Pepperdine University Study Finds Hospital Managers Are Facing a Healthcare Leadership Crisis

Pepperdine University Graziadio School of Business and Manag

LOS ANGELES, April 2, 2013 (GLOBE NEWSWIRE) -- Findings from the 2012 Healthcare Talent Management Survey from Dr. Kevin Groves, Associate Professor of Theory and Management, Pepperdine University's Graziadio School of Business and Management and principal of Talent Management Consulting, reveals that hospital management shows that the cost to hire new workers in management roles far exceeds the cost to retain existing staff.

The 2012 Healthcare Talent Management Survey found that hospitals that do not encourage staff and leadership development spend more time and money looking for and training new employees and executives. More specifically, Dr. Groves research shows most hospitals spend about $2.45 million a year more to replace nurses who have left and train those replacements. The cost equals about four times as much spent to seek and hire new executives when compared to hospitals which nurture leadership from among their staffs.

The Healthcare Talent Management Survey is conducted annually and respondents to 2012 survey included senior HR officers from 142 of the nation's 200 largest hospitals by revenue and the largest integrated health organizations in the U.S.
Nearly all responding executives rated talent recruitment and development high on the list of their organizations' priorities. However, Dr. Groves found that the practice of recruitment and development was weak. In fact, 23% of survey respondents say their boards do not use pay incentives to encourage their top chiefs to support "talent management."

"The data suggests that the era of endless recruiting in hospitals needs to come to a close," said Dr. Groves. "Hospitals should seek to add bench strength even beyond second string down to three or four deep in some executive positions."

Hospital organizations that used success factors such as receiving support from top management; implementing talent assessment practices and performance management processes; instituting a culture of leadership development; and using pay and onboarding practices reported higher annual employee productivity -- $164,154 per full-time equivalent vs. $132,685 -- than those that made less use, according to the survey.

In particular, onboarding programs – the formal processes for socializing a new hire, especially a manager or executive, into the company culture and its priorities – has been shown to deliver measurable benefits including:

  • Increased productivity, expressed in dollars;
  • More representation of women and ethnic minorities among top hospital staff and executives; and
  • Increased patient satisfaction, as measured by the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) Survey.

Hospital systems continue to face a series of demographic, marketplace, and financial challenges that underscore the need for a comprehensive talent management process. Nearly one-third of all Americans (76 million) will reach retirement age over the next 10 years, a dilemma commonly cited by human resource professionals as the 5/50 crisis—the prospect of losing 50% of all management talent over the next five years.

The issue is further compounded by the limited number of high quality graduate programs in healthcare administration, the comparatively low hospital CEO median tenure of four years, and a general lack of sustained investment in talent management compared to other industries.

The survey gives its most detailed recommendations in the area of finding and nurturing talent:

  • Find and nurture more leadership talent among women and ethnic minorities;
  • Create processes for identifying potential leaders, and make sure those processes are "transparent" and credible; and
  • Give those potential leaders projects that tie in with the hospital's overall strategy.

The study is available for download upon request.

Dr. Grove's research will be presented at Pepperdine University's Talent Management Symposium: Leveraging Human Capital on Friday, April 19th from 8:30 a.m. – 4:30 p.m. For more information or to register for the event go to

About Pepperdine University Graziadio School of Business and Management

Founded on the core values of integrity, stewardship, courage, and compassion, Pepperdine University's Graziadio (GRAT-ZEE-ah-DEE-oh) School of Business and Management has been developing values-centered leaders and advancing responsible business practice since 1969. Student-focused, experience-driven, and globally-oriented, the Graziadio School offers fully accredited MBA, Masters of Science, and bachelor's completion business programs. More information found at

CONTACT: Douglass Gore Pepperdine University Phone: (310) 568-5580 graziadioPR@pepperdine.eduSource:Pepperdine University