Can Flexibility Fix Pharmacies? The Case for Contingent Workers

Article

It’s time for pharmacies to take a page out of the books of hospitals and tech companies by expanding and streamlining their use of contingent labor.

Discussions about the impact of COVID-19 and other factors on clinicians’ rapid exodus from the industry have, for the most part, centered on physicians, nurses, and laboratory technicians in hospitals hard-hit by surging demand. IHS Markit’s 2021 report on the looming physician gap found that by 2034, the United States is likely to need more than 100,000 additional physicians across specialties to close the gap.1

Credit: auremar - stock.adobe.com

Credit: auremar - stock.adobe.com

Meanwhile, a recent McKinsey & Co. report revealed that the country is now on track to see a 20% gap in nurse availability by 2025.2 To keep pace with demand, the report posits, the United States would need to more than double the annual number of nursing graduates for the next 3 years.

These numbers are compelling—and concerning—but they do not tell the whole story of the pandemic’s effects on the health care system. Staffing shortages have touched every part of the industry, and they’re now being felt in pharmacies across the nation.

A 2021 survey conducted by ASHP revealed that one-third of pharmacy technicians who left their roles that year did so because of the impacts of COVD-19.3 And for pharmacy technicians, pandemic strain has been exacerbated by ongoing shortages of critical medications as well as increasing pressure on already-strapped teams who often feel underpaid and undervalued in the workplace.

As a result of these feelings, the majority of administrators experienced technician turnover rates between 21% and 30% in 2021—despite the report’s finding that on-the-job satisfaction was relatively high overall (56%).3 The same report found that 97% of health-system pharmacy administrators increased their use of overtime to fill shifts, and nearly 90% used pharmacists to supplement technicians.3

With “not having enough time” and “not having enough staff” cited as the top challenges technicians face on the job (36% and 35%, respectively), followed by compensation concerns (26%), the above procedures are clearly taking a toll on workers.3 Add to that the concern they must feel when resource constraints affect their ability to provide their patients with critical medications in a timely manner, and it’s no wonder that many pharmacy technicians feel overwhelmed by the job.

While overcoming these obstacles may not be easy, the solution may be simpler than many currently think. It’s time for pharmacies to take a page out of the books of hospitals and tech companies by expanding and streamlining their use of contingent labor.

Times are changing

Short-term engagements have long been commonplace in hospitals. Once seen as a kind of necessary evil to help facilities through difficult times, these arrangements became firmly entrenched in the industry’s fabric throughout the pandemic years.

Staffing Industry Analysts’ May 2022 US Staffing Industry Forecast estimated that the health care staffing market grew 85% in 2021 alone, hitting $39.8 billion.4 Although the report indicates that growth rate is likely to moderate somewhat in the coming years, the number of contingent workers on payrolls is unlikely to shrink alongside it.

There’s a reason that the popularity of contingent work has exploded in recent years—plenty of them, actually. There is, of course, workers’ desire to find more work-life flexibility, fueled by years of remote meetings and work-from-anywhere policies. Similarly, the shifting perception of what makes a “good fit” among workers has set many on a path toward reimagined employer-employee dynamics, which many have found in contract work.

But these worker benefits alone cannot account for employers’ rapid embrace of extended workforces. The financial and operational benefits to businesses have also fueled the expansion of the market, which is likely surprising news to health care administrators that watched operations costs rise alongside the number of contingent employees on their payroll.

In reality, strengthening contingent labor programs can be extremely beneficial to employers looking to cut costs—and may help managers do it without sacrificing quality or headcount. To get started, though, pharmacy administrators may need to shift their perspective on what it means to embrace contingent labor, as a holistic approach underlies businesses’ success with the model. To get started, administrators may want to:

Invest in an integrated platform

The first step is investing in technology that supports the new reality of contingent work. Traditionally, contingent workers have been managed in an ad-hoc manner and by whichever department hired them.

By approaching contingent and full-time staff holistically, managers can make more strategic decisions about labor allocation and beyond, informed by a comprehensive view of all workers—not just full-time staff. This is especially useful for pharmacies that are part of larger organizations such as retail stores or hospitals because it can help contextualize the pharmacy department’s operations within the larger organization.

Let intelligence lead

Strategic labor management depends on insight into current markets. With many technicians citing salary concerns as a top challenge of the job, it’s critical that administrators keep their finger on the pulse of current market rates for different types of candidates as well as the current market outlook for bringing on new talent.

Having a source of truth for talent and market intelligence allows managers to make smarter decisions that can aid retention, redeployment, and recruitment efforts in even the most challenging markets.

Develop direct sourcing

For decades, staffing firms have acted as a middleman between employers and contingent workers, but there are ways to bring more hiring in-house. Armed with critical intelligence data and an integrated management system, managers will be able to transition to a direct-sourcing model for contingent labor, allowing them to have full control over the process, leverage their brand to engage workers, and curate new talent pools that better meet the business’ unique needs.

Direct sourcing also drives significant cost savings because it helps employers avoid staffing agency fees, freeing up critical resources for other initiatives.

Capitalizing on contingent candidates

The diverse benefits that come with expanding the contingent workforce within pharmacies make it a compelling solution to the industry’s current challenges. When built with an eye toward vendor-neutrality and intelligence-led decision-making, this model has the potential to alleviate burdens on management while addressing the concerns that are top of mind for employees—an unfortunately rare combination in business.

Regardless of industry, employers who develop a holistic and strategic contingent workforce management program often see a diverse range of benefits. Consolidating processes can ease administrative tasks for employers and employees alike, reducing the ever-increasing workloads that are driving talented technicians from the field.

It also can help highlight areas of opportunity to reallocate responsibilities or adjust staffing procedures to alleviate strain on teams and illustrate team skills gaps to optimize recruitment. Equally importantly, it can even uplevel worker experience programs by helping contingent employees feel like an extension of the full-time staff rather than an outsider looking in—something that will be critical as the contingent workforce continues to expand.

Although the change won’t happen overnight, the pharmacy administrators that act now to adjust their staffing models will be taking steps to strengthen their business today to ensure their communities have access to quality care tomorrow. It will help set the profession on a path to success regardless of what the future holds for health care by helping to address at least one of the many uncertainties the industry now faces.

About the Author

Maria Luoni is president of RightSourcing.

References

1. The Complexities of Physician Supply and Demand: Projections From 2019 to 2034. IHS Markit Ltd. Washington, DC: AAMC; 2021.

2. Berlin G, Lapointe M, Murphy M, Wexler J. Assessing the lingering impact of Covid-19 on the nursing workforce. McKinsey & Company. Published May 11, 2022. Accessed April 12, 2023. https://www.mckinsey.com/industries/healthcare/our-insights/assessing-the-lingering-impact-of-covid-19-on-the-nursing-workforce#/.

3. Pharmacy technician shortage survey findings executive summary. American Society of Health-System Pharmacy. March 2020. Accessed April 12, 2023. https://www.ashp.org/-/media/assets/pharmacy-technician/docs/Technician-Shortage-Survey-Exec-Summary.pdf

4. SIA projects that at least one healthcare segment will continue to see growth for 2022. Staffing Industry Analysts. Press Release. May 9, 2022. Accessed April 12, 2023. https://www2.staffingindustry.com/Editorial/Healthcare-Staffing-Report/May-12-2022/SIA-projects-that-at-least-one-healthcare-segment-will-continue-to-see-growth-for-2022

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