Sylvain Trepanier

Sean Early
Beth Ulrich
Barbara Cherry

New Graduate Nurse Residency

Program: A Cost-Benefit Analysis Based
On Turnover and Contract Labor Usage
EXECUTIVE SUMMARY
A cost-benefit analysis was
conducted to assess the economic outcomes of a new graduate registered nurse (NGRN)
residency program utilizing
turnover rate and contract labor
usage data from a multi-site
health care corporation.
Secondary data analysis of
NGRNs (n=524) was conducted including descriptive and
step-wise regression analyses.
Findings indicated a new graduate residency program was
associated with a decrease in
the 12-month turnover rate from
36.08% to 6.41% (p<0.05) and
reduction in contract labor
usage from $19,099 to $5,490
per average daily census
(p<0.05).
These cost-benefit analyses
suggest net savings between
$10 and $50 per patient day
when compared to traditional
methods of orientation.
A NGRN residency program
offers a cost-effective innovative
approach and should be valued
as an investment as opposed to
an expense.

EW GRADUATE REGISTERED

nurses (NGRNs) face many

challenges including role
transition, high performance expectations in an increasingly higher-acuity environment,
and an increased level of accountability as it relates to nursing quality indicators. New graduate registered nurses and nursing leaders
have identified NGRNs as ill prepared to meet the demands of
todays health care expectations
(Reinsvold, 2008). In the face of
such a serious problem, a residency program post-graduation offers
a solution to both nursing leaders
and NGRNs (Beecroft, Kunzman,
& Krozek, 2001). The costs associated with a nursing residency program can seem prohibitive for
community based-hospitals as
compared with a traditional orientation program. The purpose of
this study was to conduct a cost-

benefit analysis of a nursing residency program utilizing turnover

rate and contract labor usage.

Experiences of New Graduate

Registered Nurses
Todays health care environment is characterized by both a
nursing shortage (Buerhaus, Staiger,
& Auerbach, 2008) and financial
instability created by continuous
declines in cost reimbursement
(Zelman, McCue, & Glick, 2009).
This environment may create pressure for nurse leaders to decrease
the new graduate orientation and
on-boarding period to address
financial budgetary concerns related to the costs associated with
non-productive time. The health
care environment is also characterized by a decreased length of stay
for patients, increased patient acuity, and complex technology
(Reinsvold, 2008).

SYLVAIN TREPANIER, DNP, RN, CENP, is Senior Director, Patient Care Services, Tenet
Healthcare Corporation, Dallas, TX.
SEAN EARLY, PhD, is Assistant Vice President, Versant, Los Angeles, CA.
BETH ULRICH, EdD, RN, FACHE, FAAN, is Senior Partner, Innovative Health Resources,
Houston, TX. At the time of this study, she was Senior Vice President, Versant.
BARBARA CHERRY, DNSc, MBA, RN, NEA-BC, is Department Chair for Leadership
Studies, and Associate Professor, Texas Tech University, Health Science Center, Anita
Thigpen Perry School of Nursing, Lubbock, TX.

NURSING ECONOMIC$/July-August 2012/Vol. 30/No. 4

207

Table 1.
Nursing Residency Components
RN Residency Component
Didactic Direct Instruction,
Case Studies

RN residents spend approximately 15% to 20% of the RN Residency in didactic curriculum. Core and core concepts with specialty applications are provided for all RN
residents. During these classes, RN residents receive the core content and case studies are provided to assist residents to understand how to apply the content within their
specialty area. Multispecialty classes such as ECGs: 12 Lead ECG - Injury and
Infarct Patterns are also provided for residents depending on the specialty in which
they will practice. Specialty-specific classes for residents in the Adult Critical Care,
Pediatrics, Medical-Surgical, Emergency Department, Pediatric Emergencies,
Perinatal, Neonatal ICU, and Perioperative are also provided.

