Knowledge & Insight

Agency staff costing NHS dear

Fri 12 June 2015

A recent report by cross-party think-tank Civitas has highlighted the enormous strain that agency staffing costs are placing on NHS funding resources. Civitas states quite clearly that current spending patterns are highly inefficient, citing the disparity between the cost of an agency nurse at around £25 per hour (equivalent to approximately £50,000 per annum) compared to an NHS band 5 nurse who would earn a salary of between £21,478 and £27,901. It’s a similar story with doctors. NHS consultants earn between £75,249 and £101,451, yet the NHS is typically charged around £1,760 a day for an agency consultant. This translates to a full-time salary of over £450,000 – more than four times that of a similarly qualified NHS employee.

Lack of investment in training is the root cause

Although senior NHS executives clearly recognise this issue, find a rapid solution is no simple task. Healthcare executive search and the recruitment of medical professionals from agencies is an absolute necessity if service providers are to attract the talent they need to meet patients’ requirements. Yet this reliance on agency staff has arisen because of a longstanding lack of investment in training and education, which has led to the current shortfall in suitably qualified staff. The allocation of greater funding to support sufficient training will require some bold decision-making at the most senior levels.

A broad range of benefits for the health sector

It’s clear that more investment now will lead to cost savings in the years to come. Yet investment in training could deliver a far wider range of benefits than just budgetary. A rise in the number of qualified professional would increase competition for the most popular medical placements, and encourage more medics to explore alternative areas that are currently suffering the greatest shortfall in recruitment, such as A&E. There’s also a potential benefit for medical staff, as although many agency professionals currently enjoy lucrative contracts, many are likely to place greater value on the security of a permanent role and the enhanced career opportunities that come with a full-time position. This may not seem sufficient to off-set the high pay rates for agency staff, but as many agencies earn a significant margin, the very high costs to the NHS don’t always translate directly to very high day rates for medics.

No short-term solution in sight

Of course, even if further investment is forthcoming, the shortage of skilled medical professionals won’t be solved overnight, and in the short to medium term, it seems inevitable that the NHS will continue to pay high fees to ensure service provision is not compromised. NHS Executives therefore face a conundrum about how best to spend their budgets. They must find a balance between meeting demand today, which requires a significant level of agency staff, and efficient delivery of services in the future, which means gradually reducing their reliance on agencies. To find such a balance, the NHS requires seasoned leaders with the experience and vision to find a way forward.

Healthcare executive search

Stone Executive is a well-respected healthcare executive search firm with a strong track-record of identifying and attracting leading talent for a wide range of public and private sector healthcare clients. Our healthcare headhunters are experts in healthcare executive recruitment, boasting a professional network that spans NHS trusts, Strategic Health Authorities, private hospitals and some of the brightest talent in the sector, both in the UK and overseas.

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