Why Hospitals Should Outsource Recruitment
- 69 percent of health systems currently outsourcing all or part of their revenue cycle management, with examples such as Allina Health moving thousands of its IT and finance staff to an external partner.
- The reason why recruiting is one of the last major activities that most systems still insist on carrying out in-house, and the actual cost that this decision is bringing them.
- The figures currently show that costs are as follows: on average, each hospital has 43 nursing positions still open, it takes 78 days to fill a position for an experienced nurse, and $60,090 is lost for every registered nurse who resigns.
- The same reasoning that has already been used as a justification for outsourcing IT and the revenue cycle reasoning based on specialized expertise, continuous capacity, and the fact that no single system can staff such functions alone, can just as readily be applied to talent acquisition.
- The improvements in fill rate and time-to-fill that a structured, technology-enabled recruiting partnership has achieved on a large scale are greater than those typically obtained by internal teams on their own.
In May 2024, Allina Health moved about 2,000 of its information systems and revenue cycle management employees to Optum; a year later, the company achieved an improvement in operating performance of $344 million. Care New England did the same by transferring almost 160 of its IT staff to Kyndryl. Our partner Adventist Health restructured its organisation around 750 positions, including 300 corporate ones, with a large part of the changes relating to functions that the company had decided it no longer needed to carry out itself.
They are not organizations in difficulty seeking a last resort. Rather, they are big and well-organized health systems taking a deliberate decision to have certain functions carried out by a partner who specializes in nothing else, since the scale that such a partner can achieve is beyond what a single hospital could reach on its own. Revenue cycle management is the most evident case in point. The 2026 Guidehouse and HFMA Revenue Cycle Trends report states that 69 percent of health systems now outsource all or part of RCM, including 67 percent for the follow-up and collection of accounts receivable, 50 percent for coding, and 39 percent for denial management. The same trend has applied to IT, the supply chain, food service, environmental services, and even some areas of finance and HR.
Recruiting Is the Function Most Systems Still Build Themselves
Consider the range of services that a large hospital system currently outsource such as billing, claims editing, network infrastructure, custom surgical packs, linens, and security. Then look at the functions that usually remain in-house: those responsible for carrying out the duties that keep the hospital operating initially.
It is worth looking at that option since recruitment is not a minor or low-risk aspect of hospital operations. The 2026 NSI National Health Care Retention and RN Staffing Report, which is based on data from 527 hospitals in 40 states, shows that the average hospital has 43 unfilled registered nurse positions and takes an average of 78 days to recruit an experienced nurse, the length of time varying from 56 to 102 days depending on the specialty and the market. The national rate of registered nurse turnover is 17.6 per cent, and each nurse's departure costs the hospital an average of $60,090, which amounts to about $5.19 million in annual losses due to turnover per hospital. Turnover in behavioural health, emergency, and telemetry nursing is even higher, ranging from 19.5 to 22.5 per cent.
The figures aren't low. According to NSI's own estimation, a single percentage point of turnover amounts to about $295,000 per year for a hospital's bottom line. However, the recruitment of staff in positions most affected by these costs, such as ICU nurses, surgical techs, revenue cycle staff, and increasingly physicians and advanced practice providers, is generally carried out by an internal team that is also in charge of HR compliance, onboarding, benefits administration, and any other matters that turn up on the department's desk that week.
Hospital RPO Applies the Same Logic That Already Justified IT and Revenue Cycle Outsourcing
The argument for outsourcing revenue cycle management was based on a straightforward idea: no single hospital finance department is able to develop the level of specialized knowledge, technology, and consistent capacity that a specialized RCM partner can provide to thousands of accounts spread across many different clients. This is also true when it comes to recruiting, if we are to judge by the situation, since a large health system is not employing people for just one kind of position. Instead, it is hiring ICU nurses, pharmacy techs, revenue cycle analysts, environmental services staff, and doctors, often at several different facilities, all at the same time, in a labor market where there are few qualified candidates and in which every other health system is also trying to recruit from the same group.
Healthcare RPO uses the same level of specialization in recruiting as revenue cycle partners do with billing by employing dedicated recruiters, using specially designed technology, and adopting a process that operates continuously rather than only responding to needs. In the case of healthcare systems that depend heavily on travel nurses and locum providers, outsourcing recruitment based on a traveller reduction strategy, replacing high-cost staff with permanently sourced personnel, has resulted in savings amounting to between $750,000 and $1 million for each group of ten travellers who are converted to permanent staff.
The improvements can be measured in the same way that those in RCM outsourcing can be measured. In a particular tech-enabled RPO engagement, the fill rate rose from 10.9 per cent to 24.7 per cent, the average time taken to fill positions was reduced by 12 days for similar roles, and the system regained the equivalent of 19 full work-weeks of recruiter time, which had previously been used on manual screening. Coordinator roles for health units were filled 23 days faster, nursing roles 16 days faster, and pharmacy tech roles 13 days faster.
The Case for Outsourcing Recruiting Mirrors the Case for Outsourcing Everything Else
Hospital billing has come to rely on revenue cycle partners since scale and specialization lead to better results than any one finance department can achieve when working by itself. The same situation applies to recruiting. Although a big health system's in-house talent acquisition team is usually not lacking in either talent or effort, it lacks the specialized, high-volume, continuously available capacity that recruiting now requires, which is the same kind of gap that has already caused billing and IT to turn to external partners.
Hospitals didn't choose to outsource either revenue cycle management or their IT infrastructure since their own teams were not working well; rather, they realised that certain problems are large enough and specialised enough to be more effectively dealt with by a partner that has been specifically designed to handle such problems, and the situation facing a multi-facility health system when recruiting across a large number of clinical and non-clinical specialties and having to compete for a shrinking labour pool is just as well described.
If you're trying to work out where recruiting should fit in your system, why not speak to a member of the Hueman team about what a structured recruiting partnership might be like for your organization?
