Future in Flux: Intel for the Healthcare Executive

In brief:

• Through a survey of 115 healthcare leaders, we’ve identified the industry’s trends, challenges, and opportunities in 2022.
• Our research indicates industry players are focused on optimizing talent and enhancing operations to ready their organizations for growth. They also intend to integrate technology and digital capabilities/tools into their organizations to drive business performance. 
• To capture these opportunities, healthcare leaders should:
  1. Shift their workforce planning and forecasting approach to anticipate changing talent and skills needs.
  2. Prioritize regular reskilling and upskilling. 
  3. Implement agile practice to build flexibility into their operating models. 
  4. Establish a Transformation Value Office to support transformation objectives. 

In December 2021, North Highland surveyed more than 500 business leaders across industries, exploring their thoughts on the trends and challenges expected in 2022. While each industry had specific focuses, one takeaway was consistent across the board: The future is very much in flux, and business leaders must learn to be flexible. This blog series explores the insights from the study, offering the advice you need to capitalize on the trends and build agility for a fast-paced, quickly changing future. 

Getting the house – workforce and operations – in order

According to our 2022 transformation trends survey, 48 percent of healthcare leaders say they are facing pressure to evolve, grow, and drive better financial outcomes in 2022, and another 44 percent hope their transformation strategies will allow them to overcome ongoing pandemic uncertainty. 

Planning for transformation in the months ahead, leaders are focused on “getting their houses in order:” directing their attention internally toward the workforce and operations to position their organizations for continuous transformation and adaptation. For healthcare leaders, two clear themes emerged in our research: Optimizing talent and enhancing operations for growth, regardless of future conditions.

In this blog, we share tactics to help industry decision-makers take advantage of these trends to secure continued growth, both now and in the future.  

A new take on managing talent

Healthcare leaders are looking to level up their talent and leadership strategies this year. In our survey of industry executives, the top three transformation objectives were optimizing talent (34 percent); improving ways of working (32 percent); and achieving leadership alignment (31 percent). All three of these goals tie to improving the way talent is managed, enhancing skills and capabilities in digital, and driving greater organizational alignment.

Leaders in healthcare—like their counterparts in most other industries—have experienced difficulties in developing and retaining talent recently. Providers are facing staffing challenges amidst a tightening labor market. Hospitals are dealing with unprecedented turnover, widespread burnout, and frequent staff absences. In January, the U.S. Bureau of Labor Statistics released job numbers showing that healthcare is among the top three industries cited in a three percent rise in the monthly "quits rate." The number of quits surged to 4.53 million for the month. Workers are reportedly leaving for better paying jobs that expose them less to COVID-19, such as positions that allow them to work from home.

Talent challenges are unlikely to abate anytime soon, and 53 percent of healthcare leaders say it’s impacting their ability to solve transformation challenges. Further, leaders say competition for top talent (29 percent) and turnover (23 percent) are obstacles to addressing their transformation challenges. What’s the solution to keeping and capturing top talent in healthcare? Our research indicates that leaders are planning to retool their workforce strategies to optimize talent in the year ahead:

• They’ll strive to better anticipate changing talent and skills needs. Just as healthcare is becoming more complex and how we manage our health is evolving, so too are the skills and talents needed to drive future innovations in the industry. Leaders in healthcare know they will need to strive to better anticipate changing talent and skills needs in the year ahead. This is a top priority for nearly every leader we surveyed, with 97 percent agreeing or strongly agreeing that successful transformation requires this mindset. For example, there’s no question that we are in an era of accelerating digital disruption in healthcare. In fact, 48 percent of leaders say digital/technology is a primary signal of change driving their transformations. But what does this mean for the talent and skills needs leaders should be thinking about for the year ahead? New technologies and digital tools have the power to transform healthcare in positive ways—think mobile applications and wearables, artificial intelligence for medical imaging, voice-based technology and robotics, virtual reality for patient data visualization, and cloud-based solutions. But the workforce must be equipped to effectively leverage these resources, and right now, leaders say technology capabilities are a barrier to adaptability (31 percent) and a barrier to improving speed to market (33 percent). In building capabilities, healthcare leaders say they hope to improve employee readiness and adoption (48 percent).
• They’ll also look to employ different workforce models and strategies to best support their business objectives. Thirty-nine percent of leaders say they will take advantage of hybrid work and lean on contract workers; 38 percent will employ a Managed Service; and 37 percent will leverage virtual delivery models to overcome labor shortages.
• They’ll aim to achieve greater leadership alignment to drive employee engagement in the year ahead. In our research, leadership alignment emerged as a vital part of healthcare transformation strategies in 2022, with 31 percent citing it as the top goal. Perhaps that’s because 29 percent of leaders say alignment is currently a barrier to flexibility and it’s what’s preventing them from improving speed to market. Without it, it’s difficult to achieve consensus across an organization. Healthcare executives know that for the workforce to drive transformation objectives, employees must clearly understand the new vision and purpose, and this happens when there is alignment at the top.

