The employee/employer relationship is changing; employee engagement is at an all-time low, and countless research studies tell us that a significant proportion of the workforce is considering quitting their jobs. At the same time, despite the economic backdrop, many companies are struggling to get the talent they need due to significant skill shortages in some areas.
So how can employers differentiate themselves and secure and retain the talent they need? A positive work culture has never been more critical and is a strong differentiator for employers focusing on building one.
My guest this week is Lori Knowles, Chief Human Resources Officer at Memorial Hermann Health System. Memorial Hermann has had some spectacular hiring and retention outcomes in a highly challenging talent market by focusing on their culture. In our discussion, Lori talks us through the five levers they use to drive culture and the results they are getting.
In the interview, we discuss:
• The current talent challenges in the healthcare sector
• How does workforce flexibility work in healthcare
• Being strategic with just-in-time staffing
• The changing employer/employee relationship
• Employee experience and the moments that matter
• Culture, community and mission
• The five levers that drive culture
• Results and impact on hiring and retention
• The role of technology and AI
• The vision for the future.
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Transcript:
Matt Alder (2m 19s):
Hi there. This is Matt Alder, welcome to Episode 527 of The Recruiting Future Podcast. The employee-employer relationship is changing. Employee engagement is at an all-time low and countless research studies tell us that a significant proportion of the workforce is considering quitting their job. At the same time, despite the economic backdrop, many companies are struggling to get the talent they need due to significant skill shortages in some areas. So how can employers differentiate themselves to secure and retain the talent they need?
Matt Alder (3m 0s):
A positive work culture has never been more critical and it’s a strong differentiator for employers focusing on building one. My guest this week is Lori Knowles, Chief Human Resources Officer at Memorial Hermann Health System. Memorial Hermann has had some spectacular hiring and retention outcomes in a highly challenging talent market by focusing on their culture. In our discussion, Lori talks us through the five levers they use to drive culture and the results they’re getting. Hi, Lori, and welcome to the podcast.
Lori Knowles (3m 35s):
Hi, Matt, great to be here. Thanks for having me.
Matt Alder (3m 38s):
An absolute pleasure to have you on the show. Please, could you introduce yourself and tell everyone what you do?
Lori Knowles (3m 44s):
Happy to. I am Lori Knowles. I am the Chief Human Resources Officer at Memorial Hermann Health System, that’s in Houston, Texas. Memorial Hermann is a large integrated health delivery system. We have 17 hospitals, about 32,000 employees, 300 different care delivery sites. So really large in a very, very large geographic area. In my role, I’ve been at Memorial Hermann, gosh, almost 12 years now, but doing, doing HR for a lot longer than that.
Lori Knowles (4m 25s):
And in my role in human resources, I know every organization is set up a little different, so I have oversight of sort of the typical areas, total rewards, talent learning and development, talent acquisition. We actually have a central staffing model that’s a talent float pool that we may wanna get to here in a little bit. I have workforce programs, employer relations, occupational health. One thing that’s interesting about the HR structure at Memorial Hermann and that is unique probably to healthcare for those of your listeners who aren’t in healthcare, is that chaplaincy and spiritual care report up through HR.
Lori Knowles (5m 10s):
And so that’s a unique opportunity to really get a lot of different viewpoints into sort of whole person health. And so we feel very lucky to have that group in our HR family.
Matt Alder (5m 21s):
Yeah, absolutely. Really interesting stuff. Tell us a bit about the current challenges that are going on in the health sector.
Lori Knowles (5m 29s):
Sure, happy to. Well, we all know we’re coming out of Covid, but certainly healthcare was heavily, heavily influenced by Covid and the ways that many other industries were and all of us were in terms of the disruption to our lives. But particularly in healthcare, because of our role in treating covid and really being frontline workers, it was particularly difficult and had some pretty long-lasting impacts on the workforce projections in healthcare. So before Covid, there was already an RN labor, a nursing shortage if you will.
