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08 June 2022
9 min read

NHS Staff Retention Review: Costs & Impacts

Matt Farrah
Nurses.co.uk Founder

Richard Gill

Mat Martin

Ben Gordon

Aubrey Hollebon

Janet Dalton

Laura Bosworth

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NHS Staff Turnover Costs

• £12,000 = the cost of replacing a fully-trained Nurse (NHS)

• £3.6 million = spent each year by each Trust to replace Nurses (NHS)

• £21.7 billion = cost to NHS of not addressing retention (MSI / HWF)

• £6,371.41 = cost of recruiting a Nurse from overseas (NHS)

• £8,477.80 = cost of recruiting 21 Staff Nurses (NHS)

• £100,000 = cost of an agency Nurse each year (BBC)

• £6.2 billion = cost of agency and bank staff 2019-20 (Liason)

• £12 million = paid in 1 year by the five NI Trusts to one agency (BBC)

• £46 = the difference cited in hourly pay between one agency Nurse and an NHS Nurse on the same ward (BBC)

• £1.7 million = cost of sickness absence for an average Trust each year (MSI / HWF)

• £2.4 billion = cost per year to NHS of staff absence due to poor health (NHS)

• £1.9 billion = how much the NHS spent on locums in 3 months 2015 (BBC)

Find out about our Nurses.co.uk Academy and how we are helping the NHS increase retention.

Staffing is one of the NHS’ primary concerns. The overall NHS staff shortage is put at 110,000 posts unfilled, including 40,000 nursing vacancies. It causes Nurses' own health to be impacted, and is a major cause of staff turnover, exacerbating the problem.

Recruitment is one side of the coin, retention the other.

Recruitment can't solve the crisis, despite various Government pledges about hiring tens of thousands of Nurses.

To truly understand and articulate why retention is such an enormous issue for our healthcare system, we have to recognise the cost of getting it wrong.

So, what are the practical costs of poor retention rates?

What are the knock-on effects?

And ultimately, why is retention something that warrants far more attention, and more investment?

This piece aims to highlight the varied and complex cost of failing to retain NHS staff, and especially its nursing staff.

NHS Staff Turnover Numbers

• 10-12% = typical turnover rate of Nurses at a large acute Trust (NHS)

• 400 = number of staff the NHS loses each week (Guardian)

• 300 = number of Nurses average Trust must recruit each year (NHS)

• 110,000 = NHS posts unfilled (Guardian)

• 1 in 10 = NHS nursing roles unfilled (39,652) (Guardian)

• 25,219 = Nurses who left the register in year to March 2022 (NMC)

• 1.4 million = NHS days lost in April 2019 due to absence (Kingsfund)

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How Much Does Losing Staff Cost The NHS?

Putting an exact figure on the cost of staff turnover is difficult.

We know the numbers. The Guardian put the number of people leaving the NHS at 400 per week. The NHS SBS put the turnover rate of Nurses at a typical Trust at 12%. The NMC's figures for May 2022 showed a 13% increase in the number of Nurses leaving the register in the last year over the previous year (25,219).

annual turnover of nursing staff at a typical nhs trust

(And the numbers can't be put down to the pandemic. A Nuffield Trust report explained its figures were roughly the same as pre-pandemic levels, and that Covid only accounts for 14% of the Nurses who left the profession.)

So, the evidence is clear: the number of NHS staff leaving (including Nurses) is high.

But, what is the cost?

Estimating the total financial cost is very challenging. That’s primarily because an employee’s value is complex – as is the cost of replacing them.

Then there’s the well-publicised cost of interim bank or agency staff to cover for the loss.

From 2015, following some eye-watering headlines about the revenues of agencies supplying Nurses to the NHS, action was taken (leading in no small part to the creation of The NHS People Plan).

Reports in The Telegraph at that time estimated billions in revenue each year were paid to nursing agencies to supply NHS-trained staff back to itself.

The following is a quote from the BBC at the time:

The latest figures show NHS trusts in England spent £1.9bn on locum staff in just three months this summer.

The financial figures were shocking and measures were immediately introduced by the Government to curb the spend.

By 2018 the NHS had managed to cut spend on agencies by £1.2bn.

But beyond that, there are what could be termed secondary costs. These could include an initial deficit in terms of productivity while a new person gets accustomed to a new role, or increased absence of colleagues who become overstretched and overworked.

We can consider all of these factors – all of which deserve attention.

But in terms of a broad, overall cost, a report by the Modern Society Initiative and the Healthcare Workers’ Foundation (MSI / HWF) has attempted to find one.

The report suggests that NHS staff retention rates are dropping, and that the cost of not addressing this issue will be £21.7 billion.

This calculation is approximate of course, based on training costs and likely recruitment challenges in the coming years.