ACT ON THE TRENDS

Managing the talent pool and leveraging current recruitment trends means taking a future-focused approach to workforce planning and prioritizing reskilling/upskilling.

• Shift your workforce planning and forecasting approach to anticipate changing talent and skills needs. Predicting what’s around the corner to understand the skills your organization will need for the future is both difficult and critical. Engage in future-focused workforce forecasting and consider leveraging scenario thinking to create a vision for your workforce. Scenario thinking is all about considering several options continuously rather than becoming fixed on a singular path. As skills needs change, you’ll need a workforce that is nimble. Develop employees and bring on new hires with learning agility to create a team that readily embraces change and can help your organization move toward a promising future. Additionally, employing a Managed Service that can flex with organizational needs is a great way to get additional expertise where and when it’s needed. Managed Services enable leaders to focus on immediate needed skills and quickly change course when required.
• Prioritize reskilling/upskilling to invest in talent development. All facets of healthcare are constantly changing, from the physician workflow to organizations’ operating processes. This demands that your workforce be prepared to continually evolve and learn new ways of thinking and working. Healthcare leaders must prioritize proactive and ongoing reskilling and upskilling to arm employees with the skills to deliver and action transformation initiatives. Building the right mix of capabilities, such as tech and digital, makes it possible for your organization to adapt to rapidly changing and unpredictable demands.

Upgrading operations to build a foundation for growth

Our research indicates that industry leaders are also focused on reimagining their operating models and organizational structures to achieve their transformation objectives. Right now, healthcare leaders believe these critical aspects of their business—which serve as the foundation for transformation—are holding them back from growth: Thirty-one percent say their transformation challenges are more difficult to solve due to their current operating model/organizational structures, and 36 percent cite organizational design as a barrier to their ability to adapt.

In order to respond quickly to changes in customer and patient demands, workforce needs, and increasing competition, leaders know they’ll need to design an operating model and organizational structure that is flexible and made for change. Hardwired business operations won’t cut it amidst shifting market dynamics and technology’s rapid and significant impact on healthcare. For example, as technology continues to advance, it’s set to rewrite the rules of how industry players deliver treatment, manage patient data, and provide services. It will impact staffing, scheduling, patient flow, the supply chain, and everything in between. That means healthcare players must have agile operations that can adapt to new conditions as they arise.

Nearly half (45 percent) of healthcare leaders hope operational enhancements will also drive digital maturity. Twenty-four percent of leaders say they plan to modernize operations as part of their transformation strategies and are considering doing so through innovative approaches and automation. Leaders can also digitize operations to address one of the major factors impacting their transformation strategy: the need for greater integration of systems and infrastructure (30 percent).

ACT ON THE TRENDS

With the future in flux, an operating model should be one that can adapt.

• Prioritize flexibility to be best positioned for growth in the year ahead. Implement agile practices to build more “forgiveness” into your operating model; don’t think of your operating model as a final destination but something to continually reassess and evolve. Integrate insights into your operational strategy, and leverage data and analytics to inform operational decision-making. Ensure your operating model includes a strong digital core.
• Establish a Transformation Value Office. A Transformation Value Office (TVO) helps leaders define transformation value and maintain effective communication across operational initiatives. It helps leaders prioritize the operational changes that will best support their transformation objectives and digital core.

Though the future is uncertain at best for the healthcare industry, leaders can build strong foundations while working through the challenges. Rethinking ways to manage talent and optimize your organization for growth will be important in 2022 and beyond. By aligning leadership and focusing on seamlessness, healthcare leaders will continue to weather the bumpy road ahead.