Lori Knowles (6m 13s):
There’s been a nursing shortage for at least the last 15 to 20 years. But because many nurses left the bedside during Covid because of the stress or they left nursing altogether, it has really exacerbated that workforce shortage. And then in Texas, we have one of the lowest nurse per capita rates in the country. And so it’s particularly difficult in Texas. And in Houston, we actually have the largest medical center in the world. And so we have a lot of healthcare in Houston with a lot of workforce shortages.
Lori Knowles (6m 55s):
So that’s probably primarily one of the challenges that healthcare faces. I think also healthcare, figuring out what the right role of this workforce flexibility is, remote working, you know, when you’re a direct patient caregiver, there’s no opportunity for remote work, but that doesn’t mean that the expectations for flexibility and thinking about things differently is any different. And so having to be creative I think is a challenge for sure. Workforce demographics, we’re all facing that. In healthcare, it’s exacerbated a little bit because we’ve got a lot of need at the entry-level position range and are a lot of the clinical schools aren’t equipped to process and handle the amount of students that we would need to put through that.
Lori Knowles (7m 54s):
So really thinking through what is a different way to think about staffing, roles, skills, balancing jobs, workflows. It’s really different because we cannot rely on having the number of licensed clinical staff that perhaps we’ve had in the past. So I think those are some that are specific to healthcare. Obviously, everyone who’s listening is dealing with, you know, a lot of challenges related to the social dynamics in our world today, social justice, equity, diversity and inclusion, ESG, those kinds of things are always challenges to deal with.
Lori Knowles (8m 37s):
And then I think the biggest thing that’s fundamentally shifted is this difference in employee-employer deal, if you will. And so I’m hoping we’re gonna talk a little bit more about that because our human capital strategy at Memorial Hermann is heavily based in that concept.
Matt Alder (8m 60s):
Yeah, absolutely. I mean there is so much there that we could dig into. We could be here for hours and it would all be a fantastic conversation. Let’s dig into, let’s dig into that last one as you said. Just before we do though, tell us a little bit more about your talent acquisition structure because that sounded quite interesting.
Lori Knowles (9m 18s):
Sure, yeah. So talent acquisition is made up, the way we’re structured in talent acquisition as many people are, is we are very heavily job-family and role-based. So we have six teams that focus on specific job families and, you know, sourcing, recruiting, just like all of your talent acquisition listeners out there. We also have what we call a central staffing pool. And so we have had this for about, gosh, almost 20 years now, and it’s a pool of about a thousand people at Memorial Hermann that are supplemental or per diem and pick up shifts either on a contract basis, so maybe for six weeks or 13 weeks, but they’re Memorial Hermann employees or they pick up a shift, maybe they work full-time for someone else, but they’re willing to pick up a weekend shift or, you know, a few shifts here and there, a night shift for us.
Lori Knowles (10m 18s):
And so our central staffing department recruits those people, but also manages them. So works extremely closely with all of our hospitals and our care delivery sites to figure out where we have needs and how do we do, how do we be strategic with just-in-time staffing. So, you know, if we have one hospital that is staffed to care for a certain number of patients and for whatever reason those patients, we don’t have that number of patients that day, how do we shift those employees to perhaps another area that has more needs?
Lori Knowles (10m 58s):
That group also manages all of our agency and contract staffing, so the contracts for agency workers, the bill rates, the payment mechanisms, all of that, that group manages. And then the third thing I think that’s interesting is we have a new, what we would call an internal travel pool. So in healthcare, one of the dynamics that happened during covid was the rise of the agency staff. So, you know, tremendous amount of dollars poured into agency contracts because hospital systems had tremendous needs that they had not had before for staff.
Lori Knowles (11m 38s):
And so prices just went through the roof for agency staffing. People left full-time employment to go chase that, you know, larger dollars. And so we really needed a strategy to help us combat that. And so we created what we call an internal travel pool that is a unique deal, I would say, with people who are willing to do that for a higher rate of pay. There’s a lot more flexibility required. And so we’ve been playing with that for about a year and it’s been very, very successful for us. So that is something that we see as a real advantage and something that we plan to expand.