But it’s a useful indicator of just how enormous this issue is.

How Much Does It Cost To Train And Recruit NHS Nurses?

To break this issue down, it’s useful to analyse some of the specific costs related to the retention challenge.

A report published in NHS SBS puts the cost of replacing a fully-trained nurse at £12,000. And, as it points out, with nursing turnover of up to 12%, the costs soon rack up:

A large acute NHS trust with over 3,000 nurses, for example, will typically have a turnover rate of between 10-12%. This means needing to recruit more than 300 new nurses on an annual basis. With the total financial impact of replacing a fully-trained nurse estimated to be anything up to £12k, this equates to a minimum spend of £3.6m every year.

That doesn’t include the initial recruitment costs – the price of actually finding and attracting prospective nursing staff to train in the first place.

A case study for Hillingdon Hospitals’ NHS Foundation Trust found that it cost £8,477.80 to recruit 21 UK Nurses, and £6,371.41 to hire 1 Nurse from overseas.

Again, multiply this figure by thousands, and you get a realistic sense of the scale of the cost of recruiting to replace leavers. Especially when you consider that almost half of the new Nurses on the NMC register have joined from overseas (in the report above, the cost can exceed 10 times that of recruiting a UK Nurse).

How Much Does An Agency Nurse Cost?

Agency spending has been improved over recent years by the agency cap. However, the dependence on interim staff hasn’t gone away.

A BBC study in 2017 found that the cost of an agency Nurse to an NHS trust could easily reach £100,000 a year.

In 2018, the BBC also reported that Northern Ireland's five Trusts spent £12m with just one agency hiring staff.

And the most recent comprehensive summary of agency and bank spending across the NHS found that the cost for all staff reached £6.2 billion for 2019-20.

How Much Does Absence Cost The NHS?

The link between staff retention and staff absence has been made very clear in recent years within the NHS.

Staff absence is often a very clear indicator of someone who may leave their role (increased risk of leaving the NHS). And especially during the pandemic, the impact of under-staffing on absence has been undeniable.

But even prior to Covid 19, staff absence in the NHS was high: "Sickness absence rates in the NHS are higher than in the rest of the economy. NHS staff sickness rates rose from 3.8 per cent in April 2018 to 4.1 per cent in April 2019. This is the highest level at that time of year in more than a decade, and represents more than 1.4 million full-time equivalent (FTE) days lost in that month alone." (Kingsfund.org, 2019)

The NHS lost more than 1.4 million full-time equivalent (FTE) days in April 2019 due to sickness absence

And in August 2021, Nursing Times discovered that there had been a 37% increase in mental health related absences.

And the Government is taking the issue so seriously that the House of Commons Health and Social Care Committee has held reviews into the impact of burnout and resilience in the NHS.

But what does the absence of an NHS worker actually cost the NHS?

Well, we can refer to the interim costs mentioned above.

Needless to say, an interim worker costs far more than a full-time employee across an entire year.

But more broadly, the NHS itself has released data that suggests the cost of staff absence to the NHS is around £2.4 billion a year, with a cost of £1.7m due to sickness absence for an average Trust.

Once more, this aspect of the retention challenge represents a significant cost to the NHS.

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The Costs That Can’t Be Easily Quantified

The costs outlined above should be enough to convince anyone that retaining staff is of paramount importance.

But there are deeper and more complex impacts, too.

Any organisation knows that unhappy staff are a problem.

They can be a de-motivating force, damaging multi-disciplinary teams that are so vital to providing quality care.

In a BBC report on nursing agency pay the disparity between an employed Staff Nurse and an agency Nurse doing the same job was shocking:

We heard today from a nurse who was working for £14 an hour alongside another nurse doing the same work for £60 an hour through an agency.

And then there’s the damage that high turnover does to team and organisational performance.

Any company in any sector knows the inherent value of a team full of experience – teams with staff who know the idiosyncrasies of that place of work inside out.

How do you measure the cost of damaging that? It’s probably not possible to do so – but that doesn’t mean that the cost isn’t significant.

The Cost Of Poor Retention Rates Can Spiral Quickly

In summary, high staff turnover does untold damage to NHS Trusts – and the subsequent impacts and costs are enormous.

From the agency bills and resulting spikes in absence to the damage caused to productivity, the visible and invisible costs can spiral rapidly.

As an industry, we talk frequently about the need to recruit better.

It’s time for Trusts to retain better too.

How Can The NHS Increase Retention?

There isn't one silver bullet to fix retention because the reasons people leave are varied. Let's end by looking at a Nuffield Trust report from March 2022 that lists the main reasons given by Nurses, Midwives and Nursing Associates for leaving the NHS:

• Work-life balance (quadrupled in last decade)

• Wellbeing (quadrupled in last decade)

• Lack of career development (doubled in last decade)

• Lack of reward (quadrupled in last decade)

• Unfair treatment (discrimination, bullying, harassment)

• Low levels of staffing

• Pressure and stress

• Covid (14%)

• Undervalued (recognised and valued)

• Unable to provide acceptable level of care

• Burn-out

(Retirement was given too, but the underlying reason for early retirement can be any from the above list.)

