D'Arcy Gue

IT Outsourcing and Staffing Strategies to Address the Staffing Shortage

June 25, 2014

IT Outsourcing 6 Minute Read

As we’ve discussed in recent posts, the shortage of qualified healthcare IT staff is causing significant issues in American hospitals and vendors alike. In last week’s post, we discussed strategies for developing your own staff members to fill critical vacancies. This week, I want to take a look at the opposite strategy – using outside resources to augment your project team.

Why Hospitals Might Need External Resources

Outside firms have been in existence to help hospitals meet their staffing and expertise needs almost as long as there have been hospitals. There are a number of reasons why a hospital may choose to use an outside firm:

it outsourcingLack of Hiring Expertise
Recently, we pointed to an analysis by Dr. William Hersh, MD which suggests that staffing ratios of one IT FTE to 50 – 60 non-IT FTEs is appropriate. Because the number of IT staff is so much lower that other staff, your HR team undoubtedly has less experience identifying and attracting skilled IT candidates than they have attracting skilled clinical ones.

Inability to Attract the Quality Resources
There are some hospitals who cannot attract the needed staff, often because of their location – not all highly skilled IT professionals want to live in Smalltown, USA, and work at a critical access facility where they will be expected to wear many hats as part of a small staff.

Many times, a hospital will realize in the middle of an implementation project that they require more staff to meet their project deadlines. In a hospital where positions must be approved and posted internally before they can be posted externally, a new hire can take 8 – 12 weeks. Often tight schedules don’t permit the position to remain open that long, so the hospital will reach out to a staffing or consulting firm for an immediate resource. The same logic that a position can’t remain open for months is also the reason that many consulting firms, Phoenix Health Systems included, provide interim leadership services – hiring an interim CIO for six months gives the hospital time to recruit a quality replacement that’s right for the organization.

Temporary Needs
Finally, many hospitals have staffing and expertise needs that aren’t permanent. An organization might need to cover for a staff member out of FMLA. need extra help on an installation team for a new system. or demand temporary staff for Initiatives like Meaningful Use / MIPS or ICD-10.

Working With Outside Vendors

In order to make the most of your outside staff, it is necessary to understand the strengths and weaknesses of each of the external staffing options.

Staff Augmentation
Staff augmentation is normally provided on a time and materials basis. The staffing firm provides a resource experienced in your needs for $x,000 a month + travel. The greatest strength of a staff augmentation contract is speed to execution. Staffing firms can often have resumes of available candidates in front of you within days of your request. Since the staffing firms generally only present candidates who are immediately available, you can often have the candidate interviewed and working in a couple weeks from requesting the resource.

Generally, these staff augmentation team members have the look and feel of employees — you assign them specific tasks as the project progresses, and monitor their progress just like you would an employee of your own. These staffers have the same incentives your employees do — they want to do a good job, get a good recommendation from you, and perhaps have their contract extended. However, they (and their staffing firm) generally have no direct financial incentive for performance of specific tasks.

To get the most out of your staff augmentation resources, insist on one or more interviews with potential resources and evaluate each in the same way you’d evaluate your own hires, both for technical competency and for fit with your existing team. Because these resources are not your employees, it is significantly easier to replace someone who isn’t a good fit, and you shouldn’t hesitate to do so. Make sure before you start, that it’s clear in your contract with the staffing firm how to proceed if the staffer turns out to be someone you’d like to arrange a long-term contract with.

One particular type of staff augmentation is the temporary-to-permanent hire. You bring on the staff member as a contractor for a set period of time, with the understanding that you will offer them a position if they work out. This provides the benefit of letting you “audition” candidates for several months before making the hiring decision.

Consulting services may be provided on a time and materials basis or as a fixed fee. Whichever reimbursement methodology is chosen, consultants are typically brought on board with specific deliverable goals in mind. The greatest strength of the consulting solution is expertise. Consulting resources are typically among the most experienced resources that you can identify – it’s often possible to find consulting firms who have performed exactly the same kind of work you require, and usually more than once.

Consultants, particularly where a fixed-fee contract or a performance bonus is involved, have a direct financial incentive to perform the work accurately and swiftly. Typically, you have less control over a consultant’s daily activities, and staffing, hiring, and management responsibilities fall on the consulting firm you’ve hired.

To get the most out of a consulting engagement, take the time to clearly define the objectives you want the consultant to perform. If the scope isn’t clear, it is possible to begin an engagement as a time and materials assessment, and clarify the scope for the balance of the work with an amendment later in the project.

Finally, recognize that a consulting partner may have a higher hourly rate, but what’s really important is the value delivered. A consultant who has completed the task before, knows both the potential pitfalls and the ways to leverage your investment in the project to bring the highest value to the organization. Consultants come with a developed methodology and toolset that is often far more efficient that other resources, and the total value proposition can be high.

The third way to fill your staffing needs is to outsource critical IT functions to a third party, thus making the talent shortage the outsourcer’s problem. Hospitals may choose to outsource needs such as a CIO, a single desktop support or service desk, or even consider a total outsourcing. There are many ways to structure an outsourcing contract, including fixed fee, time, and materials. Per-use fees are also popular, particularly in service desk outsourcings, where the organization could be charged $x per call.

The key to realizing maximum value from an outsourcing engagement surrounds service levels. By clearly defining expectations, such as how quickly a service desk call will be answered or how swiftly a PC will be moved after a request is made, the outsourcer is held to specific standards of performance with financial penalties for poor performance.

Making the Decision
The one thing all of these options have in common is that they appear to be more expensive than hiring employees to do the same task. In the consulting and outsourcing environments, it’s very possible that the overall value that you obtain from the higher costs to be worth it, and will likely save you money down the road. Your consulting or outsourcing partner should be able and willing to clearly lay out the business case for any work they are hired to do.

If you’re seeking external assistance, consider Phoenix. Details about our services can be found here. If you’re not sure where to start, contact us. We’re happy to assess your needs and provide a recommendation.

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