Clinical Immersion and

Competency Validation Process

The RN Residency is structured such that the residents focus on the clinical immersion in between the classroom didactics to promote the application of content with the
guidance of a preceptor. During the clinical experience, new graduates do not hold primary responsibility for direct patient care, but work under the close supervision of an
experienced RN preceptor. To maximize efficiency and promote critical thinking, the
guided clinical experience is divided into two sub-components: home unit experience
and looping (clinical experiences taking place outside of the home unit).
Competencies, performance criteria, and sample clinical learning objectives are available to evaluate and validate an RN residents clinical performance on the home unit
and while looping. These competencies are reviewed and revised regularly to incorporate the latest regulations, core measures, and practice standards.

Looping

Looping is an opportunity for the RN residents to gain guided clinical experience outside their home unit. These outside areas may be related to their home units or they
may be areas in which the resident will encounter patient populations from his/her
home unit. For example, residents hired into the Cardiothoracic Intensive Care Unit
may spend a half-a-shift in the Emergency Department where their patients may come
from, a 4-hour shift in the Operating Room where their patients may go, and a full-shift
in the step-down unit where their patients may be discharged.

Supportive Component: Mentoring

The mentor component helps smooth the transition of RN residents from new graduate to nursing professional. RN residents are paired one-to-one with an experienced
nurse or are assigned to mentor circle groups facilitated by two RNs. A mentor supports the career development of the RN resident and serves as a sponsor into the profession of nursing. Specific topics are discussed during mentor-mentee sessions such
as career mapping.

Supportive Component: Debriefing

RN residents participate in scheduled, facilitated debriefing and self-care sessions,

which provide them with the opportunity to voice their feelings about their experiences
as new graduate RNs safely. These experiences may include caring for a dying
patient, intervening with a family in crisis, or maintaining balance in ones own life.

Recent studies have showed

NGRNs make up approximately
10% of the nursing workforce in
acute care settings (Berkow,
Virkstis, Stewart, & Conway, 2009).
They encounter serious difficulties with transition into their new
role (Dyess & Sherman, 2009;
Pellico, Brewer, & Kovner, 2009),
although the phenomenon of reality shock has been acknowledged
for decades (Kramer, 1974). These
patterns suggest NGRNs require a
comprehensive introduction into

208

Description

the registered nurse (RN) role. A

NGRN residency program shows
significant potential as a form of
orientation (Krozek, 2008). Characteristics of a residency program
include standardization of curriculum and competencies, practical application of knowledge, a
support system, rigorous evaluation, and continuous improvement (Krozek, 2008). The NGRN
residency program implemented
for this study included didactic
direct instruction, case studies,

clinical immersion, structured

mentoring and debriefing, looping
to related departments, and competency validation (see Table 1).
Patients require competent nursing care, and a residency program
for NGRNs can produce NGRN
competency (after 18 weeks of residency) equal to or higher than
nurses in a comparison group
with 17 months of experience
(Ulrich et al., 2010; Versant, 2008).
Previous studies indicate NGRNs
are unprepared to assume multiple

NURSING ECONOMIC$/July-August 2012/Vol. 30/No. 4

professional responsibilities upon

graduation (Del Bueno, 2005;
Dyess, & Sherman, 2009; Pellico et
al., 2009). Berkow and colleagues
(2009) found only 10% of nurse
executives believed NGRNs are
competent to deliver care. NGRNs
reported they would benefit from
long-term support including development of clinical judgment and
debriefing opportunities (Dyess &
Sherman, 2009). NGRNs have also
described a disconnect between
what they were taught in nursing
school and their personal experience in the profession; a feeling of
being pushed into the role while
not being ready; too much work,
responsibility, and pressure; and
perceived mistreatment by experienced nurses and physicians
(Pellico et al., 2009).

