Elearning! Magazine: Building Smarter Companies via Learning & Workplace Technologies.
Issue link: http://elmezine.epubxp.com/i/48330
Elearning! Scripps Health Reduces Labor Costs Via Learning Labor accounts for 43 percent of California- based Scripps Health's operating expenses. To reduce labor costs, its Labor Management Learning Initiative (LMLI) was launched. This program of assessment, classroom training and software reporting tools reduced premium labor by 46 percent in test sites (saving $2.34 million in premi- um labor) and achieved 2,730 percent ROI. The company also spends about $30 million per year on learning, since its cor- porate CEO wants a more focused effort and better efficiency that helps Scripps stay ahead of competitors. The LMLI, originating four years ago and accelerating every year, helps the organization manage labor costs. Since the corporate CEO has a no-layoff philosophy, managers work diligently at replacing employees who get displaced due to restructuring and downsizing. "We have a 90 percent success rate get- ting people re-placed in our organization," says Vic Buzachero, senior vice president for Innovation, Human Resources and Performance Management. "There are times when parts of the organization are flexing people off, when in other areas we are hiring temps and scheduling overtime. The key is how those managers work together to flex staff so everyone contin- ues to work full time and we don't increase costs. That learning process has been very, very successful." Scripps Health first pulled its key employees together to learn staffing best- practices. That effort was coupled with a series on teaching them how to schedule and use premium labor differently. The second part of the initiative is on how to develop standards and how to implement them and use new tools throughout the organization. Last year, Scripps reduced premium pay $17 million, a real savings of about 1 percent of payroll. "Our wage-and-benefit costs are about $1 billion," notes Buzachero, "so a 1 per- cent pickup in productivity translates into a $10 million savings. That's not insignifi- cant. The key is educating and training employees, because you have to raise com- petency levels in different situations. We have been helping labor become inter- the corporate CEO facilitates and teaches. He helps leaders understand how he wants the organization to be led and managed. For the first four hours, he talks about how and why he makes certain types of decisions, the strategy involved, the impact on the organization, and why certain issues are key issues for the organization. According to Buzachero, the CEO is extraor- dinarily transparent during these meetings, entertaining questions on any subject except confidential personnel matters and legal agreements involving confidentiality. In the afternoon, members of the senior executive team all serve as faculty, which also includes the chairman of the board. They rotate throughout the 12-month peri- od to talk about their leadership journey, then answer questions and discuss with the 25 participants their responsibility and how they affect the future of the organization. Halfway through the year, the group Veronica Zaman of Scripps Health, Catherine Upton of changeable with competency development courses with staff, so they are flexible enough to move from unit to unit. Once system-wide orientations are established, we will convert them into e-learning opportunities over the next 12 months." LEADERSHIP ACADEMY In its 10th year, another element of Scripps' learning program is its Leadership Academy. Every year, top management selects about 25 key leaders from across the organization at all levels — a mixture of vice presidents, department directors, senior directors, managers and occasional- ly a supervisor. Only managers who are expected to have a future leadership role in the company are selected. The event itself is year-long. It includes 12 monthly, day-long meetings, during which divides into small teams, each taking on a project. At the end of the term, they must publish and present to senior management a bound journal with all the papers written. "There's a formal graduation, a fun thing, and they have an alumni group that meets monthly," says Buzachero. "It's a powerful way for an organization to devel- op, learn with contemporary issues, and see how upper management applies things. The faculty learns, too, because the classes bring unique perspectives that we perhaps normally wouldn't hear about. It's an opportunity for dialog and learn how our high-potential employees see the organiza- tion. They are a valuable group of people." "Last year, we began to restructure our organization and appointed six new vice presidents, and every one of them had been through the Leadership Academy," Buzachero notes. "There's no guarantee, but typically people moving up and taking on key strategic roles are coming out of that population. Our CEO invests a lot of time in the academy, which is rare. It's a heavy teaching commit- ment on his part, but he also gets to assess talent very well through that process." May / June 2011 27 Elearning!