The Value of Self-Managing your Contingent Nurse Workforce

September 21, 2022
The Trusted Works Team

Scarcity of nursing resources—compounded by the influence of COVID-19—sky-rocketed demand for contingent staffing solutions. Travel nursing grew by 35% in 20201 and today, 9 out of 10 healthcare executives employ travel nurses.2 The global per diem nurse staffing market is also expected to grow nearly 5% each year through 2028.2 This increased reliance on contingent solutions to fill staffing gaps has a big price tag. Hospitals have spent an estimated $24 billion on contingent labor since 2020. If you are a healthcare leader, it’s likely you’ve felt the contingent-staffing budget burn. Moving forward, curbing temporary labor costs will require rethinking your contingent workforce strategy.  

The need for flexible staffing solutions is not going away. Though the pandemic exacerbated staffing issues—the nursing shortage and pervasive nurse burnout were issues before COVID-19 and will remain beyond the crisis. Besides the fact that our nursing workforce is exhausted and dwindling, nurses who remain are also seeking more dynamic, higher paying opportunities. This is due, in part, to the reality that many nurses were exposed to travel nursing’s increased flexibility and higher pay during COVID-19 (some earned triple their pre-pandemic salaries). Capturing these nurses as part of your workforce means thinking more flexibly about how you recruit, schedule, and pay your nursing staff.  

Hospitals committed to adapting and thriving in this evolving staffing climate must embrace a combination of contingent and permanent labor and should consider managing more of their contingent labor in-house. Handling contingent workforce staff management internally expands your power to effectively engage your existing workforce and attract a larger pool of nurses. Fortunately, self-management of your temporary nursing staff is more possible than ever, thanks to technology.

In this post, we explore how self-managing your contingent workforce can help reduce clinician turnover, lower staffing costs, improve patient care quality, and streamline hospital operations. Read on for actionable internal contingent workforce management strategies to consider applying within your organization.   

Shifting from MSPs to a Self-Managed Approach

Historically, many hospitals have outsourced external nurse labor management to Managed Service Programs (MSPs). Today, 71% of hospitals3 use an MSP or a Vendor Management System (VMS) software to manage their temporary nurse staff. MSPs lighten administrative workload by tracking and reporting staffing metrics across temporary staffing vendors, consolidating billing and invoicing, and handling all aspects of external workforce HR.  

MSPs also add value to hospitals because they mitigate regulatory and compliance risks associated with hiring external talent. They provide access to high- quality talent and they offer reporting and staffing processes most hospitals don’t have in-house. MSP’s manage a lot—contingent labor sourcing, recruiting, interviewing, hiring, onboarding, vendor management, paying, and compliance. It all adds up to taking the time-intensive tasks associated with managing external labor off already-full internal staff plates.  

However, technology is lessening the laborious nature of this work. In turn, the role of MSPs is changing. As contingent workforce management processes are increasingly automated with AI and data, hospitals have more options to reduce administrative burden without entirely outsourcing the management of their contingent labor force. Innovative hospitals are seizing the opportunity to view their workforce holistically rather than managing external labor  in a silo apart from internal staffing operations.  

Consider this—what strategic advances might your hospital or health system be able to make if you had full visibility into your internal labor force and contingent labor resources in real time? Imagine being able to view every possible staffing option—internal and external alike—in one cohesive platform and strategically place the right nurse in the right place—matching patient care needs, hospital budget realities, and nurse preferences. That dream is possible with the latest healthcare workforce management technologies.  

MSPs typically have their own technology and offer hospitals very little opportunity to see “how the sausage is made” so to speak. As a result, healthcare leaders are left waiting for quarterly business reviews to get any sense of staffing trends and performance. Additionally, if you outsource temporary staff management to an MSP, you’re often locked into an exclusive contract without visibility into the data on the temporary staff resources working in your facility. The MSP knows who they are, where they live, how to contact them, and their current availability. Meanwhile, your hospital, usually, does not. As the nurse staffing market becomes increasingly competitive, this is a missed opportunity.  

Now more than ever, owning your database of internal and external nurse resources is invaluable. For example, if you have a per diem nurse’s credentials and availability easily accessible internally, you can tap into contingent labor when you need it, without involving a middleman. That equates to a much higher likelihood that—in a pinch—you can cover your shifts faster and at a lower cost than waiting to engage an MSP. It also increases the likelihood that that nurse is local, fully credentialed at your facility, and already comfortable working at your hospital.  

Strategies to Self-Manage your Contingent Nurse Workforce

There are many reasons your organization might need agency nurses—filling an open position between full-time hires, provisioning for gaps due to nurse vacation or sick leave, and augmenting resources during flu or tourist season, among others. In the past, building your own internal agency to address these needs was an inefficient option. Hospitals lacked the data necessary to view available talent and accurately forecast staffing needs. Today, we have that data, and managing your flexible labor in-house can be a more nimble, cost-effective, and efficient way to manage travel, per diem, and local float pool labor.  

