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Hospitals often feel forced into an “either/or” mindset: either we hire everyone as permanent staff, or we lean heavily on long‑term contracts and travelers. In reality, the most resilient organizations use a portfolio approach—mixing direct hire and long‑term contracts intentionally based on service line needs, market conditions, and risk. Analyses of staffing models and financial performance show that both excessive turnover and over‑reliance on temporary labor can erode quality and margins if they are not managed strategically. (Agency Staffing and Hospital Financial Performance – health services research; Nurse Staffing and Patient Outcomes – multiple nursing staffing studies)  Direct hire is typically best suited for roles that are central to your identity, long‑term strategy, and culture. These include core inpatient units, high‑volume service lines, and roles where continuity and team cohesion are critical. Research on staffing and outcomes consistently links stable, adequately staffed teams to fewer adverse events and better patient outcomes. (Nursing Staffing and Patient Outcomes – multiple quality and staffing studies) Long‑term contracts, by contrast, can make sense in situations where demand is time‑limited or uncertain—such as new service launches, short‑term surges, or hard‑to‑fill specialties where you need coverage while building a permanent pipeline. In these cases, contracts can provide flexibility and speed while you gather data and refine what you need in a permanent hire. (Health system case studies on strategic use of contingent labor and staffing flexibility) Where many organizations run into trouble is using long‑term contracts to patch structural issues indefinitely. If a role has been filled by contract staff for years, with no clear plan to transition to a sustainable mix of permanent and supplemental staff, the hospital may be paying a premium for what should be a core position. Studies indicate that high reliance on agency labor, especially when tied to turnover and understaffing, can negatively affect financial performance. (Agency Staffing and Hospital Financial Performance – health services research) Kace Premier helps hospitals map out which roles should remain primarily direct hire, which should blend direct and contract, and which may appropriately stay contract‑heavy due to market realities. This framework mirrors workforce planning best practices that emphasize aligning staffing models with strategic priorities, risk tolerance, and local labor markets. (Healthcare workforce planning and contingent labor strategy literature) In practice, leaders can: Segment roles by criticality, time‑to‑fill, and volatility of demand. For each segment, define the target mix of direct hire and long‑term contract over a 12–24‑month horizon. Track cost, turnover, and quality outcomes for each segment to see whether the mix is working. By moving away from an all‑or‑nothing stance, hospitals can use direct hire to build stable, committed cores and long‑term contracts as flexible tools to manage risk and change. Kace Premier Medical Talent partners with clients to design and execute these mixed strategies, helping them minimize both turnover costs and over‑dependence on high‑cost contract labor.

The cost of treating every physician vacancy as an emergency Many organizations only think about physician and APP recruitment when a resignation letter hits their inbox. The result: rushed searches, heavy reliance on locums, and significant financial and operational disruption. Industry and academic analyses have shown that physician vacancies can cost organizations hundreds of thousands to over a million dollars in lost revenue and added costs, depending on specialty and setting. (Various physician workforce and vacancy cost analyses published in health administration and hospital management literature) Beyond the financials, reactive hiring forces remaining clinicians to shoulder additional workload, increasing risk of burnout and turnover. (JAMA Network Open – Prevalence of and Factors Associated With Burnout Among Health Care Workers; multiple burnout and workload studies) Why traditional, reactive physician recruitment isn’t working 1. The market has changed, but strategies haven’t Physicians and advanced practice providers now have more options than ever—remote work in some specialties, telehealth roles, portfolio careers, and increasing emphasis on work-life balance. Reports on workforce trends consistently note changing expectations around schedule control, administrative burden, and culture, especially among younger clinicians. (Workforce trend analyses across major healthcare workforce surveys and reports) Yet many organizations still approach recruitment as if they are the only option in town, moving slowly and communicating infrequently. 2. Locums as the default “solution” Locums providers are essential for coverage, but routine dependence on locums as the primary answer to vacancy creates instability and higher long-term cost. Studies on staffing models and patient outcomes suggest that continuity and stable, integrated teams support better quality and efficiency. (Nursing Staffing and Patient Outcomes – various staffing and continuity of care studies; multiple physician continuity and outcomes publications) A strategic direct hire plan can reduce overreliance on locums and create a more predictable, stable workforce. 3. No pipeline, no succession planning Many organizations lack: • Up-to-date market intelligence on key specialties. • Relationships with residents, fellows, or mid-career clinicians in their region. • Defined succession plans for aging or at-risk service lines. Without these, every physician exit becomes a full-blown crisis, weakening negotiating position and increasing time-to-fill. Kace Premier philosophy: direct hire as a long-term strategy Kace Premier approaches physician and APP direct hire as an ongoing, strategic discipline rather than a one-off transaction. This aligns with workforce planning principles showing that proactive talent pipelines and data-driven planning reduce vacancy duration, stabilize service lines, and lower long-term staffing costs. (Healthcare workforce planning and recruitment strategy literature across health administration journals) In practice, this means: • Maintaining continuous market mapping and outreach in your highest-risk specialties. • Building relationships with candidates before you have an urgent vacancy. • Advising on role design, schedule, and culture so you are competitive in today’s market. Practical implications for healthcare leaders 1. Identify your critical roles and risk Start by ranking physician and APP roles by: • Revenue contribution or strategic importance. • Average time-to-fill. • Retirement or attrition risk. Healthcare workforce planning research emphasizes that focusing on critical, hard-to-fill roles first delivers outsized value in stability and financial performance. (Healthcare workforce planning and critical role prioritization literature) 2. Build a rolling 12–24 month direct hire plan Instead of reacting to each resignation, build a rolling plan that includes: • Anticipated retirements or transitions. • Growth or new service lines. • Historical turnover patterns. Proactive planning allows you to start sourcing earlier, engage with talent pools, and reduce the time you’re fully vacant or over-dependent on locums. (Health system case studies on strategic workforce planning and vacancy management) 3. Design roles that match today’s physician expectations Workforce surveys show physicians value autonomy, reasonable workloads, support staff, and cultures that respect wellbeing and work-life balance. (Physician survey data from national medical associations and health workforce organizations) Align your roles with these expectations by: • Being realistic about patient volume and documentation burden. • Offering flexible scheduling where possible. • Demonstrating support for team-based care and adequate staffing. 4. Partner with a firm that thinks beyond the vacancy A direct hire partner should help you: • Clarify your value proposition to candidates. • Communicate culture and leadership realities accurately. • Build pipelines and brand awareness, not just fill one role. Kace Premier’s approach emphasizes long-term fit and stability, reflecting evidence that better-aligned roles and cultures improve retention and performance. (Organizational culture and retention research in healthcare, including PMC – Exploring the Link Between Healthcare Organizational Culture, Employee Well-Being and Burnout) If every physician resignation throws your organization into crisis mode, it’s time to shift from reactive hiring to strategic direct hire. Emerging evidence and best practices in workforce planning underscore that proactive pipelines, competitive role design, and culture clarity improve stability and reduce costly dependence on locums and last-minute solutions. (Healthcare workforce planning and recruitment strategy literature) Kace Premier Medical Talent can help you design and execute a direct hire strategy for physicians and APPs that protects your revenue, reduces chaos, and builds teams that stay.