• 22 November 2021
  • 6 min read

The Complex Costs Of Failing To Retain NHS Staff

  • Nikki Goodhew
    Nurses.co.uk Clinical Career Manager & Registered Nurse
    • Richard Gill
    • Mat Martin
    • Ben Gordon
    • Aubrey Hollebon
    • Janet Dalton
  • 2
  • 717
“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.”

Nikki explains how failing efforts from the NHS to retain staff could be having a massive impact, both financially and culturally.

Topics covered in this article

Introduction

How Much Does Losing Staff Cost The NHS?

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

How Much Does An Agency Or Bank Worker Cost?

How Much Does Absence Cost The NHS?

The Costs That Can’t Be Easily Quantified

The Cost Of Poor Retention Rates Can Spiral Quickly

Introduction

If recruiting more staff is the NHS’ primary concern, it’s fair to say that the issue of retaining them should be a very close second.

Or to put it more simply, retention is just as important as recruitment.

But 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 more attention, and more investment?

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

Progress Your Career

1000s of Jobs in Nursing, Healthcare & Social Care

Search Jobs

How Much Does Losing Staff Cost The NHS?

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

That’s primarily because an employee’s value is vast and complex – as is the cost of replacing them.

There’s the cost of recruitment.

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

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 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 Recruit And Train NHS Staff?

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

The same report says that the cost of training just one staff Nurse to be independently competent is £85,000, while the cost for a doctor is around £245,000.

When we consider that total NHS shortages are estimated to number around 85,000, the training cost alone is vast.

And that doesn’t even cover all recruitment costs – the price of actually finding and attracting prospective staff to train in the first place.

A case study for Hillingdon Hospitals’ NHS Foundation Trust found that it cost £403.70, on average, to recruit a Nurse.

Again, multiply this figure by thousands, and you get a realistic sense of the scale of this issue.

How Much Does An Agency Or Bank Worker 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.

---------- ---------- ---------- ---------- ----------

Do you have any questions

Ask below

---------- ---------- ---------- ---------- ----------

The British Medical Journal has also found that the NHS can easily spend 25 times more on a locum doctor than a permanent one.

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. And especially during the pandemic, the impact of under-staffing on absence has been undeniable.

In early 2021 it was revealed that one in ten NHS Nurses was on sickness leave. And in August 2021, Nursing Times discovered that there had been a 37% increase in mental health related absences.

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.

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

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.

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.

---------- ---------- ---------- ---------- ----------

Do you have any questions

Ask below

---------- ---------- ---------- ---------- ----------

About the author

  • Nikki Goodhew
    Nurses.co.uk Clinical Career Manager & Registered Nurse

I'm a Registered Nurse with 35+ years experience (lead nurse, practice nurse, clinical lead and health coach) and work at Nurses.co.uk as the Clinical Career Manager, providing career coaching for our community members. I'm passionate about supporting the wellbeing & transformational career development of nurses.

See all of our RGN jobs

5598 jobs currently available

Search Jobs

Care Professionals Helping One Another

Nurses.co.uk is a community where people like you can contribute and share advice. Learn & never miss out on updates. Subscribe to be part of our community.

  • Nikki Goodhew
    Nurses.co.uk Clinical Career Manager & Registered Nurse

About the author

  • Nikki Goodhew
    Nurses.co.uk Clinical Career Manager & Registered Nurse

I'm a Registered Nurse with 35+ years experience (lead nurse, practice nurse, clinical lead and health coach) and work at Nurses.co.uk as the Clinical Career Manager, providing career coaching for our community members. I'm passionate about supporting the wellbeing & transformational career development of nurses.

  • 2 Comments
Want to get involved in the discussion
Sign In Join
    • John Gregan 4 days ago
      John Gregan
    • John Gregan
      4 days ago

      Hello Nikki, I am a retired GP and have witnessed untold damage in the NHS from staff absences , and I ... read more

      • Hello John. Please could I ask you to contactme in the first instance, on Thank you.

        Replied by: Nikki Goodhew
    • Thamsanqa Sibanda 5 days ago
      Thamsanqa Sibanda
    • Thamsanqa Sibanda
      5 days 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

      • 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