Matt Alder (12m 18s):
And I suppose that brings us back to what you were talking about in terms of that sort of changing employee-employer relationship. Talk us through that part of things and, you know, how you are sort of, sort of facing up with dealing with some of these challenges.
Lori Knowles (12m 33s):
Yeah, so here’s the way I think about it. You know, all of us have jobs probably, and so we think about what do I want from my employer, right? If I’m from looking to make a change or maybe I’m just entering the workforce and I think, what is it that I want? Obviously, the first thing people think of is, well, you know, I need to make some decent money. I need the pay, it matters a lot. But that’s not the only thing. And I think as employers for a very long time, we focus so much on pay and benefit programs, you can’t see me, but I’m quoting programs, that we kind of miss the mark on this idea of when I go to work, it is really an experience, it’s an experience just like, you know, the experience I get in my family, the experience I have with my friends, the experience I get when I, you know, think about buying a car.
Lori Knowles (13m 28s):
It’s all those things that make me feel a certain way, make me feel valued. There’s proof points that my voice is being heard. I can be inspired by something. It’s something that I wanna be aligned with, that aligns with my values. And I think Covid, the experience of Covid really brought it all to life where we said, you know what, we can no longer just be the employer and ask the employee to leave their personal life at the door. We have to realize that what we are providing is an actual experience. How do we design? How do we think about the moments that really matter in that experience and design and be intentional about providing what people need in a much bigger way than we’ve had to do before?
Matt Alder (14m 21s):
Absolutely. And how does that feed into things like defining culture?
Lori Knowles (14m 27s):
So when you think about, for us, you know, there’s always this talk about we need to drive our culture to a certain point or we need to think about culture in a certain way. And for me, it starts with what do you wanna be? Who do you wanna be to your community? Who do you wanna be to your staff? Who do you wanna be to your leaders? And then when you pair that with your mission and your vision of your organization, your culture becomes, or the right culture becomes pretty self-evident, right? So you can’t just think about culture all by itself, it has to be tied to those things.
Lori Knowles (15m 11s):
So if, you think about, you know, Memorial Hermann’s mission, right? So we are community-owned, meaning that we are nonprofit and our community owns us. So being responsive to our community is absolutely part of who we are and what we need to do. So, okay, if we wanna be responsive to our community, what does that mean? What type of culture does that mean we need to have? Well, it means you need to be transparent. It means we need to hold ourselves to a higher standard in terms of the care we provide. It means we need to have mechanisms to hear from our community.
Lori Knowles (15m 55s):
It means we need to support our community, have clear ways to reach into our community. And so when you start to think about culture like that, it starts to become pretty evident that there are certain levers that you can pull to drive certain things, reward certain things, and then also sort of de-emphasize others, does that make sense?
Matt Alder (16m 21s):
Yeah, that does make sense. Tell us about those levers.
Lori Knowles (16m 23s):
Yeah, so the way we think about it, we think about it really as five different levers to drive culture. And I’ll talk about them in order. So the first is how we hire and how we onboard, right? You wanna think about who is it that is going to be right for your culture, not just now, but with that vision in mind, right? If you wanna be, you know, for us, our service stand, you know, we have very strong service standards and the very first one is safe. The second one is caring, the third one is personalized, the fourth one is efficient. How do you select for those things?
Lori Knowles (17m 3s):
And then if you say you want those characteristics and you select for that and you interview for that, and then you onboard and those tenants don’t show up in your onboarding, you’re saying one thing and doing something different. And I think that’s the death nail of culture, right? When you have a lot of things on a poster and then people look around and go, but that’s not what you do. And so how we hire an onboard is absolutely critical. And we’ve got a lot of work happening around that. I think the other thing is, the second one is how we lead and what we teach.
Lori Knowles (17m 43s):
So if we say that safe, caring, personalized, and efficient, are our service standards, how are we weaving that into our leadership competencies? How are we holding leaders accountable for role-modeling those behaviors? What are we teaching in our, you think about leadership development courses or even huddles, daily huddles that you have in your teams where you wanna impart information, how are you weaving those things in? And then the third one is how and what we communicate to reinforce. You know, I use this example a lot because if you say you, your voice matters, right?
