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Investing in nursing retention is a smart move in today’s economy


In today’s economic climate, hospital executives are grappling with the tightening financial aspect of their operations now more than ever. One of the key areas where hospitals can be more efficient in both operations and quality of care efforts is in nurse retention. The Nursing Turnover Cost Calculation Methodology shows that each nurse that leaves his or her position costs the hospital approximately $88,000. Voluntary turnover among first-year nurses is estimated at 27.1%.

As a registered nurse for more than 35 years and heavily involved in programs that help improve the working environment for nurses, I’m particularly pleased with the results of a successful nurse residency program co-developed by the University HealthSystem Consortium (UHC) and the American Association of Colleges of Nursing (AACN).

The UHC/AACN Nurse Residency Program™, available to members and nonmembers of UHC, provides first-year nurses with tools to adjust to the high pressures of working as a hospital nurse. This one-year program has shown remarkable success in nurse retention.

Meeting the needs of first-year nurses

Because of heavier workloads, as well as patients who require more complicated care and higher nurse-patient ratios, first-year nurses can often experience a difficult transition from nursing school to the real world. Also, these overburdened first-year nurses can affect veteran nurses who may be asked to help the new nurses adjust to the hospital pace.

Our nurse residency program offers transition support for first-year nurses in the following areas:

  • Delegating/supervising
  • Role socialization
  • Utilization of research
  • Prioritizing/organizing
  • Clinical reasoning, safety
  • Nurse-sensitive patient outcomes
  • Communication
  • Critical thinking/problem solving

Perhaps the biggest advantage of the program for first-year nurses is that they feel like they are a playing an important role in the organization.

Advantages for hospital executives are also abundant, especially with regard to turnover rates and the costs associated with recruiting, replacing, and training replacement nurses.

My hope is that more hospitals participate in this nurse residency program so their first-year nurses will be able to do three things:

  1. Successfully transition from school to the hospital
  2. Make it through the first year
  3. See themselves as integral parts of the hospital

Accomplishing these three goals may not seem to translate directly to operational efficiency, but hospitals will reap the benefits.

Reducing turnover rates

Since the program’s inception in 2002, more than 20,000 nurses have participated in the UHC/AACN Nurse Residency Program. The average retention rate for nurses in the program has risen to 96.1%—more than 20 percentage points higher than the national average. This past year, 20 hospitals that participated in the program did not have any first-year nurses drop out.

At University of Wisconsin Hospital & Clinics, the new graduate turnover rate for nurses was 34% in 1999—more than one in three new nursing graduates were leaving! Hospital executives, concerned about the loss of its new nurses, joined the UHC/AACN Nurse Residency Program. In the hospital’s first year of participation, the first-year nurse turnover rate dropped to 10.8%. By the second year, it dropped to 6.8%.

Converting first-year nurses into veteran nurses helps keep operational costs down.
Organizations spend $300,000 annually in nurse turnover cost for every one percent increase in turnover, according to a 2007 PricewaterhouseCoopers’ report.

The Methodist Hospital System in Houston calculated financial benefits of more than $700,000 based on its participation in the UHC/AACN Nurse Residency Program and subsequent decline in its nurse turnover rate. Nurse turnover rates dropped dramatically, from 50% to 13% in the first year of the program.

Many hospital executives are under intense pressure to streamline operations without sacrificing patient quality. Undoubtedly, they are facing very tough choices about staffing. However, investing in nurses—especially first-year nurses—is a sound strategy.

Recent studies show that the UHC/AACN Nurse Residency Program may be saving participants more than $6 million a year on first-year nurse turnover expenses. This is a return on investment ratio of at least 14:1.

If hospitals invest in a program to create a more stable nursing staff, they are likely to see reduced recruitment expenses and overall better quality of care for patients. Plus, the professional growth of nurses is positively affected when they remain in their first professional position for a few years.

A positive difference

I continue to be encouraged by comments from nursing executives who have participated in the program and tell me what a positive difference it has made for the nursing staff and for the hospital overall. One of the comments we received from Victoria Rich, Associate Dean of Clinical Practice at Penn School of Nursing added to our enthusiasm for the program: “New graduates frequently identify this residency as the reason they love the professional practice of nursing.”

For more information about the UHC/AACN Nurse Residency Program, call (630) 645-8164 or e-mail .

Cathy Krsek is the senior director, quality operations, for the University HealthSystem Consortium in Oak Brook, Illinois.

From our readers gives nurses the opportunity to share experiences that would be helpful to their nurse colleagues. Because of this format, the stories have been minimally edited. If you would like to submit an article for From our readers,click here.


Jones CB. Revisiting nurse turnover costs: adjusting for inflation. J Nurs Adm. 2008;38(1):11-18.

What works: healing the healthcare staffing shortage. PricewaterhouseCoopers Health Research Institute; 2007.

1 Comment.

  • Florence Hardesty, BSN, MSN, PhD.
    April 21, 2011 6:13 am

    I graduated more than sixty years ago from a three year school. There wasn’t much of a transition because we were working at least 40 hours a week on the wards as seniors. As an educator, which came later, I welcomed the programs for transition. Keep up the good work. We don’t want disillusioned graduates of programs to change careers because of the unreasonable demands on new graduates

Comments are closed.

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