Amid high nurse turnover, nurse residency programs are proven to reduce attrition of new nurses while rendering savings to hospitals' bottom line.
Many factors influence why new nurses choose to leave the profession. From a lack of strong leadership to a poor work environment, minimal empowerment or lack of mentorship, new nurses are faced with myriad challenges from Day One. One study found that a staggering 33% of new nurses leave their job within the first year and up to 56% leave within the second year. Given that the average cost of turnover to an organization is up to $40,038 per frontline nurse, there is an urgent need to retain new nurses and ease their transition to practice.
Some 20 years ago, the Joint Commission recommended creation of a planned, structured training period for new nurses to acquire skills, gain knowledge, and demonstrate competency in the provision of patient care. Today’s new nurse residency programs offer clear benefits that improve nurse retention and quality of care for patients. They also cost less than losing nurses due to burnout and other prevalent stressors. These programs provide proof that nurse residency programs can be a cost-effective means to reduce high nurse turnover rates, bridge the academic-practice gap, and foster a supportive environment for nursing to grow professionally.
How do hospitals build the business case for residency programs, and what are the benefits?
The case for implementing a nurse residency
Nurse residency programs are a proven way to better support new nurses, promoting career development and training to help reduce turnover. A recent Nursing Administration journal article, New Nurse Residency Programs Benefits and Return on Investment, highlights Versant and Vizient, two well-known, one-year residency “transition to practice (TTP)” models that focus on the competency profile of each nurse within a specialty. Debriefing and professional mentoring are hallmarks of the models. While there is a high turnover risk for nurses in their first and second years, the new nurses in the TTP group that were featured in the article had turnover rates that were 53.4% less than counterparts that did not have access to programming.
Vizient and the American Association of Colleges of Nursing (AACN) jointly developed a residency program that requires an academic-practice partnership between the hospital and a nursing school as a condition of participation. Vizient’s model includes preceptor-guided clinical experiences, monthly seminars, and small group-guided sessions. At the one-year mark, the program reported a 95% retention rate.
According to Vizient/AACN, there are multiple benefits associated with new nurse residency programs, including:
- Strengthens critical thinking skills and use of evidence-based practices to improve clinical judgment
- Builds competence and confidence in clinical decision-making
- Enables stronger clinical nursing leadership, communication, and practice safety
- Provides individual development plans for new nursing roles
- Improves professional commitment, nurse satisfaction, and team interactions
Estimating the bottom line for residency programs
In a complementary study cited in the journal article, Silvestre and colleagues further explore the return on investment (ROI) of residency programs and the potential savings to a hospital’s bottom line. They conducted the study using a randomized, controlled, multisite design to demonstrate a positive ROI and provide evidence to support the business case for implementing a new graduate RN TTP program to decrease turnover.
Seventy hospitals with 1032 new graduate RNs participated in the evidence-based TTP program, designed by the National Council of State Boards of Nursing (NCSBN) and more than 35 other nursing organizations and other collaborators. At the end of the first year, some 81.2% of the new graduate RNs remained employed at the hospitals with a turnover rate of 15.5% for the TTP group and a net cost savings of $7265 per new graduate RN retained.
Bringing a residency program to an acute care hospital
Also profiled in the journal article is a case study, examining how nurse leaders in an acute care hospital were able to increase retention and new nurse satisfaction, improve preceptor engagement, and facilitate stronger staff engagement through their new nurse residency program. The hospital used the ANCC TPP model and ROI calculator to calculate costs and returns.
As part of the program, nurses were provided extensive clinical training, instruction, and mentoring. In the year prior to launching the program, the turnover rate was 44.4%; the projected 1-year turnover rate for new nurses after participating in the nurse residency program was forecasted at 10%, demonstrating a net savings of $870,480 from reduced turnover. The projected ROI for the new nurse residency program at 1-year post-implementation was 366.5%. Moreover, the costs of implementation were offset more than 300% by reduced turnover of staff.
These findings, and the body of research demonstrating strong returns, clearly demonstrate that new nurse residency programs can reduce turnover, improve nurse and team satisfaction, and decrease new nurse anxiety and stress.
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