Staffing budgets: It’s not just FTEs

By Gennie Justus and Joyce Siegele
Northside Hospital, Atlanta, Ga.

Most hospitals spend an enormous amount of time trying to determine how many FTEs will be needed for each department for each new budget year. Productivity management (PM) or decision support departments often start planning staffing budgets nine months before the beginning of their new fiscal year. But what is it that ties these FTE budgets to the real employees who are working in the departments? Is there a relationship between the projections and the individual job classes or the number of assigned employees? At Northside Hospital, our productivity management department had historically labored over our budgeted FTEs, faithfully produced monthly reports that compared our budgeted FTEs to the actual usage per department, talked to managers over and over about their staffing, but inevitably found that something was missing from our equation. We found a major missing link between our staffing budgets, human resources (HR), and our department leadership. There was no process for balancing our budgeted FTEs to the job class codes in our HR system, and there was no communication with the departments regarding exactly how the FTEs were divided into the job class codes.

At Northside the staffing budgets are adjusted each year by looking at the historical volumes of each department, healthcare trends, and planned internal changes. We also rely on comparative data as a benchmarking tool to help us determine how we compare to similar hospitals. We have departments that are “fixed”—where the volume does not determine the work of the staff—but we also have many departments that are “flexible,” with engineered standards based on procedures or charge level data. For the fixed departments the staffing budgets are often determined by department request. For the flexible or variable departments we use volume projections to determine the staffing needs for the new budget year. In addition to projecting the volumes for each department, we also use historical data to project the agency, overtime, call worked, education, and orientation hours. All these factors are considered when our department budgets are completed. Because so many of our departments are flexible, there are often significant changes in the number of FTEs budgeted from year to year. After completing our budgets we distribute them to the department managers, and continue to produce and distribute our productivity reports each month.

Our human resources department maintains a record of budgeted FTEs in their department staffing system. Their system is updated when a position control request has been approved and a position needs to be added or deleted. However, there was not a procedure in place to manage or monitor this process, and there was very little correlation in HR’s records and the actual staff in the departments. This caused problems with employee recruiting and hiring since the information was not accurate. There was not a process in place to determine if PM’s record of FTEs matched HR’s. Time after time, we talked to department managers who had no way of knowing how many budgeted FTEs they had in each of their job class codes, or even the actual number of assigned employees or their job status. We found ourselves asking the question, “How can we expect departments to manage their staffing budgets if they do not have the information they need to do so?” To answer this question, we embarked on a year- long project that would ultimately improve the use of our staffing budgets and productivity reports, as well as improve communication between our department, management, and human resources.

We called our project “Position Control Balancing.” Our goal was to maintain a record of FTEs by job class code that could be tied to our department staffing budget, and then communicated to the individual department leadership. In order to make this project successful, and to ensure the results that we wanted, we had to make sure our HR department was on board. We established a partnership with them and agreed that we would balance our FTE budgets to their department staffing reports with the help of each department manager. The process was painstaking. We created a position control sheet for each department that was linked to the department’s FTE budget. Then, we printed out the department staffing reports from HR’s system for each department and entered all the job class codes, the budgeted and the assigned FTEs into our newly created sheet. Our next step was to set up meetings with each department manager to determine the true number of FTEs for each job class code using their current employees and any vacancies in the department. We also used this time to provide education for our managers regarding the staffing budgets, the monthly flexible productivity reports, and the position control process with human resources. We made the adjustments on the position control sheet in a column titled “Budget Change (FTEs).” Once we had the corrections made, we sent the position control sheets to HR, and they went into their system and corrected each job class code for each department.

We began the project with a rather simplistic idea of what we wanted to accomplish. However, there were complications that we had to address as we went along. We found that not only were the budgeted FTEs incorrect, but the assigned FTEs were also incorrect at times. There were many employees who were assigned to incorrect job class codes. So, we had to work with the managers and HR to complete change of status forms to move the employees to their correct job class code. Then we found that we needed to reconcile all the open employee requisitions for hiring, and assess new requisitions, so that the newly balanced job class codes didn’t become overstaffed. Additionally, we realized that in order for the project to be successful we would need to establish procedures to maintain the balance between the staffing budgets and HR on an on-going basis, as well as establish a method of communicating the information to department leadership. The maintenance of our new system includes a procedure for balancing each department with HR’s system when a position control change takes place, and at the beginning of each fiscal year. It also includes using the system to maintain the open employee requisitions, working closely with HR personnel. The department staffing reports are now sent out to management monthly, along with the productivity reports. This allows managers to monitor their budgeted and assigned FTEs on an ongoing basis.

We have just completed our third staffing budget since we completed our “Position Control Balancing” project. Our position control process today is entirely different than it was four years ago when we began the process. Our staffing budgets are established using the same methods, but now we know exactly how many FTEs are budgeted per job class code allowing us to maintain the balance between our records and human resources department staffing system. Our managers are much more knowledgeable about the FTEs in their departments, and are better equipped to determine staffing decisions. We have been sending out monthly productivity reports for many years that compare the budgeted staffing to the actual staffing, but many of our managers did not previously understand how to interpret these reports, or how to tie them to their budgeted and assigned staff. Our project initiated the communication that has given managers a better understanding of these reports. Managers are now able to use the reports to evaluate their staffing needs, improving their ability to stay on budget each month. Another result of our project is the communication and partnership that was formed with HR. We learned that we can’t operate alone. Staffing is not just about creating department budgets once a year; it is an ongoing process that is shared between our department, human resources, and all hospital leadership. Staffing is about communication, understanding, and teamwork.

About the Authors:
Gennie Justus is a senior management engineer at Northside Hospital in Atlanta. She received her M.B.A. specializing in finance from Kennesaw State University. She is a member of SHS and IIE.

Joyce Siegele is the productivity manager at Northside Hospital in Atlanta. She received her B.S. in industrial engineering and her M.S. in industrial engineering specializing in engineering management from the University of Florida. She is a member of SHS, ACHE, HIMSS, and a senior member of IIE.