The demands of talent management, however, risk being obscured amid the multiple concerns of a highly challenging environment. For their own individual organizations, surveyed executives are far more likely to consider other issues besides talent to be more pressing. In particular, the shift from fee-based to value-based payments and rising healthcare costs are listed as “very” or “extremely” critical concerns at their hospitals markedly more often than the most critical personnel issue—dealing with talent shortages—let alone attracting and retaining talent itself. This ranking is consistent across the U.S.; respondents' region, hospital size and seniority make little difference.
Yet issues of strategic change and cost control are not distinct from talent management. In hospitals they are closely intertwined. According to the Harvard Business Review, some two-thirds of a typical healthcare provider's costs go toward human resources.1 Charles “Chip” Kahn, president and CEO of the Federation of American Hospitals, notes that addressing these costs in an era of tight margins is made all the harder by “tremendous pressure regarding salaries.” Meanwhile, he adds, an evolution in some fields (in particular among top physician talent) away from a traditional, largely arm's-length relationship to one of hospital as employer has both HR and strategic implications.
Thus the need to align the management of talent—especially of leading clinicians—with other strategic priorities is critical. It is also extraordinarily difficult. James Rebitzer, Professor of Markets, Public Policy and Law at Boston University Business School, explains: “[In healthcare] I don't think we fully know how to structure incentives to move individuals to do the right thing. We want to get physicians working on process improvement, to coordinate care better, etc., but the actual incentive structures in place tend to work against that. Getting them right is challenging.”