Financial Considerations
The health care system has
been characterized by an ongoing
reduction in reimbursement since
the introduction of DiagnosisRelated Groups (DRGs) in 1984
(Zelman et al., 2009). DRGs were
followed by the Resource-Based
Relative Value System in 1992, the
Balanced Budget Act of 1997, the
Ambulatory Payment Classification in 2000, the Medicare
Modernization Act of 2003, Pay
for Performance in 2003, and in
2009 the arrival of MedicareSeverity DRGs (Zelman et al.,
2009). The recent Patient Protection and Affordable Care Act
also contains major pay-for-performance initiatives and revenue
adjustments for acute care facilities. This ongoing reimbursement
reduction requires expenses be
scrutinized, and it is important to
establish a return on investment
for all programs and services to
ensure fiscal viability of the health
care organization.
Provision of a new graduate
residency program has varying
direct and indirect costs based on
the length of the program (e.g.,
nonproductive time) and costs of
program development, preceptors,
and educators. The non-produc-

tive time (cost of hourly wages

and benefits for a NGRN) associated with the data used in this residency varies from approximately
$21,571 per resident (for an 18week medical-surgical residency
in the Florida market) to $36,960
per resident (for a 22-week intensive care residency in the
California market). The difference
between the two is generated by
the regional salary differences and
the length of the residency.
Residencies that are outsourced
also contain per resident costs for
services provided, which can be
up to $5,200 per resident. This
per-resident cost for the outsourced services is in addition to
the cost of non-productive time
described above. For example,
providing an outsourced medicalsurgical residency program for 20
NGRNs per year in Florida can
cost one hospital approximately
$431,424 for non-productive time
plus $104,000 for the outsourced
residency for a total annual cost of
$535,424. A nurse leader must be
able to demonstrate a return on
this type of investment, which can
be significant in a communitybased hospital. The return on
investment of a NGRN residency
program can be determined through
comparison of the costs associated
with traditional preparation of
NGRN and savings incident to a
decrease in NGRN turnover and
actual contract labor cost.

New Graduate Turnover

The historic nursing labor
shortage in the United States has
been well documented (Baggot,
Hensinger, Parry, Valdes, & Zaim,
2005). Turnover of newly licensed
nurses is also of great concern for
nursing leaders (Hayes & SextonScott, 2007). Turnover rates at 12
months post-hire for NGRNs have
been reported to be between 13%75% (Kovner et al., 2007; Squires,
2002; Ulrich et al., 2010). In a
multi-state study, Kovner and colleagues (2007) found 24% of
NGRNs indicated they would
resign by their second year of

NURSING ECONOMIC$/July-August 2012/Vol. 30/No. 4

work due to the lack of preparation and the chasm between the
NGRNs expectations and the reality of the work. The cost of replacing a NGRN is estimated to be
between $49,000 and $92,000 per
nurse (Beecroft et al., 2001;
Contino, 2002; Jones, 2008; Robert
Wood Johnson Foundation, 2006).
Therefore, it is imperative for
nurse executives to consider
retention of the NGRN workforce
as central to their staffing and
financial efficiency.
Studies have demonstrated a
residency model can positively
impact NGRNs through decreased
turnover (Beecroft, Dorey, & Wenten,
2008; Fey & Miltner, 2000; Krugman
et al., 2006; Ulrich et al., 2010),
proper social support, which decreases turnover intent by the residents (Beecroft et al., 2008); and
better prepared skilled nurses
(Beecroft et al., 2001; Beyea, von
Reyn, & Slattery, 2007; Fink,
Krugman, Casey, & Goode, 2008;
Krugman et al., 2006). A large number of studies have been conducted
in academic medical centers. There
are no widely recognized studies of
excellent quality identified by the
authors that have examined the
impact of a residency program on
NGRN turnover and contract labor
in community hospitals. It is
important to study the impact of a
nurse residency program in community hospitals because the number of community hospitals (more
than 5,000) far exceeds the number
of academic medical centers (126)
(American Hospital Association,
2010; Deloitte Center for Health
Solutions, 2009). Community hospital leaders may sense they do not
have adequate funding to establish
a nursing residency program for
their NGRN workforce due to a perceived requirement to have an academic relationship, and an extensive research and/or a hospitalbased education department.

Turnover and Contract Labor

Usage
Hospitals rely on premium
contract labor or paying overtime

209

rates to current employees to compensate for high turnover and

vacancy rates. Overtime work has
the potential to increase burnout
and can potentially have a negative impact on patient safety
(Krozek, 2008). Because hospitals
are facing serious financial constraints including decreased reimbursement, it is strategically wise
to evaluate the effect of turnover
on contract labor usage. Therefore,
it is strategically important to
investigate a NGRN residency program and its impact on turnover
and premium contract labor costs
as a measure of return on investment.

