Labor Management and Tiered Staffing Strategies in Healthcare Organizations


  • Optimal healthcare staffing requires balanced core and contingency models to provide stability while managing fluctuating patient volumes.
  • Robust data analytics and forecasting are essential to predicting daily staffing needs and aligning labor budgets.
  • Flexible staffing arrangements like float pools and incentive pay facilitate efficient coverage of unexpected gaps.

Effective labor management and staffing are critical to delivering quality patient care for a healthcare organization. With labor costs accounting for more than half of a healthcare facility’s operating budget, optimizing your workforce through flexible staffing strategies can have a major impact on your bottom line. This article will explore best practices for healthcare labor management and staffing, including contingency resource planning, patient volume management, and developing robust core and contingency staffing models.

Core and contingency staffing models

An effective healthcare staffing model dynamically adjusts to patient volume and unplanned absences incorporates both core and contingency staff resources.

Core staff

  • Hold regular, predictable schedules and FTE commitments.
  • Assigned to specific units/service lines.
  • Provide foundational coverage for standard workload.

Contingency staff

  • Bring flexible coverage through internal float pools, PRNs, agency nurses, overtime from core staff.
  • Help address fluctuations in patient volume and acuity.
  • Fill gaps from absences, vacations and unplanned leave.

Getting the right balance between core and contingency staff is key. Too few core staff leads to over-reliance on expensive contingency labor. Too many core staff leaves nurses underutilized during slow periods. The optimal balance depends on the variability of patient volumes and seasonality.

Rightsizing your core staff

Determining the appropriate size of your core staff starts with analyzing historical census data and staffing requirements. Look at daily, weekly and seasonal patient volume patterns on each unit. Identify minimum and maximum staffing needs based on historical highs and lows.

Factor in typical core staff availability — removing time spent on PTO, sick leave and training. Avoid overstaffing for peak periods, which leads to inefficiency during slower periods. Instead, build a core level that provides solid coverage for typical volumes, then leverage contingent labor for peak periods.

Regularly revisit core staffing needs as volumes, length of stay and patient acuity evolve. Adjust to meet demand while minimizing overstaffing and work with leadership and staff to gain buy-in on changes.

Forecasting staffing needs

Accurately forecasting staffing needs is crucial for proper workforce planning. While many organizations rely on historical census data, modern predictive analytics solutions utilize AI and machine learning to provide more accurate forecasting to better align staffing needs. 

AI-driven workforce planning solutions utilize historical census data, EMR for real-time patient acuity and diagnoses, weather, and thousands of other data points to achieve 90%+ patient volume accuracy to the hour. Enhanced precision in patient volume forecasting equips managers to more effectively predict staffing gaps and proactively schedule resources, avoiding the costly last-minute reactive scheduling often needed to cover shift vacancies.

Building a tiered approach to staffing

Healthcare organizations rely on a range of contingency staffing resources to effectively fill gaps and manage fluctuating patient volumes. These include:

  • Internal float pools: Dedicated staff units that provide coverage across other units based on daily demand, often divided between specialty areas.
  • PRN pools: Also known as per diem nurses. Work on a flexible, as-needed basis to fill open shifts. May have minimum shift requirements.
  • Local per diem: Gain access to the gig workforce and ensure greater continuity of care.
  • Traveler programs: Contract with traveling nurse agencies to fill longer-term staffing gaps. Travel nurses can provide quick sourcing for niche roles.
  • Premium pay incentives: Offer overtime or incentive pay to current staff to voluntarily fill urgent open shifts.
  • Voluntary furloughs: Provide options for staff to voluntarily take unpaid time off during slower periods.

When filling schedule gaps due to unexpected demand or unplanned absences, utilizing contingency staffing resources in a tiered approach optimizes healthcare staffing and costs. Taking into account the capabilities of each individual clinician and analyzing the costs of each resource category is critical to ensuring the best matched and lowest cost resource is scheduled. There may be instances where the collective expense of core staff, including overtime and incentive bonuses, surpasses the cost-effectiveness of utilizing PRN agency nurses. 

Advanced technology can provide the invaluable capability of identifying available personnel that best match the staffing requirements while considering the overall resource expenses. This technology can be configured for automated decision-making or entrusted to the staffing manager’s discretion, allowing them to select the most appropriate resource.

In summary, the foundation of effective labor management lies in the synergy of core and contingency staff models. A successful model balances patient care and financial responsibility while being able to adapt to unplanned absences or surging volumes. Robust data analysis and AI-driven workforce planning play a pivotal role, aiding in more precise volume prediction and staff alignment. Ultimately, by embracing a tiered approach to contingency planning, healthcare facilities can ensure that they are not only financially efficient but also exceptionally responsive to the needs of their patients and the ever-evolving healthcare landscape.

Jackie Larson

Written by Jackie Larson

Jackie Larson is a healthcare industry veteran and recognized thought leader. With more than 20 years in the industry, she has provided guidance and support to hundreds of hospitals on a range of issues including workforce optimization, productivity, labor pool and incentives, system integration, resource management and business analytics.

Jackie is a sought-after writer and speaker on healthcare staffing and workforce optimization topics. She has been featured at national conferences and is a regular contributor to Becker’s Hospital Review and the Huffington Post, among other publications.