Nurses' retention and hospital characteristics in New South Wales, CHERE Discussion Paper No 52

NURSES’ RETENTION AND HOSPITAL CHARACTERISTICS IN NEW SOUTH WALES

Expenditures on visiting medical officers (VMOs) reduce retention by a large amount although the
effect is only marginally significant. Anecdotal evidence suggests that increased usage of VMOs tends
to increase the stress level of nurses and reduces the training component of the nurses’ job. To
illustrate the size of this effect, an increase of 25% in current levels of expenditures on VMOs would
increase the quit rate of nurses in a year by almost 9 ppts.

It is often argued that a major factor in high nursing quit rates is high workloads. Our results suggest
that how this workload is measured matters. From Table 4 we saw that total separations per nurse
and high cost procedures per nurse tend to reduce retention while baby separations per nurse and
emergency admissions per nurse tend to increase retention. The results in Table 5 show that simply
increasing the nursing staff while keeping the workload and the workload mix constant does raise
the probability of retention but only by a small and insignificant amount.¹⁵ From a policy point of view,
this suggests improvements in the “problem” areas of the nurses’ work rather than simply
increasing the level of staffing.

The effect of increased non nurse staffing is surprising. All three other measures of hospital staffing,
non nurse clinical equivalent full-time (EFT), non clinical EFT and VMO expenditures, have negative
impacts on retention of RNs. In many production settings, the signs of these effects could be
evidence of input substitution. In the case of RNs and other clinical non-nurse staff, it is possibly
substitution to enrolled nurses and nurse assistants. Again, more detailed information at the hospital
level would be needed to help clarify these issues.

The calculation of marginal effects is useful in quantifying the impacts of the personal and job
characteristics discussed previously. The average effect of being male is a decrease in the probability
of retention of approximately 5 ppts, while being UK born reduces the probability by approximately 3
ppts. The negative marginal effect of not being a permanent resident is startlingly large at 20ppts but
is not significant. The average effect across the sample of ageing each nurse by one year is an
increase in the average predicted probability of retention of approximately half a ppt (0.005). Post
basic qualifications and achieving promotion to clinical job classification increase retention by 1.3 ppts
and 2.6 ppts respectively. These results illustrate the importance of career advancement in the
nursing profession.

15 When increasing nursing staff, the level of expenditures on nursing is increased by the average nursing expenditure
per nurse to allow for costs to rise along with the level of staffing.

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