Project Design and Methodology

The effect of a residency program on turnover and contract
labor costs was assessed through
secondary data analysis of extant
data collected by a national
provider of a NGRN residency
program and a multi-site health
care corporation headquartered in
the southwest United States. The
participating health care corporation owns and operates 49 acute
care hospitals across the nation.
The health care corporation contracted with a NGRN residency
program provider to offer its residency program in 15 of the health
care corporations communitybased hospitals. The project was
deemed exempt from formal institutional review board approval as
it included a retrospective analysis of de-identified data.

Conceptual Model
An adaptation of two models
from the work of Beecroft et al.
(2008) and Benner (1984) was
used as the conceptual model for
this study. The model offered by
Beecroft and colleagues (2008)
described new nurse turnover
intent in terms of individual characteristics, work environment,
and organizational factors. The
model defined individual characteristics to be age, educational
level, prior work experience,
choice of unit/ward, nursing com-

210

Figure 1.
Conceptual Model

Individual Characteristics
(age, gender, highest RN education level,
ethnicity, competency) [Novice to Expert]

Work Environment
(job satisfaction, NGRN residency)

New
Nurse
Turnover

Contract
Labor
Usage
Organizational Factors
(group cohesion)

Adapted from Beecroft et al., 2008; Benner, 1984.

petency, and coping strategies.

Work environment variables
included empowerment, autonomy, decision making, and opportunity for advancement (job satisfaction). Finally, organizational
factors were defined as workplace
ties and relationships such as
group cohesion, leader empowerment, and organizational commitment. Benners (1984) model further defines the development of
nursing competency whereby a
NGRN passes through five levels
of proficiency: novice, advanced
beginner, competent, proficient,
and expert. The model used for
investigation (see Figure 1) takes
into consideration individual
characteristics (age, gender, highest RN education level, ethnicity),
the work environment (NGRN residency program), and NGRN
turnover.

Database
The databases were accessed
electronically: the health care system Accounting and Human
Resources (AHR) databases and
the residency company (RC) database. The AHR databases offered
actual contract labor dollars per
hospital and per department, and

total visits per hospital and per

department. The AHR databases
are populated using actual expenses entered into the general
ledger. The RC database provided
de-identified facility level data on
NGRN age, gender, highest level of
nursing education, ethnicity, and
NGRN turnover 12 months preresidency and 12 months to 24
months post-residency. Turnover
was calculated by dividing the
number of employed residents at
12 and 24 months by the total
number of residents who completed the residency.

Variables
The following variables were
analyzed for this project: individual characteristics, contract labor
usage, and turnover. Individual
characteristics included age, gender, highest level of nursing education, and ethnicity as reported
by the individual nurse upon
entry into the residency program.
Contract labor usage was defined
as labor dollars paid to an external
entity (agency) to provide nursing
care. Turnover was defined as the
total number of newly licensed
nurses leaving a hospital before 12
months post-nursing residency

NURSING ECONOMIC$/July-August 2012/Vol. 30/No. 4

Table 2.
Average Daily Census of Participating Hospitals
(N=15 hospitals)

Mean

2007

2008

2009

2010

161.90

161.50

154.70

150.60

Minimum

49.90

51.50

51.92

45.53

Maximum

328.00

325.90

290.60

281.20

90.60

95.10

92.00

89.30

Standard Deviation

Table 3.
Turnover Pre and Post-Residency
(N=15 hospitals)
Pre-Residency
(12 months)

Post-Residency
(12 months)

Mean

36.08%

6.41%

Minimum

17.20%

0.00

Maximum

85.80%

35.00%

Standard Deviation

17.94%

10.26%

Table 4.
Contract Labor per Average Daily Census
(N=15 hospitals)
2007

2008

2009

2010

$19,099

$17,142

$12,033

$5,490

Minimum

$1,236

$657

$188

Maximum

$45,728

$43,330

$29,446

$16,071

Standard Deviation

$13,530

$10,435

$8,745

$4,639

Mean

divided by the total number of residents who completed the nursing

residency.

