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14.6 STAFFING FORECASTS Staffing forecasts are also inputs into the operating budget. We have addressed staffing computations, costs, and reports in a previous chapter. This section builds upon that information in order to produce a staffing forecast. Thus forecast considerations, components, and assumptions are addressed in this section.

Staffing Forecast Considerations

Staffing forecasts are a very common type of forecast required of managers. Three important considerations when preparing staffing forecasts are discussed here.

Controllable Versus Noncontrollable Expenses

The concept of responsibility centers and controllable versus noncontrollable expenses has been discussed earlier in this book. Essentially, controllable costs are subject to a manager’s own decision making, whereas noncontrollable costs are outside that manager’s power. It is extremely difficult to make staffing forecasts with any degree of accuracy if noncontrollable expenses are included in the manager’s forecast. The organization’s structure must be recognized and taken into account when setting up assumptions for staffing forecasts. Shared services across lines of authority are workable in theory, but often do not work in actuality. Figure 14–3 (http://content.thuzelearning.com/books/Baker.6866.18.1/sections/ch14_sect1_6#ch14_fig3) gives an example of the essential “business units” under the supervision of a director of nurses. Note the responsibility centers and the support centers on this organization chart.

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Figure 14–3 Primary Nursing Staff Classification by Line of Authority. Courtesy of Resource Group, Ltd., Dallas, Texas.

Required Minimum Staff Levels

Regulatory healthcare standards may set minimum staff levels for providing service in a particular unit. These minimum levels cannot be ignored in the forecast process.

Labor Market Issues in Staffing Forecasts

We most often hear about a chronic lack of adequate staff, and certain parts of the country do have a continual shortage of certain qualified professional healthcare staff. Yet other parts of the country can have an overabundance during that same period. The status of the local labor market has a direct impact on staffing forecasts. The impact is in dollars: when there are plenty of staff available, the hourly rate to attract staff may go down, but when there is a shortage of available qualified staff, the hourly rate has to go up. As strange as it may seem, this elemental economic fact is sometimes not taken into account in forecasting assumptions.

Staffing Forecast Components

In many cases a staffing plan is first created, and the staffing forecast follows after the plan is reviewed and refined. Four components are typically required, as follows. Figure 14–4 (http://content.thuzelearning.com/books/Baker.6866.18.1/sections/ch14_sect1_6#ch14_fig4) illustrates the sequence.

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Figure 14–4 Components of the Staffing Forecast.

Scheduling Requirements

Scheduling requirements should encompass all hours and days required to cover each position. For example, see the exhibit in the discussion about staffing (Chapter 10 (http://content.thuzelearning.com/books/Baker.6866.18.1/sections/ch10#ch10) ) that illustrates a single security guard position and the number of units required.

Master Staffing Plan

The master staffing plan should include all units and all hours and days required to cover all positions within the units. For example, see the exhibit in the discussion about staffing that illustrates entire units by shift, covering 24 hours per day times 7 days a week.

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Computation Sequence to Annualize the Master Staffing Plan

The annualizing sequence is as follows. (This sequence is illustrated visually in Figure 14–4 (http://content.thuzelearning.com/books/Baker.6866.18.1/sections/ch14_sect1_6#ch14_fig4) . An example in worksheet form appears in the chapter about staffing.)

■ Compute Productive and Nonproductive Days and Net Paid Days The proportion of productive days (net paid days) versus nonproductive days (paid days not worked) will be based on the organization’s policy as to paying for days not worked. For example, see Step 1 in the Staffing chapter’s exhibit for such a computation, including “Net Paid Days.” (Holidays, sick days, vacation days, and education days composed the “Paid Days Not Worked” in the worksheet example within the Staffing chapter’s exhibit.)

■ Convert Net Paid Days Worked to an Annual Factor The total days in the business year divided by net paid days worked equals a factor. Step 2 in the Staffing chapter’s exhibit illustrates this computation.

■ Calculate the Annual FTEs Using the Factors Finally, use the factor to calculate the FTEs required to fully cover the position’s shifts all year long. For example, in the Staffing chapter’s exhibit, the RN FTE would be 1.6 (1.6106195).

The resulting staffing forecast reflects 24 hour per day 7 days per week annual FTEs to cover all shifts.