NUR 4063 Module 4 Staffing and Budget Analysis Example

Overtime, Travelers or New Hires? Pricing Three Ways to Cover 3.6 Vacant RN Positions on a Medical-Surgical Unit

Student Name

American College of Education

NUR4063: Leadership and Management in Healthcare

Module 4 Assignment

Instructor Name

September 28, 2026

The Gap in Hours

The unit is a 30-bed adult medical-surgical unit with an average daily census of 27 patients. Its staffing plan calls for one RN for every five patients on day shift and one for every six on nights, which requires about 42 RN full-time equivalents once vacation, sick time and education are included. After two resignations and a transfer, the unit has 38.4 RN full-time equivalents filled, a gap of 3.6. At 2,080 hours per full-time equivalent, that is 7,488 RN hours a year that must be covered somehow or left uncovered. The unit, its budget and the figures below are composites written for this assignment, using a base RN wage of $44 an hour and a benefits load of 30 percent.

Leaving the hours uncovered is not a neutral choice. Aiken et al. (2002) reported that adding one patient to a nurse's load raised the surgical patient's 30-day mortality odds by 7 percent, raised the odds of failure to rescue by the same amount and pushed the nurses' own odds of burnout up by almost a quarter. Running short is itself a staffing decision, and the evidence says it is paid for by patients and then by the nurses who stay.

Pricing the Three Options

Option one is to cover the hours with overtime from current staff. At time and a half, $66 an hour, 7,488 hours cost about $494,000 a year, with no benefits load because the benefits are already paid. On paper this is the cheapest option. It means, however, that each of the unit's 38 RN positions would carry an average of about 200 extra hours a year, or roughly one additional twelve-hour shift every month, on top of full-time schedules.

Option two is to contract travel nurses for the full year. At a bill rate of $95 an hour, which includes the agency's margin, housing and travel, 7,488 hours cost about $711,000. Travelers arrive trained and can start within weeks, but they are the most expensive hour on the budget, their contracts usually run thirteen weeks, and each new traveler needs unit orientation.

Option three is to recruit four RNs, including new graduates, to fill the 3.6 positions. Salary and benefits for 3.6 full-time equivalents come to about $428,000 a year. The first year also carries recruitment costs of about $20,000 and a twelve-week orientation during which new hires work with preceptors and do not count toward staffing, so their 1,728 orientation hours must still be covered, here by a short traveler contract costing about $164,000. The first-year total is therefore about $612,000, falling to about $428,000 in year two. Jones (2008) describes how nurse managers can update turnover and replacement cost estimates using an inflation index when a new cost study is not practical, and the same logic shows why the first-year figure should not be compared with the second-year figure of the other options: the investment in orientation is paid once.

Testing the Options Against the Evidence

Cost alone would choose overtime. The evidence argues against relying on it. An extra shift a month for every nurse, on a unit already staffed at one RN to five or six patients, means more nurses working long weeks and consecutive shifts, the conditions associated with higher error risk and burnout in the staffing literature. Aiken et al. (2002) linked heavier patient loads with burnout and job dissatisfaction, and on this unit burnout would produce more resignations, which would widen the gap the overtime was meant to close.

Griffiths et al. (2019) followed patients on the general wards of four hospitals and found that each day a patient experienced RN staffing below the ward's mean was associated with a 3 percent increase in the hazard of death, and that days when admissions per RN exceeded 125 percent of the ward mean carried additional risk. Their findings support whichever option most reliably keeps RN hours at the planned level. Travelers do that in the short term. Permanent hires do it over time, and they also stay long enough to learn the unit, which a series of thirteen-week travelers cannot.

A Fourth Option Rejected

Finance leaders sometimes propose a fourth option: fill part of the gap with nursing assistants, who cost less per hour, and hold the remaining RN positions open. Two assistants could be hired for roughly the cost of one RN. The same study that linked low RN staffing to mortality examined this substitution directly. Griffiths et al. (2019) found that while low assistant staffing was associated with higher mortality, high levels of assistant staffing were also associated with higher mortality, and they concluded that their findings did not support policies that replace registered nurses with assistants. An assistant can take a set of tasks off an RN's list, but cannot take on the assessment and judgment that the outcome studies are measuring. The fourth option is therefore rejected, although the unit's current assistant staffing should be protected, because low assistant staffing also carried risk.

Recommendation and What It Displaces

The recommendation is option three: recruit four RNs now and cover their orientation with a single twelve-week traveler contract, while capping voluntary overtime at one extra shift per nurse per month. The first-year cost of about $612,000 is roughly $118,000 more than all-overtime coverage and about $99,000 less than a year of travelers; in the second year it is about $283,000 less than travelers. The unit's approved personnel budget already includes the salary for the vacant positions, so the net new spending is the traveler bridge and recruitment, about $184,000.

That money has to come from somewhere, and the manager should say where. The most realistic source on this unit is the planned replacement of bedside vital signs monitors, budgeted at $150,000 for the current year, which could be deferred by twelve months because the existing monitors remain under a service contract. The remainder would come from reduced overtime spending as the new hires finish orientation. Deferring the monitors has its own cost, since the new units would integrate with the electronic record and save documentation time, but that cost is smaller and more reversible than a year of short staffing. The manager will present both the staffing plan and the deferral together, so the decision makers see the full trade.

Conclusion

Covering 3.6 vacant RN positions on this unit can be done three ways, and the cheapest on paper is the one most likely to make the problem worse. Pricing the options with their assumptions shown, testing them against the staffing research and naming what the preferred option displaces turns a request for more staff into a decision a budget committee can evaluate. Hiring permanent nurses costs more than overtime in the first year and far less than travelers after that, and it is the option most consistent with the evidence on staffing and patient outcomes.

References

Aiken, L. H., Clarke, S. P., Sloane, D. M., Sochalski, J., & Silber, J. H. (2002). Hospital nurse staffing and patient mortality, nurse burnout, and job dissatisfaction. JAMA, 288(16), 1987-1993. https://doi.org/10.1001/jama.288.16.1987

Griffiths, P., Maruotti, A., Recio Saucedo, A., Redfern, O. C., Ball, J. E., Briggs, J., Dall'Ora, C., Schmidt, P. E., & Smith, G. B. (2019). Nurse staffing, nursing assistants and hospital mortality: Retrospective longitudinal cohort study. BMJ Quality & Safety, 28(8), 609-617. https://doi.org/10.1136/bmjqs-2018-008043

Jones, C. B. (2008). Revisiting nurse turnover costs: Adjusting for inflation. Journal of Nursing Administration, 38(1), 11-18. https://doi.org/10.1097/01.NNA.0000295636.03216.6f