Population and Setting

The analysis included data
from 15 hospitals in California,
Florida, Georgia, Nebraska, Missouri,
Tennessee, and Texas. All were
considered community-based hospitals with the exception of one
academic medical center. The
average licensed bed count of all
hospitals was 303 beds (range 73519) and the average daily census
ranged from 161.9 in 2007 to 150.6
in 2010 (see Table 2).
Of the 15 participating hospitals, three were preparing for
Pathway to Excellence designa-

tion. The sample of NGRNs participating in the residency program

included a total of 524 nurses
(87% female, 13% male). The
majority of residency program
participants were between 23 and
30 years of age (52%), White/
Caucasian (58%), and held a baccalaureate degree as the highest
level of nursing education (54%).

Findings
A stepwise regression analysis
was conducted to assess the relationship between a nursing residency program and turnover (T/O)
controlling for the individual
characteristics of new graduate
nurses. The regression was completed using T/O as the dependent

NURSING ECONOMIC$/July-August 2012/Vol. 30/No. 4

variable (DV), with the percent of

NGRN resident penetration and
individual characteristics as the
independent variables. The percent of NGRN residents between
the ages of 31 to 40 years of age
explained 44% of the T/O variance at 12 months (F = 8, df 1,10,
p<0.05). In addition, the presence
of NGRN residents with a masters
degree as the highest level of education explained 97.6% of the T/O
variance at 24 months (F=69, df
2,4, p< 0.05).
A stepwise regression was utilized to assess the relationship
between a nursing residency program and contract labor usage
controlling for the individual
characteristics of new graduate
nurses. The regression was completed using contract labor dollars
per average daily census as the
DV, and the percent of resident
penetration and individual characteristics as independent variables. The presence of residents
between 31 and 40 years of age
explained 54.8% of the contract
labor per average daily census in
2010 (F= 6.4, df 1,12, p< 0.05).
The 12-month turnover across
the 15 hospitals went from a mean
of 36.8% pre-residency to a mean
of 6.41% post-residency (see Table
3) and annual contract labor dollars per average daily census went
from a mean of $19,099 pre-residency to $5,490 post-residency
(see Table 4).

Cost Benefit Analysis

A cost-benefit analysis involves the assessment of expected benefits and costs associated with
each choice (Santerre & Neun,
2010). The cost-benefit analysis of
a NGRN residency program can be
determined through the expected
benefits and the costs associated
with a residency program. If the
expected benefits are greater than
the cost, a hospital should seriously consider a residency program as
a method of introducing newly
licensed nurses into the workforce. The authors performed a
cost-benefit analysis based on

211

Table 5.
Pre and Post-Residency Data

Hospital

Pre-Residency T/O
(Absolute Number)

12-24 months
Post-Residency T/O
(Absolute Number)

Pre-Residency
T/O Cost

12 Months
Post-Residency
T/O Cost

31

$2,185,500

$352,500

$1,833,000

15

$1,057,500

$1,057,500

$564,000

$211,500

$352,500

$564,000

$70,500

$493,500

14

$987,000

$141,000

$846,000

$282,000

$70,500

$211,500

43

$3,031,500

$352,500

$2,679,000

22

$1,551,000

$141,000

$1,410,000

$634,500

$634,500

$564,000

$564,000

12

$846,000

$846,000

54

$3,807,000

$3,807,000

$352,500

$70,500

$282,000

11

$775,500

$423,000

$352,500

11

$775,500

$352,500

$423,000

Total

255

39

$17,977,500

$2,749,500

$15,228,000

Savings

T/O = turnover

turnover and contract labor dollars since we have already established a relationship between
these two variables and the presence of a residency program.

