Managing labor costs is one of the biggest challenges in healthcare, with overtime and agency nurse reliance driving up hospital expenses significantly. The complexity deepens with large, specialized workforces that require precise staffing across multiple departments and shifts.
Automated staffing tools offer a cost-effective solution by optimizing labor distribution, improving internal communication, and preventing the last-minute staffing gaps that typically lead to these expensive outcomes.
Here are five key strategies to reduce reliance on premium labor:
One of the primary reasons for excessive reliance on premium labor is the tedious manual process involved in filling shifts. Premium labor refers to hours worked that are compensated at a higher rate than a nurse’s regular wage. This typically includes overtime, agency labor, and incentive programs for last-minute shift coverage.
When nurses or clinical managers have to individually call employees to cover open shifts, the process pulls them away from patient care and other critical responsibilities. This time-consuming and often unsuccessful approach forces hospitals to resort to costly overtime or agency nurses. In an ideal situation, open shifts would be efficiently communicated and filled without diverting valuable clinical staff from their core duties.
Andgo eliminates this manual burden through multi-channel communication, using email, SMS and phone to notify the right employees about available shifts quickly. The system handles both incoming changes through IVR Absence Reporting and outgoing requests via Automated Shift Filling. This automation helps hospitals significantly reduce unnecessary premium labor costs while freeing nurses and managers from the time-consuming task of making individual calls to fill shifts.
Last-minute shift vacancies are a persistent challenge that drive hospitals to rely on costly premium labor. When a nurse calls out unexpectedly, schedulers often face a time crunch to secure replacements. With limited options and pressing patient care needs, they typically turn to premium labor for available staff or agency nurses, both significantly increasing labor expenses beyond budgeted rates.
Automated shift-filling solutions transform this reactive process by instantly identifying qualified, available staff and matching them to open shifts in real-time. With intelligent staffing solutions, these routine yet time-consuming tasks can be automated, enabling hospitals to prevent costly staffing gaps while maintaining optimal patient care ratios.
Many healthcare leaders recognize that staffing automation represents a critical evolution for hospitals facing budget constraints. "In today's healthcare environment, we need accessible tools that help us scale our operations efficiently while reducing unnecessary costs," says Angel Islas, Surgery Department at Montefiore Medical Center.
The impact of automation on staffing processes is substantial. Nursing schedulers typically spend an average of 35 minutes attempting to fill a single shift manually, but solutions like automated shift-filling streamline this to just 3 minutes through a simplified workflow.
Fluctuations in patient volume can make it challenging to balance workload, leading to understaffed floors and overworked nurses. Instead of relying on costly premium labor, nursing leaders can use shift-filling tools to anticipate periods of high demand. That’s why automated staffing software is a crucial part of the nursing manager’s toolkit, especially in high-volume, fast-paced settings. Andgo’s staffing platform can support high-volume or complex environments, like union staffing.
This strategy will be especially useful when resources are stretched. Zafar Chaudhry, Senior VP and Information Officer of Seattle Children's, is predicting continued labor challenges throughout 2025. “The first headwind is going to continue to be workforce shortages, especially in the clinical space, with increasing labor costs. There's burnout impacting healthcare organizations and retention issues as well,” he says. By proactively distributing shifts, hospitals can prevent nurse burnout, reduce overtime expenses, and improve the quality of patient care.
Without visibility into workforce data, managers may struggle to make informed decisions, leading to excessive labor costs. Controlling premium labor costs requires real-time visibility into staffing levels.
Andgo's automated shift management software transforms workforce visibility by providing dynamic dashboards that display staffing levels across departments, shifts, and skill sets. Managers gain instant access to critical metrics like filled positions, pending vacancies, and staff availability, all updated in real-time as shifts are filled or new absences occur. This continuous visibility enables proactive staffing adjustments before premium labor becomes necessary.
By monitoring these workforce metrics, hospitals can prevent last-minute overtime, redistribute shifts effectively, and minimize labor expenses. Andgo also identifies potential staffing gaps days in advance, allowing for strategic intervention before costs escalate.
Moreover, with automated staffing tools like Andgo, nurses can view and claim open shifts in real-time without requiring immediate supervisor involvement. Andgo instantly notifies available nurses, allowing them to pick up extra shifts at regular rates instead of costly overtime rates.
When urgent absences occur, swift action and proactive staffing prevent costly staffing gaps. Andgo's automated shift-filling software transforms how hospitals respond to these unexpected situations, replacing manual phone calls with an intelligent notification system that reaches qualified staff within seconds.
When a nurse calls out unexpectedly, Andgo immediately triggers a targeted cascade of notifications via SMS, email, and phone to available staff with matching qualifications. This multi-channel approach generates faster responses than manual processes, often securing coverage quickly enough to avoid premium pay situations. The system intelligently prioritizes staff who can work at regular rates before offering overtime, helping control costs even in urgent situations.
Hospitals using Andgo for urgent call-outs report significant reductions in premium labor expenses, while also alleviating the administrative burden on nurse managers. These efficiencies translate to more predictable labor budgets and improved nurse satisfaction as the stress of last-minute scheduling diminishes.
Controlling premium labor expenses is critical for maintaining financial stability in today's challenging healthcare environment. By implementing automated staffing solutions, hospitals can transform the way they utilize their existing workforce, shifting from reactive crisis management to strategic resource optimization.
Andgo automates the most labor-intensive staffing processes: absence management, shift filling, and shift distribution. This eliminates communication gaps and reduces the administrative burden that typically makes staffing challenges so stressful for clinical managers and frontline staff.
The impact extends across the organization. Nursing leaders gain scheduling efficiency and improved staff satisfaction, while financial managers achieve predictable labor costs and reduced premium labor expenses. This dual benefit highlights why investing in staffing automation delivers value beyond immediate cost savings. It creates the foundation for a sustainable, resilient healthcare workforce capable of navigating industry challenges without sacrificing quality care.