Elsevier

Journal of Health Economics

Volume 20, Issue 5, September 2001, Pages 677-701
Journal of Health Economics

Improving nurse retention in the National Health Service in England: the impact of job satisfaction on intentions to quit

https://doi.org/10.1016/S0167-6296(01)00092-3Get rights and content

Abstract

In recent years the British National Health Service (NHS) has experienced an acute shortage of qualified nurses. This has placed issues of recruitment and retention in the profession high on the political agenda. In this paper, we investigate the determinants of job satisfaction for nurses and establish the importance of job satisfaction in determining nurses’ intentions to quit the NHS. We find that nurses who report overall dissatisfaction with their jobs have a 65% higher probability of intending to quit than those reporting to be satisfied. However, dissatisfaction with promotion and training opportunities are found to have a stronger impact than workload or pay. Recent policies, which focus heavily on improving the pay of all NHS nurses, will have only limited success unless they are accompanied by improved promotion and training opportunities. Better retention will, in turn, lead to reduced workload.

Introduction

For many years the British National Health Service (NHS) has faced substantial difficulties both in recruiting school-leavers into the nursing profession and retaining existing nursing staff. The profession is often described in the media as being in a state of ‘crisis’, as demonstrated by a considerable shortage of trained nurses in many NHS hospital trusts. This has led to increased concern, both in the profession and within government, about whether the stock of trained nurses is adequate to meet the future health service needs of an ageing population (see Buchan et al., 1997, Department of Health, 1995, Seccombe and Smith, 1996, Seccombe and Smith, 1997).

The extent of the recruitment and retention problems are considerable. Between 1987 and 1995 intakes to nurse training fell between 19,600 and 14,200 per annum (Seccombe and Smith, 1997), while an investigation of the 1991 Census showed that only 68% of those of working age with nursing qualifications in England were actually working in the profession. The remainder were split between working in another profession (16%) and out of paid work (15%) (Lader, 1995). Turnover in the NHS currently stands at over 14% per annum for registered nurses (RGNs), but is far higher for nurses who have recently completed their training (Gray and Phillips, 1996, Seccombe and Smith, 1997).1 Recent evidence on latent turnover supports these figures, with around 40% of nurses expecting to leave the NHS within the next 3 years (Beishon et al., 1995). The fact that turnover is highest for nurses under 35 years of age is an important economic issue, considering the average cost of £50,000 that British taxpayers pay to train a RGN. Moreover, it costs as much as £5000 for a NHS hospital trust to replace a core staff nurse (Gray et al., 1996, Buchan and Seccombe, 1991).

The result of poor recruitment and retention is that many NHS hospitals have been forced to operate with vacancy rates for RGNs of up to 20%, which in 1996 amounted to a national vacancy rate of around 6600 whole-time posts (Review Body for Nursing Staff, 1997). More recent estimates place the nursing shortage closer to 15,000 (Hancock, 1999). In the worst cases, staffing shortages have caused ward and operating theatre closures (Audit Commission, 1997). Hospitals trusts have responded to these develops by increasingly relying upon nursing agencies and temporary bank nurses to meet their immediate staffing requirements, as well as recruiting directly from overseas. These trends have raised serious concerns about the quality of patient care in the NHS.

The recognition of the increasing need for and dwindling supply of new entrants into nursing has focused attention on the retention of existing staff. Nurses have reported widespread demoralisation linked to increased workloads, excessive working hours and poor pay and promotion prospects since the introduction of the ‘internal market’ in the health care reforms of 1991 (Seccombe et al., 1994, UNISON, 1996). In 1995, for example, 85% of staff nurses reported working excess hours (with 25% working between 5 and 9 extra hours, and 15% working 10 or more extra hours) and nearly 80% of those working overtime gained no financial compensation (Seccombe et al., 1995). In a national survey of NHS nurses in 1994, Beishon et al. (1995) found that only 32% were satisfied with their pay and just 20% with their promotion prospects. In terms of non-pecuniary job elements, less than one-in-three nurses reported to be satisfied with their workload and only one half reported satisfaction with their working hours. Recent policy attention aimed at improving nurse retention has focused on pay and working conditions. Yet little is known about the relative impact of these different factors on the job satisfaction and retention of nurses.

