harvard map of human resource management. According to this model, employees are an important resource for business organisations but are fundamentally different from other resources, which makes it crucial that they are managed in a totally different manner. In this model, there are four human resource policy areas that require the focus of human resource managers, which are:
- Human resource flows à recruitment, selection, appraisal, promotion, termination, etc.
- Reward systems à compensation and benefits, motivation, pay, etc.
- Employee influence à authority, empowerment, responsibility, etc.
- Work systems à definition of work, design of work, alignment of people, etc.
With proper human resource management practices and policies (mentioned above), it can become easier for the managers to achieve the four C’s or commitment, congruence, competence and cost effectiveness, which all are some of the most essential elements for achieving organisational success (Price, n.d.).
Using this model to assess the situation of Australian healthcare industry, it can be seen that the industry is most likely experiencing issues in the first stage itself. The issue of staff shortage and high labour turnover ratios are related to human resource flows and will definitely make it difficult for the organisations to achieve the four C’s that are necessary for achieving organisational success. Therefore, there is a high probability that most of the Australian healthcare companies will lose the competition in the market and will have to experience failure because of the ongoing human resource management issues.
Rising Labour Turnover Rates
From the above information, it can be clearly stated that shortage of nursing staff and the ever increasing employee turnover ratios will become a major issue in the Australian healthcare industry. Therefore, it is important for the human resource managers working in the Australian healthcare industry to come up with certain strategies that would enable them to deal with such issues. Some of such strategies are discussed below:
First of all, human resource planning or workforce planning should be treated as the need of the hour by Australian healthcare managers. Human resource or workforce planning will allow them in forecasting the workforce demand of their subsidiaries by taking past and present workforce data into account. Workforce planning will allow them to identify vacancies that the organisation is most likely going to experience in the years to come and prepare plans to fulfil the vacancies identified (Rose & Rensburg-Bonthuyzen, 2015). By investing time and resources in workforce planning, Australian healthcare industries will be able to reduce situations of surplus workforce or shortage of workforce.
Secondly, Australian healthcare companies will have to strive hard to attract fresh and talented tool of employees in the market by establishing a better image as an employer. Human resource managers need to make their recruitment and selection programs more efficient. One of the best strategies to attract a greater pool of talent is to avoid ‘Purple Squirrel’ Syndrome (Forbes Coaches Council , 2016). Purple Squirrel Syndrome is a condition when the employers end up advertising their jobs as unrealistic by adding too many job roles and responsibilities. Such actions can make it difficult for healthcare companies to attract a larger pool of talent, which can lead to shortage of staff in the workplace.
Thirdly, using a referral based system can also help Australian healthcare organisations in dealing with issues related to staff shortages. Referral system is one of the most reliable strategy that can help in attracting a greater pool of talented employees in industries where there is labour shortage. Another benefit of a referral system is that it is less time consuming and can assist business organisations in recruiting talented and experienced employees from the industry (Naylornetwork, 2011). To promote referral system in the organisation, Australian healthcare industries can offer rewards to those employees who will be able to assist the managers in recruiting employees by referring candidates.
Fourthly, to deal with high labour turnover ratios in the healthcare industry, the human resource managers working in the Australian healthcare centres will have to strengthen their recruitment and selection process and carefully screen the candidates who apply for vacant job positions. The human resource managers should be efficient enough to recognize the right candidate for the right job and assess his tendency to quit his or her existing company in exchange for a higher salary or benefit package. Such a strategy would help human resource managers in recruiting the right people who will show a greater commitment towards their organisation.
SHRM Models (Harvard Map of HRM)
Fifthly, onboarding should be given a lot of importance by human resource managers working in the Australian healthcare industry, Onboarding is a process that involves integration of new employees in the workplace by making them undergo training and development program, also known as an initial orientation program. It has been found that a well-planned onboarding program can help business organisations in converting their new recruits to dedicated employees in the workplace.
Sixthly, human resource managers working in the Australian healthcare industry will have to work harder to make work conditions better for the nursing staff. The human resource managers can conduct regular survey and interviews to assess employee grievances and take necessary actions to deal with their problems. They can also make arrangements for certain on-the-job welfare activities for the nursing staff because in the nursing profession, there is constant pressure on the employees and welfare activities can help them in reducing their stress levels. Such strategies will make the employees feel that their organisation values them and they are more likely to become committed to their organisations, which will be helpful in bringing down the turnover rates.
Lastly, employee engagement should be the priority of human resource managers working in the Australian healthcare industry. As healthcare organisations are required to operate 24 hours a day, it is important for human resource managers to ensure employee engagement throughout these 24 hours and not just be focused on engagement during the daylight hours. The managers of healthcare organisations should foster a positive culture in the workplace and make the employees feel that the health of their patients is of an utmost value to their employer. The organisations should further ensure that the work for the nursing staff should be interesting and not a burden (Warren, n.d.). They should be given an opportunity to balance their personal lives and work lives so that they can stay away from stress and are completely indulge in their work while at their jobs. Implementing such strategies can help healthcare organisations to ensure employee engagement at all levels of an organisation, which will help them in dealing with high labour turnover ratios.
Conclusion
The changing market trends in the healthcare sector will have a huge impact on the Australian healthcare industry. Staff shortages and high turnover ratios are two issues which will have some serious implications for the Australian healthcare industry if they are not properly dealt with and will make it difficult for a large number of healthcare organisations to offer quality healthcare services to their patients.
Therefore, it is important for human resource managers operating in the Australian healthcare industry to look into the issues discussed above and come up with suitable strategies to deal with such issues.
References
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[Accessed 6 May 2018].
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Forbes Coaches Council , 2016. 11 Strategies Companies Can Use To Overcome The Talent Shortage. [Online] Available at: https://www.forbes.com/sites/forbescoachescouncil/2016/08/15/11-strategies-companies-can-use-to-overcome-the-talent-shortage/#787831e35ca7[Accessed 6 May 2018].
Naylornetwork, 2011. ATTRACTING, ONBOARDING AND RETAINING EMPLOYEES WITHIN THE HEALTH CARE INDUSTRY. [Online] Available at: https://www.naylornetwork.com/ahh-nwl/articles/index-v2.asp?aid=134767&issueID=22500
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Rose, A. & Rensburg-Bonthuyzen, E. J. v., 2015. The factors that attract healthcare professionals to and retain them in rural areas in South Africa. South African Family Practice, 57(1), pp. 44-49.
Warren, B., n.d. Seven Steps to Improving Employee Retention in Healthcare. [Online]
Available at: https://www.selectinternational.com/healthcare-hiring-blog/seven-steps-to-improving-employee-retention-in-healthcare[Accessed 6 May 2018].
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