Lori Knowles (18m 25s):
Your voice matters. We wanna hear from you. We have a culture of transparency, but you only do an annual engagement survey maybe once a year, and there’s really no other place for people to have their voice heard. You’re not authentic. So you’ve gotta figure out, if we say we wanna be transparent, how do we show up and be transparent? How do we ask people for their opinions? What do we do with that information? How do we do it on daily meetings, in group settings, one-on-one? So it’s carefully and, and intentionally thinking about how you communicate your forums, right?
Lori Knowles (19m 6s):
If all of your communication tools, you know, we do monthly town halls, we used to do them every week in Covid, but now we do them. If those town halls, they have myself and our CEO and others on the call, our COO, let’s just say we didn’t enable the Q&A function, let’s just say it was just one-way communication, what message does that send? So I think it’s really just sort of walking the talk is, is what I’m getting at. And then obviously, how you reward and recognize, right? Do you have mechanisms to say, “Hey, I saw you being safe”? Hey, you know, I really appreciate the way you personalize the experience for that family member or that fellow employee.
Lori Knowles (19m 52s):
And are you building those things in to say loud and clear, this is what good looks like, this is what we value, and so this is what we reward. But, and the fifth lever is how we hold accountable. If we don’t see those behaviors, we address them because, you know, your team, and you all know this, your team is as strong as your weakest link, and if you as a leader or a fellow team member see that behavior– You know, it’s one thing if it’s skilled, right? You’ve got people who don’t quite know how to do something yet. That’s the easy part, right? I can teach you to do that. But if I say I want a caring environment and I’ve got a caregiver that is dismissive to a patient or a patient family, I need to be strong and courageous enough to be able to address that in real-time.
Lori Knowles (20m 45s):
All those things build culture because all of those things are proof points, right? It’s something an employee can look at and say, “You say you wanna be X, but are you?” And it’s just really building in using those five levers and you know, other people may have three or five or whatever, but for us, these five work because we can target it back and we can evaluate ourselves as we drive our culture efforts to say, are we building in these five levers?
Matt Alder (21m 11s):
And talk to us about the impact of that. What kind of results are you seeing, I suppose particularly around being able to attract talent and also crucially being able to retain talent?
Lori Knowles (21m 21s):
We’ve had a lot of work on this over the last couple of years and so we are seeing some really very positive results. I’ll start on the sort of how we hire an onboard piece. Our applicant pool is incredibly diverse and we mark that as a measure of success, right? For me it’s, is your message getting across? Is your reputation in the community such that If you say you value everyone? Are they really applying to work with you? And so our applicant pool is very, very diverse. And as in almost 80% people of color, which is very representative of our community, again, we say we’re community-owned, we need to reflect what our community looks and feels like.
Lori Knowles (22m 6s):
So I would say that is a real mark. We have had 20 to 25% increase in hiring for three years running, and we hire about somewhere between 13 and 14,000 people a year. And that number is up from, you know, in the past few years, 11,000, 12,000. So it’s a very high volume, but being able to have that success in a challenging workforce I think is is really important. We also look at satisfaction. So you know, hiring manager satisfaction, candidate satisfaction, your listeners probably do that as well.
Lori Knowles (22m 48s):
Our survey is on a five-point scale. Our average response is a 4.6 on a five-point scale. So I feel really good about that. I also am very pleased with turnover. Our turnover is down by, gosh, more than half from where we were during Covid. And so when I look at how we stack up against healthcare industry benchmarks, we’re in top decile. So we’re in the top 10% in the country for turnover, both for all staff and nursing. So I feel really good about that and I’m a firm believer that people vote with their feet and culture is a big driver of that.
Lori Knowles (23m 31s):
So I feel good about what turnover says about our culture efforts. And then I also think engagement. So we do engagement surveys, we do poll surveys, ask a lot of questions of our staff, but our engagement again is much, much better than industry average, both in healthcare and non-healthcare. As a matter of fact, I think our latest, I think we’re at like 77%, so it’s not 95. I would love to be 95 or higher, but I feel pretty good about that given where we are and our leadership turnover has gone down. You know, we have really good tenure with leaders.