In the past, outsourcing external labor management made sense as a complement to rigid staffing models where full-time nurses and 12-hour shifts were the preference and the norm. Today, as hospitals begin to experiment with a gig-economy-style nurse staffing models, managing full-time and contingent labor through one system is increasingly logical and effective. The essence of this paradigm shift is that nurse staffing is becoming less about how many shifts you have to fill and 13-week contracts and more about how many hours you have to fill and what combination of talent makes the most sense to cover those hours.

Today it is possible to build an internal, centralized staffing structure that empowers your facility to proactively prepare for both unexpected and expected staff shortages, leveraging both permanent and contingent labor forces. To build out your contingent workforce, we suggest creating an internal agency that combines an internal travel program and an internal local float pool of contract nurse resources.  

Internal Travel Program

We suggest that your internal travel program include a roster of flexible clinicians (RN’s, CNA’s, etc.) or allied health professionals who are employed by your health system and work long-term contracts (4-26 weeks) or day-of staffing assignments spanning multiple specialties, facilities, and states (if applicable to your system and if nurses have obtained appropriate multi-state licensure). Most internal travel programs offer full-time or part- time employment, vacation hours, insurance and other benefits, along with the pay and flexibility offered by external agencies, including traveler rates and stipends for floating outside their home region. 

Internal Local Float Pool

In addition to the internal travel program, we also advise that you build out an internal local float pool that includes a group of clinicians (RN and allied health) who live within a 50-mile radius of your hospital(s) and are hired into a single cost center for your health system. They can be assigned to a unit for either day-of staffing or pre-assigned needs when the schedule is built. Since internal local float pool clinicians live close by, they do not need accommodations (such as a housing stipend or meal allowances) to complete their assignment. The clinician can be full, part-time, or per diem and can be offered a variety of benefits related to their employment type such as PTO, retirement, time off in-between assignments, incentive pay, certification pay, and reimbursement for driving between facilities when floated during their daily staffing assignment.

Key Benefits of Managing your own Contingent Nurse Workforce

We’ve talked a bit about what’s driving the rise in contingent nurse labor and more flexible staffing models, and we’ve discussed some strategies to build out an internal nurse staffing agency. Now, here’s why it’s worth doing and the value it can have for your hospital:

  1. Increase Nurse Engagement
    A self-managed model enables nurses to have more schedule flexibility while offering them the opportunity to gain new skills and experiences from working across multiple departments, hospitals, and even geographies. In addition to providing the flexibility and autonomy nurses desire, internal travel programs often offer more competitive wages to nurses leading, in part, to a more engaged workforce.
  2. Enhance Culture
    Another benefit of an internal nurse staffing agency is that you have more influence over the culture of both your permanent and temporary staff resources. When they are managed cohesively, that cohesion spills over into every day dynamics in nursing units. Internal staffing personnel (both permanent and contingent) are more likely to be invested in the mission, vision, values, and culture of your health system than purely external staff. When you own your own agency, you own the power to make every clinician feel like a human being that is invaluable to your hospital rather than a warm body to fill a shift.
  3. Improve Nurse Retention
    Internal travel programs offer more competitive wages to nurses leading to a more engaged workforce, higher retention rates and the ability to reduce costly contract labor expenses. This may help your organization attract nurses you previously lost to outside travel agencies by offering them not only competitive pay rates, but also stability, benefits, and more flexibility and ownership in their practice.
  4. Reduce Staffing Costs
    Increasing utilization of internal float staff rather than contract labor via an agency helps reduce added costs that come with agency labor and paying an external agency a management fee. Additionally, building an internal agency program can help you avoid placing staff off or on call due to volume fluctuations and reduced need for nurse overtime and incentive pay, which both lower staffing costs.
  5. Increase Staff Management Efficiency
    By consolidating float staff and budget into a centralized staffing office, you can better understand your labor pool resources and expenditures and strategically leverage your workforce to efficiently flex staff capabilities and reduce management redundancies. This optimizes resource use and allows your staff and providers to spend more time on patient care.

Self-Manage your Contingent Nurse Workforce with Ease

Trusted Works streamlines previously cumbersome processes to help your hospital centralize your staff office and effectively self-manage your nurse workforce. In the past, it was not possible to execute on these kinds of flexible workforce programs because systems capable of managing the complexity and operational nuances of an internal travel program were not available. But with intelligent VMS solutions like Works, you can create and self-manage innovative programs that engage nurses and provide ultimate operational flexibility at a lower cost. Learn more about how Works can help your hospital self-manage contingent labor at