We are helping the NHS and other organisations to increase retention - find out more about The Nurses.co.uk Academy.

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About this contributor

Matt Farrah
Nurses.co.uk Founder

I believe people working in healthcare should be able to choose to enjoy work. That is, choose an employer who reflects their values and provides them with a sustainable career. This leads to better patient care, higher retention rates and happier working lives in this most important employment sector.

More by this contributor

Richard Gill

Mat Martin

Ben Gordon

Aubrey Hollebon

Janet Dalton

Laura Bosworth

6
6
26864

Want to get involved in the discussion?

- 2 years ago
  
  Jane Bullard
- Jane Bullard
  2 years ago
  Interesting article and well written! We need to understand what our workforce of the future are looking for - if ... read more
  
  Interesting article and well written! We need to understand what our workforce of the future are looking for - if we keep offering the same we will carry on getting the same results!
  read less
  - 1
  - Post a reply
  - Thanks! I agree. It's nuanced and complicated. So guesswork or just pinning the blame on pay won't work.
    
    Replied by: Matt Farrah
- 2 years ago
  
  Marinica Mihaela Froicu
- Marinica Mihaela Froicu
  2 years ago
  Thank you Matt , I don't think hiring abroad is an impediment! We are all free to choose where we practice ... read more
  
  Thank you Matt , I don't think hiring abroad is an impediment! We are all free to choose where we practice our profession, the important thing is to practice it professionally, to respect and be respected for what we do! There is no employee and no employer! There is only collaboration! Someone needs your services for which you have qualified and make them available for a fee because the life is expensive! If the NHS needs qualified doctors and nurses, then recognize them, respect their work by paying reasonable salaries for their responsibility! NHS needs professionalism! He wouldn't have that if he didn't pay you enough for it! Medical professionalism does not come from a certain country, it comes from each of us who treat with respect the work for which we dedicate ourselves! The NHS should recognize this every time it recruits people for healthcare!
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  - I agree, it's not an impediment to good healthcare outcomes or patient care. I'm not talking about the quality of skills or care. I'm talking about migration of skills over investing in the workforce ... read more
    
    I agree, it's not an impediment to good healthcare outcomes or patient care. I'm not talking about the quality of skills or care. I'm talking about migration of skills over investing in the workforce from the ground up. I personally don't feel plugging the gap in the workforce by importing skills is a long-term solution. A long-term solution is investing in developing skills and talent within the UK(supporting training of Nurses through bursaries etc)and also in spending to retain the existing nursing workforce. There is an argument to say that hiring the best talent from developing nations is not sustainable(perhaps even ethical)for those nations.
    read less
    
    Replied by: Matt Farrah
- 2 years ago
  
  Marinica Mihaela Froicu
- Marinica Mihaela Froicu
  2 years ago
  Very simple: very big responsibilities, many rules, procedures and policies and not everyone can do and not everyone wants to ... read more
  
  Very simple: very big responsibilities, many rules, procedures and policies and not everyone can do and not everyone wants to take on these responsibilities for low wages, unmotivated professionally, too much stress and working under pressure for little money and low wages! Because of this, the NHS is always short of staff, because it is sick and less money. If you are lucky enough to be qualified staff or nurse, most of the time in another country from Europe ,it is very good for them, not for you because you have no chance to progress in your career, they never have time to give you complete training and to have the good luck to practice more! Again because it’s always short of staff and everybody it is in rush! Too many patients overbooked according to the number of staff. This means poor professional care and poor medical quality. Patients are treated as numbers. The NHS should further stimulate the staff with intrinsic and extrinsic rewards to avoid collapse NHS and recruit more staff as well! Staff nurse, Mihaela
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  - Post a reply
- 2 years ago
  
  Carl Young
- Carl Young
  2 years ago
  A well written and thought provoking article. For me, retention starts at recruitment. When staff are over promised and underdelivered. The ... read more
  
