Striking an optimal balance between temporary and permanent healthcare worker recruitment in times of uncertain demand

New research defines a framework to help employers minimise employment costs

Perhaps more so than in other sectors, the task of recruiting the correct mix of permanent and temporary workers for the healthcare sector is complicated by the periods of highly uncertain demand that affect it.

New research at Bayes Business School (formerly Cass) proposes a two-stage framework to inform recruitment decision-making during such periods.

The past few decades have seen the sector in need of such solutions. Chronic staff shortages, patient demand requirements, lengthy recruitment processes for permanent staff, and rising absenteeism and turnover among incumbent permanent staff have led to a substantial increase in the use of temporary healthcare workers. For example, the total hours of temporary nurses requested by hospitals within the NHS doubled from 2011 to 2015.

Temporary workers help hospitals respond quickly to variations in patient demand, and for when permanent staff are unavailable for whatever reason.

However, skilled temporary staff are generally more expensive than their permanent counterparts. A recent survey implied that savings of about half a billion pounds could have been made in the NHS during 2018 had hours worked by temporary workers been covered by permanent staff. It is therefore important for healthcare providers to find the right balance between permanent and temporary staff.

Finding this balance is difficult, for several reasons:

  • Firstly, there is a difference in the time it takes to recruit the two. Permanent positions can take months to fill; temporary posts can be filled within hours, with more accurate information about demand available to the healthcare provider at the time.
  • Secondly, recruitment is hampered by uncertainty, because there is no guarantee that all required positions (especially those that are permanent) can be filled.
  • Thirdly, healthcare providers often experience periods of highly uncertain demand. In the UK, we see this during winter, when it is difficult to predict peak demand. We also saw such demand uncertainty across the globe during the Covid-19 pandemic.

The research paper, A framework for optimal recruitment of temporary and permanent healthcare workers in highly uncertain environments, focuses on the recruitment decision making required during a period of highly uncertain demand, where a mix of permanent and temporary healthcare workers would be needed.

The healthcare provider must decide how many permanent staff positions to advertise well in advance of such a period, relying on whatever information is available as to what demand will be. The researchers refer to this as the first-stage decision.

Once the permanent positions are advertised, applications arrive, are considered, and job offers are made.

Then, at the start of the period of high and uncertain demand, the provider must decide how many temporary workers to recruit, taking into account the number of permanent appointments made, and the latest information about demand for services. The researchers refer to this as the second-stage decision.

With fast numerical algorithms developed to find the right number to be advertised/recruited at each stage, the researchers’ two-stage optimisation framework seeks to minimise the expected cost of the combined workforce, along with the cost incurred by patients while their requests for service are in the system, taking the dependence of the second-stage decision to that of the first stage into account.

A case study conducted using data from a geriatric ward demonstrates how this framework can be adopted to guide nurse recruitment decision-making in a complex environment.

Two of the report's authors, Dr Navid Izady and Professor Lilian M de Menezes, said:

“Using historical data on patient demand and employees’ recruitment, our approach provides a simple methodology for a complex decision faced by many care providers across the world.

“This decision concerns specifying the number of permanent positions to advertise in preparation for a highly volatile demand period, knowing that there will be further opportunities later on to complement the workforce using more expensive temporary workers.

“Our approach incorporates three main sources of uncertainty in such decision making, namely: uncertainty in demand, uncertainty in recruitment, and uncertainty in duration of services.”

The lead author on the study was Dr Saha Malaki.

The research paper has been published in the European Journal of Operational Research.

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