This Year it Goes Beyond Healthcare Executive Pay: Top Five Concerns for Healthcare Boards in 2021
Originally published in the Pearl Meyer KNOWLEDGE EXPERT Section
Employers across the country faced unprecedented turmoil in 2020 and residual effects continue. This was spearheaded by the emergence of the coronavirus, followed closely by significant economic challenges and a renewed, but more passionate focus on racial and social equality. Healthcare has been among the industry sectors most impacted with a proverbial double whammy: an incredible strain and risk imposed on its workforce caring for those with the virus, and the curtailing of elective, non-urgent medical services. The result is an overwhelmed staff and management teams facing rising costs and lower revenues.
These persistent challenges have required strong executive leadership and a board ready to provide timely support and guidance in the face of great uncertainty. In doing so, healthcare boards—like boards among public and private companies—have seen their oversight expand into areas that may not have traditionally had board purview. In fact, expanding the role of the board, and in particular the compensation committee, into broader talent management issues has been trending upward for several years.
With an elevated risk of a disenfranchised workforce, as well as a more urgent need to ensure a work environment that embraces diversity and equality, we expect to see a continued expansion of the board’s role in ensuring short- and long-term organizational success through the acquisition and retention of talent at all levels of the organization. And while we expect the board to assert itself in these complex workforce management matters, we expect that a collaborative and trust-based approach with executive leadership will yield the most positive results.
Within the context of greater board involvement and the reassessment of business and talent management strategies, accelerated by the impact of the pandemic, we expect the following to be key areas of focus in 2021:
- The engagement, retention, and mental health of the workforce;
- Business strategy, alignment of compensation, and financial recovery and transformation;
- Goal-setting for insurers;
- The need to more actively manage risk; and
- A focus on the post-COVID-19 renewal of the strategic board.
Many of us continue to feel extreme levels of uncertainty and risk in our personal lives and, to varying degrees, in our professional lives. Nowhere are these two stressors more intertwined than in healthcare. Although it takes a back seat today to physical health concerns, as direct care staff, managers, and leaders continue to experience constant stress, lack of control, and daily changes amidst the crisis, we expect burnout, an associated exodus from the industry, and significant mental health issues to emerge. As leaders think ahead to all aspects of post-pandemic recovery, taking all-encompassing care of the workforce will be a primary next-stage issue.
Given the unprecedented challenges that care providers have faced, it is imperative the workforce receives special attention and recognition. Boards should be, if they are not already, clearly stating this expectation to senior leadership and monitoring “organizational health” measures like unwanted turnover, open positions, understaffing, levels of engagement, unionization initiatives, and mental health claims. The impact of the pandemic on the workforce as a whole, and the criticality of the workforce to any organization, elevate this beyond a moral concern. It is, at a most basic level, a risk issue.
At the leadership level, any ongoing talent development initiatives taking place—particularly in care provider organizations—likely focus on “normal” leadership skills and CEO succession planning. However, what will be needed in the very near future are leaders who recognize the value of building “softer” skills and capabilities throughout the organization, for example recognizing the value of those who excel at reducing stress and anxiety, and rewarding and advancing those who can become better coaches and supporters of their teams.
Boards should begin preparing for the fact that further and more significant investments of time and money will need to be made on workforce health issues and that those investments will need to be sustained over time in order to retain staff. This focus took root early in 2020 with numerous examples such as additional pay to those required to quarantine and not work to protect the public, coworkers, and patients; or “hero” pay, special bonuses, and/or enhanced hourly pay for critical shifts. These are assumed to have been temporary, episodic, and short-term. However, the longer-term questions about the healthcare employer’s obligations to its staff, including mental health counseling and recovery support, wellness benefits, advanced safety processes, and more add significant new variables to a provider’s total compensation plans and are demanding attention.