Turnover
Turnover of NGRNs is defined
as the number of NGRNs leaving a
hospital before 12 months post-residency. Across the 15 hospitals
studied, NGRN T/O before the residency was 255 NGRNs compared
to 39 NGRNs post residency (see
Table 5). Pre-residency T/O costs
for this study are estimated at
$17,977,500 and the post-residency T/O costs at $2,749,500. In other
words, the decrease in T/O resulted in savings of $15,228,000 across
the 15 hospitals studied or $18.50
per patient day (see Table 5).
A residency program contains
more up-front costs compared to a
traditional orientation. Considering all costs for the residency program (additional education time

212

and the cost per resident when the

residency is outsourced) compared to the traditional orientation
model, an additional cost of
$13,460 per NGRN was calculated
when the residency model is used
as a method of introduction into
the workforce (see Table 6). This
additional cost totals $7,053,040
for the 524 NGRNs across all 15
hospitals enrolled into the residency program. Taking into consideration the additional up-front
cost, we determined a net savings
of $8,174,960 ($15,228,000 $7,053.040) across the 15 hospitals or approximately $10 per
patient day, where the expected
benefits are greater than the cost.

Contract Labor
Contract labor usage is defined as labor dollars paid to an
external entity (agency) to provide
nursing care. Contract labor went
from a mean of $3.04M pre-residency in the 15 hospitals to a

mean of $797K in the 12 months

post-residency. A decrease in contract labor dollars of $33.68M
across the 15 hospitals was found
(see Table 7). Although a relationship between the presence of a
residency program and contract
labor usage was identified, the
impact of other potential confounding variables such as the
economy were not included in the
analysis. In essence, the decrease
in contract labor associated with
the presence of a nursing residency program could be as high as
$33.6M across 15 hospitals or
approximately $41 per patient day.

Total Cost Benefit

We estimated the total cost
benefit of the nursing residency
program to be between $8.1M and
$41.7M combining the impact of
turnover and contract labor usage
for a total of 15 hospitals that
introduced a nursing residency
program. This savings translates to

NURSING ECONOMIC$/July-August 2012/Vol. 30/No. 4

Table 6.
Cost Comparison Between a Residency Program
and Traditional Orientation
NGRN salary for Residency Program
(18 weeks at $28.00 per hour)

$20,160

Company cost per resident

$4,500

Total cost per resident

$24,660

NGRN salary for traditional orientation (10 weeks)

$11,200

Difference between traditional orientation and a residency

(per NGRN)

$13,460

NOTE: Data provided by health care system. Current average hourly rate of NGRN
(including benefits) based at $28.00 per hour.

Table 7.
Contract Labor Savings

unit level, thus creating a power

issue when we conducted some of
the statistical analysis. In addition, there are some important
confounding variables that may
have impacted the results of our
findings such as the state of the
economy in years 2008 to 2010.
The overall economy in the
United States was not favorable by
2010 and, for that reason, many
hospitals saw a decline in volume
which in turn required nursing
leaders to close and eliminate
positions. It is possible the closure
of positions may have impacted as
well the level of turnover and contract labor dollars.

Discussion
Hospital

Pre-Residency
Contract Labor

Post-Residency
Contract Labor

Savings Between
Pre and PostResidency

$366,780

$315,381

$51,398

$2,477,847

$801,384

$1,676,462

$10,660,134

$2,537,112

$8,123,021

$822,895

$219,785

$603,109

$282,596

$0

$282,596

$1,414,036

$87,171

$1,326,865

$2,711,331

$1,171,165

$1,540,165

$9,944,285

$2,726,720

$7,217,564

$2,000,559

$90,044

$1,910,514

$1,485,999

$731,727

$754,271

$1,547,696

$710,042

$837,653

$355,093

$505,928

($150,835)

$1,028,728

$150,984

$877,743

$4,000,313

$1,021,225

$2,979,087

$6,531,392

$880,262

$5,651,129

Total

$45,629,684

$11,948,933

$33,680,750

NOTE: Data provided by Accounting and Human Resources. The Contract Labor
costs were not adjusted in 2011 dollars since the short-term interest rate was
deemed insignificant over the last 4 years.

between $10 and $50 savings per

patient day.