Lori Knowles (24m 14s):
We have really good internal promotion rates, you know, over 40% of our leadership jobs at the very first entry-level get filled internally. So, you know, those are good metrics that I like to look at and pay attention to that I feel are indicators of culture.
Matt Alder (24m 33s):
Absolutely. There’s some very impressive numbers there. What role does technology play in all of this? How have you sort of deployed HR and recruiting technologies to really sort of drive the strategy for you?
Lori Knowles (24m 45s):
Yeah, that’s a really, really good point, Matt. And, you know, HR technology is moving at a pace that I think we’re all a little blown away by. But one of the things that we recently implemented, well, recently, almost a year ago now, I guess was new AI technology in talent acquisition because of our volumes like so far this year, just this fiscal year and we run on a July 1 to June 30 fiscal year. So for us, we’re almost finished with our fiscal year, but we’ve had over 145,000 applications come through. And when you think about trying to process through that level of applications, I think just by nature, there’s just no way.
Lori Knowles (25m 34s):
I mean, I would have to have 500 recruiters to be able to get through that. And so the AI technology has been great for us because when you bump the job description against the resume or the application, our AI technology assigns a fit score. It also stack ranks the candidates so that our recruiters know, and because we have an expectation that you get to a resume or application within 48 hours that it’s submitted. And so our recruiters know, hey, if there’s some you need to get back to right away, these are the top 20.
Lori Knowles (26m 13s):
So that’s been very helpful. The other thing that tool is a much better CRM than we’ve had in the past and it allows recruiters to launch campaigns themselves and allows a lot of communication back and forth between candidates much more than we’ve ever had actually allowed us to get rid of some other tools because there’s a lot of video interviewing and texting capabilities that are there that maybe we’ve had to have separate solutions for in the past. So I think in terms of efficiency, it’s been great. It’s also been proven to have no built-in bias. So, you know, there is a lot of talk about whether AI technologies have some flaws in terms of unintentionally inserting bias and this particular tool doesn’t.
Lori Knowles (26m 60s):
We’ve had it looked at separately outside from a legal perspective. And then also really needing their own internal studies was an important piece in the selection. So I would say that we also recently put in AI and IVR technology into our HR shared services team because we get a lot of calls from employees and our wait times were not what we wanted. And so we have decreased our wait time by 300% since we put in that technology and we have a containment rate of 15% for that. So I think those are two examples of where we’ve really stepped up our use of technology in the last year and had some very, very good results.
Matt Alder (27m 48s):
Final question for you. What does the future look like? It’s obviously been a very disruptive few years. What’s your vision for the future? How do you think things will move forward from here?
Lori Knowles (27m 58s):
Well, I have a lot of dreams for our future. I believe absolutely 100% committed to our mission and the mission and the industry of healthcare because it’s just such a meaningful place to be. And I think healthcare has turned the corner in terms of understanding that it’s not just about quality outcomes. That’s table stakes. Like, I mean, that is absolutely what we have to do, but it’s about the experience. And so I think we’ve embraced that and I’m very excited because we’re really talking a lot about patient experience. We’re talking about employee experience. We’re talking about moments that matter. And when you do that, I think it just opens up the future to a world where people can feel really tied and connected to the work that they do and they can continue to see how work enhances their life.
Lori Knowles (28m 54s):
It’s not just a part of their life.
Matt Alder (28m 57s):
Lori, thank you very much for talking to me.
Lori Knowles (28m 59s):
You are very welcome.
Matt Alder (29m 2s):
My thanks to Lori. You can subscribe to this podcast in Apple Podcasts, on Spotify, or via your podcasting app of choice. Please also follow the show on Instagram. You can find us by searching for Recruiting Future. You can search all the past episodes at RecruitingFuture.com. On that site, you can also subscribe to our monthly newsletter, Recruiting Future Feast, and get the inside track about everything that’s coming up on the show. Thanks very much for listening. I’ll be back next time and I hope you’ll join me.
