Many studies and systematic reviews link better hospital nurse staffing to better patient outcomes (including lower mortality) and better staff retention. But achieving optimal staffing often varies at the shift level because of the complexity of matching the right number and skill level of nurses to the variable patient demand created by changes in census and acuity. Filling open shifts can result in considerable stress for both managers and staff. (See sidebar: Staffing stress.)

Fortunately, an incentive program can ease this stress. When operationalized correctly, the program alleviates last-minute recruitment frenzy and mitigates potential gaming of the process by front-line nurses holding out for the most money possible as managers become increasingly desperate. Here is how you can develop and implement a successful incentive program.

What is an incentive policy?

Incentive policies, a critical component of an organization’s staffing ecosystem, define how a hospital or health system will pay additional money to recruit for an upcoming open (unfilled) shift. They outline the process for managing open shifts, give an overview of the dollar amounts, and define the scope of the program. These policies are in addition to other traditional workforce policies that a health system may use to meet their staffing demands, such as weekend programs and call shift expectations.

Incentive policies are an integral part of the incentive program you build by using the following steps.

Step 1: Form a team

The incentive program team should include HR compensation experts, finance staff, operational nurse leaders, and front-line staff. If front-line staff cannot serve on the team, be sure to involve them in other ways, such as working with decision-making councils. This will help ensure buy-in.

You’ll want to take a rapid process improvement approach to facilitate the project team in designing the new program. The draft of the new program that the team develops should be circulated to executives and key operational leaders for review and approval.

Step 2: Analyze existing policies

The team’s first step is to gather all existing policies related to incentives at the unit, hospital, and system levels. These include staffing and overtime policies, union contracts, and policies related to internal PRN/per diem, weekend, and call programs. Review the policies, identifying overlaps and key elements you may want to keep.

Step 3: Structure the program

Consolidate existing incentive policies and integrate them into a single incentive program.Having one program improves efficiency and ensures leaders are not outbidding each other for the same talent.

Best practice tip: Align your incentive policy with your staffing policy so both represent the incentive program. The program also needs to align with any union contracts.

Elements of the program are hourly rate, eligibility, criteria for receiving the incentive rate, and shift distribution.

Hourly rate

A tiered program helps the organization to adapt to market trends and demands more effectively. Keep the number of tiers to no more than three. Consider having a low, medium, and high dollar range that is applied as additional money per hour to an extra shift that is worked.

Best practice tip: Review and assess incentive hourly rate on an annual basis and adjust as needed based on market trends.

Eligibility

Determine eligibility criteria for the workforce.

• Full-time/Part-time staff are eligible once they have worked their hired hours
• PRN/per diem staff need to work their required hours determined by the organization's PRN policy before being eligible for incentive shifts
• Internal agency or float pool staff can be eligible for incentive shifts in areas they are competent to work, but should only be eligible for the lower level tier since they already have a high hourly rate associated with their flexible position
• International (temporary to permanent) should only be eligible for the lower level tier since they already have a high hourly rate associated with their temp to perm position
• External travelers typically are not eligible for incentive shifts. However, if there is an immediate need and all other options have been exhausted, organizations can offer the lowest incentive level, as a last option
• The incentive should be stacked with overtime when an employee is picking up an extra-shift above 40 hours a week

Incentive rate criteria

Develop criteria for offering incentives for unfilled shifts. It can be helpful to review past schedules to develop these. Less desirable shifts typically have a higher incentive amount compared to less desirable ones.

Shift distribution

You’ll want to define how to distribute open shifts, starting with the most qualified but least expensive nurse.

Here is an example of an incentive program with all four elements.

Step 4: Establish open shift management processes

Now you’re ready to operationalize your incentive program as a tool for managing open shifts. To bring the program to life—and avoid costly staffing errors because of a lack of coordination—you’ll need to create processes related to how to offer incentives. Keep three key points in mind.

1. Define roles and responsibilities. It needs to be clear who has the access and authority to offer incentive shifts. Otherwise, lack of coordination between the staffing office team and nurse managers could end up in the two outbidding each other for the same talent.‍

Best practice tip: Centralize incentive shift offerings in a central staffing office if you have one. The office will then have a high-level view of current staffing resources, which allows for better operational management.

