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The Back Office in Healthcare Staffing: Cost or Revenue Center?

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Healthcare staffing organizations categorize their front and back office teams as cost or revenue for planning. Unfortunately, this can lead to unequal resource allocation, favoring “revenue producers.” Their needs can be seen as more crucial to the organization than those of the back office. Let’s explore front and back office roles in healthcare staffing and why both contribute to revenue. 

In healthcare staffing, front office activities like recruiting and sales are often labeled revenue producing. These are the teams that bring the business in the door, engaging clients and the clinicians. They are the relationship starters, and prioritize high customer satisfaction. Without them it would be difficult, if not impossible, to keep the doors open!  

Conversely, the back office, handling tasks post-offer acceptance, supporting clinicians, is often seen as a cost center. They handle credentialing, payroll, housing, and time keeping, to name a few. These tasks incur costs to ensure clinicians start assignments on time. Without them it would be difficult, if not impossible, to keep the doors open!

The impact of only allocating funding to clear revenue producers

Often, in healthcare staffing spaces, more funding is allocated to the revenue producers. This is for things like leadership development, resources and tools, onboarding and ongoing training, and headcount. 

Here is a quick look at the impact created when funds are allocated disproportionately to the front office vs the back office:

Leadership development spend:  

  • Front office: An emphasis on internal training and leadership development for sales and recruiting, with much more spending on external resources like conferences and workshops.  
  • Back office: Limited resources, which impacts competency alignment with organizational goals, and forcing them to rely more on self-development and on the job learning via trial and error.

Investing in resources & tools: 

  • Front office: Involves prioritizing tools for efficiency, like technology for job matching, sales funnel tracking, or VMS integrations.  
  • Back office: Insufficient investment may result in more manual processes and decreased work quality. A lack of visibility and creating workarounds increase costly errors.

Onboarding & ongoing training: 

  • Front office: Robust onboarding through classroom education, mentoring, and continuous skill development. Clearly outlined KPIs and access to educational materials.
  • Back office: Reliance on shadowing and self-learning potentially affects job proficiency, which can create a negative domino effect impacting all areas of a healthcare staffing business.

Focusing on head count:

  • Front office: More spending on experienced team members, possibly leading to higher compensation packages. Allocation of higher headcount to keep bringing in new business. 
  • Back office: Hiring less experienced and smaller teams with high workloads, and increased potential for burnout and jealousy of attention the front office receives.

Why it’s important to invest in both front and back office teams

Another example of a disproportionate number of resources being provided to the revenue producers is the way team members are incentivized may differ significantly. This difference can be evident when looking at commission and recognition programs. Here is a quick look at the potential impact:

Incentivizing workers with commissions

  • Front office: Commission-based incentives for high engagement and satisfaction. Gives teams direct control of individual success and goal setting.
  • Back office: Traditionally not incentivized by commission, leading to stress and disengagement. Workloads are dictated by front office productivity and if not balanced can create turnover of high performers.

Creating recognition programs

  • Front office: Recognized for performance with awards tied to business, promoting excitement and healthy competition.
  • Back office: Limited eligibility for recognition programs, often subjective and unclear.

It’s important to recognize that without both teams it would be difficult, if not impossible, to keep the doors open. Thankfully, many organizations have found ways to support and incentivize all teams! Organizations that have not yet figured out how to find the balance between allocating spending to the front and back office can experience broken relationships amongst these teams. This happens because of inaccurate perceptions, minimizing team member contributions, and lack of camaraderie amongst the teams. (Which ultimately leads to lost funds and time-intensive revamping efforts.)

Recognizing that strict categories between revenue producers and cost centers can lead to an unintentional lack of support for the back office teams is the first step to fostering cohesion and creating a more collaborative culture within your organization. 

In a nutshell, it doesn’t matter how your front office and back office teams are categorized. What matters is that all teams have the resources and tools needed to be successful and that they are recognized and feel appreciated for the work they do.

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