Limitations
This study utilized secondary
data analysis of a health care corporations community-hospital
database and may not be applica-

ble to other health care settings.

Additionally, associations identified within the 2010 database that
could not be demonstrated in previous years were most likely due
to either the lack of relationship or
sample size. The unit of measure
was the hospital as opposed to the

NURSING ECONOMIC$/July-August 2012/Vol. 30/No. 4

This cost-benefit analysis allowed us to determine the positive

impact of a nursing residency program in community-based hospitals on NGRN turnover similar to
prior studies (Beecroft et al., 2001;
Fey & Miltner, 2000; Krugman et
al., 2006). In addition, we demonstrated the positive impact on contract labor dollars spent for nursing
services. To our knowledge, there
have been no other studies documenting these relationships.
When considering the difficult reimbursement environment
hospitals find themselves in
today, nursing executives should
seriously consider a residency
program to decrease the turnover
of NGRNs. Further research is
required to determine if the economy had an impact on turnover
and contract labor and, if so, to
what extent.
Since it has been reported by
previous researchers that a nursing residency program can accelerate the competency of NGRNs,
we would recommend some
analysis of patient safety and quality outcomes. For example, further
research should assess the relationship between the presence of a
residency program and nursing
quality indicators such as falls,
falls with injuries, and hospitalacquired pressure ulcers.

213

Conclusion
To meet the needs of hospitalized patients, NGRNs must be
competent, well prepared, confident, and knowledgeable. Both
NGRNs and executive nursing
leaders have observed that the traditional orientation process is not
sufficient to prepare NGRNs to
practice in todays health care system. Despite the consistent frustration experienced by NGRNs,
few hospitals prepare NGRNs via
a residency program approach. A
residency program for NGRNs
offers an innovative approach to
better prepare them for their new
role, and resulted in net savings
between $10 and $50 savings per
patient day when compared to the
traditional method of orientation
over a period of 24 months postimplementation.
These results clearly demonstrate that a nursing residency program should be valued as an
investment as opposed to an
expense. Nurse leaders are invited
to engage the board members of all
community-based hospitals in
offering a residency program for
new graduate nurses. Nurse leaders of community-based hospitals
can present the nurse residency
for new graduate registered nurses
as a cost-effective measure to provide an adequate transition into
practice for all new graduate registered nurses. $
REFERENCES
American Hospital Association. (2010).
Fast facts on US hospitals. Retrieved
from http://www.aha.org/aha/resourcecenter/Statistics-and-Studies/fastfacts.html
Baggot, D.M., Hensinger, B., Parry, J.,
Valdes, M.S., & Zaim, S. (2005). The
new hire/preceptor experience: Costbenefit analysis of one retention
strategy. Journal of Nursing Administration, 35(3), 138-145.
Beecroft, P., Dorey, F., & Wenten, M.
(2008). Turnover intention in new
graduate nurses: A multivariate
analysis. Journal of Advanced Nursing, 62(1), 41-52.
Beecroft, P., Kunzman, L., & Krozek, C.
(2001). RN internship: Outcomes of a
one-year pilot program. Journal of
Nursing Administration, 31(12), 575582.

214

Benner, P. (1984). From novice to expert:

Excellence and power in clinical
nursing practice. Menlo Park, CA:
Addison-Wesley.
Berkow, S., Virkstis, K., Stewart, J., &
Conway, L. (2009). Assessing new
graduate nurse performance. Journal
of Nursing Administration, 38(1),
468-474.
Beyea, S.C., von Reyn, L.K., & Slattery,
M.J., (2007). A nurse residency program for competency development
using human patient simulation.
Journal of Nurses in Staff Development, 23(2), 77-82.
Buerhaus, P., Staiger, D., & Auerbach, D.
(2008). The future of the nursing
workforce in the United States: Data,
trends and implications. Sudbury,
MA: Jones & Bartlett.
Contino, D.S. (2002). How to slash costly
turnover. Nursing Management,
33(2), 10-13.
Del Bueno, D.J. (2005). Why cant new
registered nurse graduates think like
nurses? Nursing Education Perspectives, 265, 278-282.
Deloitte Center for Health Solutions.
(2009). Academic medical centers:
The tipping point. Retrieved from
http://www.deloitte.com/assets/Dco
m-UnitedStates/Local%20Assets/
Documents/us_chs_Academic
MedicalCentersTheTippingPoint_06
2109.pdf
Dyess, S.M., & Sherman, R.O. (2009). The
first year of practice: New graduate
nurses transition and learning
needs. The Journal of Continuing
Education in Nursing, 40(9), 403410.
Fey, M.K., & Miltner, R. (2000). A competency-based orientation program for
new graduate nurses. Journal of
Nursing Administration, 30(3), 126132.
Fink, R., Krugman, M., Casey, K., &
Goode, C. (2008). The graduate nurse
experience: Qualitative residency
program. Journal of Nursing Administration, 38(7/8), 341-348.
Hayes, J., & Sexton-Scott, A. (2007).
Mentoring partnerships as the wave
of the future for new graduates.
Nursing Education Perspectives,
28(1), 27-29.
Jones, C.B. (2008). Revisiting nurse
turnover costs: Adjusting for inflation. Journal of Nursing Administration, 38(1), 11-18.
Kovner, C.T., Brewer, C.S., Fairchild, S.,
Poormina, S., Kim, H., & Djukic, M.
(2007). Newly licensed RNs characteristics, work attitudes, and intentions to work. American Journal of
Nursing, 107(9), 58-70.
Kramer, M. (1974). Reality shock. St.
Louis, MO: C.V. Mosby.

Krozek, C. (2008). The new graduate RN

residency: Win/win/win for nurses,
hospitals, and patients. Nurse
Leader, 6(5), 41-44.
Krugman, M., Bretschneider, J., Horn,
P.B., Krsek, C.A., Moutafis, R.A., &
Smith, M.O. (2006). The national
post-baccalaureate graduate nurse
residency program. Journal for
Nurses in Staff Development, 22(4),
196-205.
Pellico, L.H., Brewer, C.S., & Kovner, C.T.,
(2009). What newly licensed registered nurses have to say about their
first experiences. Nursing Outlook,
57(4), 194-203.
Reinsvold, S. (2008). Nursing residency:
Reversing the cycle of new graduate
RN turnover. Nurse Leader, 6(6), 4649.
Robert Wood Johnson Foundation. (2006).
Wisdom at work: The importance of
the old and experienced nurse in the
workplace. Retrieved from http://
www.rwjf.org/files/publications/oth
er/wisdomatwork.pdf
Santerre, R.E., & Neun, S.P. (2010). Health
economics: Theory, insights, and
industry studies. Mason, OH:
Cengage Learning.
Squires, A. (2002). New graduate orientation in the rural community hospital.
The Journal of Continuing Education
in Nursing, 33(5), 203-209.
Ulrich, B., Krozek, C., Early, S., Ashlock,
C.H, Africa, L.M., & Carman, M.L.
(2010). Improving retention, confidence, and competence of new graduate nurses: Results from a 10-year
longitudinal database. Nursing Economic$, 28(6), 363-375.
Versant. (2008). Quantifying the nursing
residency advantage: The fast-track
to nursing competence and confidence [white paper]. Los Angeles,
CA: Author.
Zelman. W.N., McCue, M.J., & Glick, N.D.
(2009). Financial management of
healthcare organizations. An introduction to fundamentals tools, concepts, and applications (3rd ed.). San
Francisco, CA: John Wiley & Sons.
ADDITIONAL READINGS
The Joint Commission. (2009). 2006
Hospital national patient safety
goals. Retrieved from http://www.
jointcommission.org/PatientSafety/N
ationalPatientSafetyGoals/05_hap_n
psgs
Kovner, C.T., Brewer, C.S., Greene, W., &
Fairchild, S. (2009). Understanding
new registered nurses intent to stay
at their jobs. Nursing Economic$,
27(2), 81-98.

NURSING ECONOMIC$/July-August 2012/Vol. 30/No. 4

Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.