2. Determine timing. Incentives for open shifts should be offered early, with the established dollar amount for the tier. Don’t wait until the last minute (4hours before the start of the shift) to offer the most money. Offering the money days in advance rewards proactive behavior by staff. Above all, don’t send last-minute messages for the highest incentive pay recruitment unless absolutely necessary to deal with a true emergency such as a storm or other catastrophic events. ‍

Best practice tip: Offer the highest tier for open shifts early, based on established criteria. For example, the unit schedule is complete, and you have 14 days to fill 21 unfilled day shifts due to leave of absences. On day 14, offer Tier 3 because your unit shift vacancy is greater than 20%. (The unit shift vacancy is determined by taking the  total unfilled day shifts [for example, 21 shifts] divided by total day shifts needed [for example, 98 shifts], which in this example gives you a vacancy of 21%[21/98=21%]).  As shifts are filled and the shift vacancy drops below 20%, change the incentive level to the Tier 2 for remaining shifts. Never offer the most expensive incentive offering right before the start of the shift.

3. Use staffing technology. Dynamic staffing technology enables you to provide automated shift matching and price transparency for your front-line nurses. Find a technology that users can access via a mobile device, integrates with your current scheduling system, and allows for configuration of incentive shift pricing and automated distribution of those shift offerings to your workforce. This will reduce management overhead, staffing errors, and manual workflows such as email, phone calls, text messages, and paper sign up. ‍

Best practice tip: Empower the frontline nurse to own their practice and select their shifts. If they can do so on a mobile device, expect them to sign up for shifts themselves. Do not enter shifts for them, which creates more work and increases the chance of errors. Train, educate, and set expectations.

Step 5: Launch the program

Set ago-live date. Give yourself at least a month before go-live to educate managers, the staffing office, and front-line staff about the program. Tap into outlets such as management meetings, the intranet, huddles, and staff meetings, and create educational flyers for distribution.

Best practice tip: Discuss transparent pricing, the process, and proactive staffing incentives with frontline staff, which will help reduce their attempts to “game” the system by holding out for more money until closer to the shift.

Step 6: Follow-up

The sample incentive program and recommended best practices presented here are just a starting point. Data trends should be evaluated quarterly. Look for trends that could inform how to dynamically incentivize shifts by day of week and time of day because not all shifts are created equal in the eyes of the nurse. Some desirable shifts may not need a higher incentive amount when compared to less desirable shifts. You also should review and update the program on an annual basis.

Winning the game

Historically incentive programs have been described as being “gamed” by front-line nurses who know how to get paid the most. This may be true, but with automated technology and innovative, strategic incentive programs, health systems can effectively change the game to better manage costs, while ensuring quality patient care. With the right tools, technologies, and analytics, the health system can change—and effectively win—the staffing incentive game.

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Sidebar

Staffing stress

Nurse managers typically spend 60% of their time on nurse staffing and scheduling, with filling vacancies a significant part of that time. The most common causes of vacancies are unexpected leave of absences that take front-line nurses off the schedule for weeks at a time, short-term sickness that results in nurses calling off only a couple of hours before the start of a shift, and open positions on a unit as the result of turnover.

Nurse managers and those in a central staffing office spend a large amount of time reacting to these situations, using email, phone-calls, paper sign up sheets on units, and group chats or text messages (sometimes via Facebook or WhatsApp) to plug unfilled shifts with staff. In addition to frequently being unsuccessful, these methods have limited ability to account for factors such as staff skills-mix, consecutive shifts, and costs associated with overtime or incentives for those taking open shifts. This approach is costly, stressful, and often unsuccessful.

Consider this scenario: A medical-surgical unit schedule that has just been published has three unfilled shifts for a night shift less than 12 hours away. The pressure of this situation is felt by all as both the staffing office and nurse manager start recruiting. This duplicative effort results in outbidding when it comes to incentives and bonuses to get shifts filled from the same talent pool, and results in an unequal opportunity for nurses to benefit financially by picking up shifts. In fact, many nurses know how to get the most for the shift and are holding out for the highest dollar amount offered by the hospital, they know will occur right before the start of the shift as managers become increasingly concerned about filling the shift.

Instead of this type of last-minute, ad hoc approach, managers can take a proactive approach to the problem by developing a comprehensive incentive program.

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Resources

The following resources may be helpful in developing strategies for filling open shifts.

Bowie D, Shelley K, Weigel K, Scherzinger T. How to build a flexible workforce program: Making the dream a reality. NursLeader. 2022.

Bowie D, Baker, K. Centralized vs. decentralized staffing: Two case studies. Am Nurs Today. 2019;14(6):41–47. https://www.americannursetoday.com/wp-content/uploads/2019/05/ant6-Staffing-521.pdf

Drake RG. The ‘robust’ roster: Exploring the nurse rostering process. J Adv Nurs. 2014;70(9):2095-2106.

Fitzpatrick T, Miserendino C. Effective staffing takes a village: Creating the staffingecosystem. Nurs Econ.2016;34(2):58–65.

Fitzpatrick T. Using science to improve the art of staffing. Nurs Leader. 2017;15(4):246-250.

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