In this paper we investigate the impact that such policies may have on improving retention in the NHS. Firstly, we examine the factors that determine job satisfaction in the nursing profession. Specifically, we quantify the impact of individual, job and employer-related characteristics on job satisfaction amongst nurses for the first time. Secondly, we model the relationship between job satisfaction and intentions to quit the NHS. Here, Principal component analysis (PCA) allows us to identify the relative effect of improved pay, increased promotion and training opportunities, reduced workload and better workplace relations (with colleagues and patients) on retention. Our data source is a large and unique national survey of NHS nursing staff collected in 1994. We adopt the methodology used by a small, but growing literature, that combines economics and psychology to investigate the causes of labour market behaviour. Overall, our aim is to identify effective ways in which the nursing profession, government and hospital trusts might promote retention by improving the job satisfaction of nurses.

The paper is set out as follows. In Section 2 we review the recent literature that has investigated the determinants of job satisfaction and the relationship between job satisfaction and quitting behaviour. Section 3 introduces our data source, describes the particular characteristics of our nurse sample, and provides a preliminary analysis of the relationship between job satisfaction and intentions to quit. Our models of job satisfaction and the corresponding results are discussed in Section 4. Section 5 presents a simple model of quitting and the empirical estimates. We conclude the paper in Section 6.

Section snippets

The determinants of job satisfaction

Following the seminal work of Hamermesh (1977) and Freeman (1978) economic studies of job satisfaction have considered the workforce as a whole (e.g. Clark, 1996, Clark and Oswald, 1996), and analysed professional groups such as lawyers (e.g. Laband and Lentz, 1998) and academics (e.g. Ward and Sloane, 1999).

A variety of personal characteristics have been found to have significant effects on reports of job satisfaction including gender, race, age, marital status, children and education. Studies

Data

Our data is drawn from a 1994 national survey of NHS nursing staff conducted by the Policy Studies Institute for the Department of Health. The data were gathered from postal questionnaire responses to a one-in-three stratified sample of permanent nursing staff from a set of 91 NHS employers in England.4 This survey represents the most comprehensive source

Empirical framework

The general framework adopted by the studies highlighted in Section 2, is to define an individual’s utility from working as10U=u(Y,H,RY,IND,JOB,EMP)where Y is the absolute wage and H the number of hours worked. Utility from work is assumed to be positively related to wages, and negatively related to working

A simple model of quitting intentions

Given the cross-sectional nature of our data, the model of quitting behaviour we estimate is most similar to Laband and Lentz (1998). Since we are not able to track nurses over a period of time and observe their actual quitting behaviour, we use information on nurses’ intentions to quit in the 3 years following interview. The question which then arises is “How good a predictor of actual quitting is intended quitting?”. To answer this question, we rely on a longitudinal study of 1400 NHS nurses

Conclusion

There is currently an acute shortage of qualified nursing staff in NHS hospitals. The most recent estimates place this shortage at 15,000 FTE posts, which is the result of both a failure to attract sufficient numbers of school-leavers into the profession and the poor retention of existing qualified nurses. In this paper we focus on the retention problem and address the question of how to improve the long-term supply of trained nurses in the NHS. We do this by examining the factors that

Acknowledgements

The authors are grateful to Thomas Bauer, Rob Euwals, Magnus Lofstrom, Steve Pudney, Steve Thompson and Stephen Wheatley Price and participants at the EEA Annual Conference (Bolzano, 2000), the CEPR Summer Symposium in Labour Economics (Ammersee, 2000), staff seminar participants at IZA and the universities of Essex and Leicester and two anonymous referees, for valuable comments. We would also like to thank the PSI and Department of Health for providing access to the data. The usual disclaimer

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