  A well written and thought provoking article. For me, retention starts at recruitment. When staff are over promised and underdelivered. The enthusiasm for the Trust, Role or department is already dented. Add to this the high level of demand (physical and mental) of being a carer and life saver 12 hours a shift, often with minimal breaks, if any, then the slide into disappointment with the role commences. Working nurses too hard for too long equates to undervaluing them. When we feel undervalued we tend to examine why we are doing what we are doing and weigh up the balance of pro’s and con’s. If that balance includes long hours, poor support (numbers, seniority, resources,etc), poor renumeration, poor job prospects - we ask ourselves why we are doing something. If there is less in the positive pile than the negative, we start to look at what alternatives there are. The childhood dream of being a nurse can not be sustained on good will and a feeling of satisfaction alone - being able to self actualise your needs with the ability to secure your own home, support your, and your families needs, and provide the things that are expected in modern life then become the motivators to move on to a job that provides a better income. This piece shows the lack of forward planning and strategy to sustain the workforce of the NHS. The solution provided appears to be throw some money at it now and hopefully the problem will go away or something else will interest the public instead. We need a planned and delivered strategy that is not based on a university commercial model to get new recruits into nursing. We need more appropriate pay for experienced and dedicated staff to help retain, and we need increased numbers of staff to deliver staff patient ratios that do not compromise care or run the current staff into the ground so they leave. Don’t say we can’t afford it - the money is spent already supporting the system that has been created when using agency staff - re-allocation of funds to enhance pay and resources is the key.
  read less
  - 1
  - Post a reply
  - Thanks Carl. Yes, I agree with all of that. I also don't think that hiring from overseas is a long-term solution. It is also not sustainable(for the country whose skills we are depleting). As you migh... read more
    
    Thanks Carl. Yes, I agree with all of that. I also don't think that hiring from overseas is a long-term solution. It is also not sustainable(for the country whose skills we are depleting). As you might see, I do personally believe in the principle of the People Plan, and the People Promise. If rhetoric can be actioned. There is much work to be done. Recruitment is comparatively easy. But it's a costly sticking plaster and it is not funding a solution. Retention takes investment, planning and a long-term commitment. It also requires money. Proper money. But if the cost of not investing in it can be quantified, then it begins to make financial sense, as well as ethical sense. We have spoken to many broken nurses over the years. They want to give and care but they are often not shown the support they need. And I don't believe it's all about pay either. Retention is complicated. That's the fact of the matter. But it's not an insurmountable problem if the vision and commitment and budgets are there.
    read less
    
    Replied by: Matt Farrah
- 3 years ago
  
  John Gregan
- John Gregan
  3 years ago
  Hello Nikki, I am a retired GP and have witnessed untold damage in the NHS from staff absences , and I ... read more
  
  Hello Nikki, I am a retired GP and have witnessed untold damage in the NHS from staff absences , and I am keen to try and improve things for those in post, and for me who is encountering difficulties in trying to return. I would be grateful if you would contact me , if that sits well with you?
  read less
  - Hello John. Please could I ask you to contactme in the first instance, on Thank you.
    
    Replied by: Nikki Goodhew
- 3 years ago
  
  Thamsanqa Sibanda
- Thamsanqa Sibanda
  3 years ago
  Well-written and insightful piece. I still can’t comprehend why employers are so determined to spend more on agency than in ... read more
  
  Well-written and insightful piece. I still can’t comprehend why employers are so determined to spend more on agency than in their own regular staff who, as mentioned, “know the idiosyncrasies of [the] place of work inside out.” The amount of effort put into recruitment should also be the applied to retention.
  read less
  - Hello, thank you for your kind response. We believe that Retention starts the moment a new Recruit begins and we feel passionately that we can lead others to believe this to.
    
    Replied by: Nikki Goodhew

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NHS Staff Retention Review: Costs & Impacts

NHS Staff Turnover Costs

NHS Staff Turnover Numbers

Find healthcare jobs

How Much Does Losing Staff Cost The NHS?

How Much Does It Cost To Train And Recruit NHS Nurses?

How Much Does An Agency Nurse Cost?

How Much Does Absence Cost The NHS?

Get Hired

The Costs That Can’t Be Easily Quantified

The Cost Of Poor Retention Rates Can Spiral Quickly

How Can The NHS Increase Retention?

Find employers

About this contributor

Want to get involved in the discussion?

Jane Bullard

Jane Bullard

Marinica Mihaela Froicu

Marinica Mihaela Froicu

Marinica Mihaela Froicu

Marinica Mihaela Froicu

Carl Young

Carl Young

John Gregan

John Gregan

Thamsanqa Sibanda

Thamsanqa Sibanda

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NHS Staff Retention Review: Costs & Impacts

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How Much Does Losing Staff Cost The NHS?

How Much Does It Cost To Train And Recruit NHS Nurses?

How Much Does An Agency Nurse Cost?

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The Costs That Can’t Be Easily Quantified

The Cost Of Poor Retention Rates Can Spiral Quickly

How Can The NHS Increase Retention?

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About this contributor

Want to get involved in the discussion?

Jane Bullard

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Marinica Mihaela Froicu

Marinica Mihaela Froicu

Marinica Mihaela Froicu

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Carl Young

Carl Young

John Gregan

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Thamsanqa Sibanda

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