What is FTE Creep? And how do these two words combine to give us a uniquely inhuman and distasteful sense of being treated like machines at work? Turns out, FTE Creep is something financial analysts formally try to minimize, typically in healthcare organizations. The irony is that an inhuman idea is utilized in a business that’s all about caring for humans.
I am a business leader first. So I don’t hesitate to make recommendations about difficult cost-cutting measures, or controlling labor costs. But I’m also mindful of what our words say about what we value at work. HR sometimes reports into finance. So if our finance leaders are talking about labor in terms of jobs “creeping” up where we should be squeezing our current employees to do more, I wonder if they are open to hearing about what people actually need to keep inspiration in their work.
“FTE Creep” implies that all of the people along the chain of command care about is getting more FTEs in their own respective organizations, because direct reports mean power and status. And all front-line employees care about is having more people to spread the work across. Now, I know that FTE Creep is likely to naturally happen as a result of a lack of vigilance in defining how much labor is needed to address the data-driven assessment of productivity need on each team and in each role, by location in a healthcare facility. But the term itself is, frankly, distasteful.
The reality is that our people need to feel passionate about what they’re doing and be connected with the mission of an organization in order to do their best work. When they feel engaged and belong, they do better work and are more productive. And this tends to affect the company’s bottom line in a positive way. HR can help finance understand this, and incorporate it into the labor demand and cost analysis process. A little wiggle room is needed in there to ensure we aren’t just treating every FTE the same, with the same percentage of productivity, the same demands, and the same needs. Location 1 may have a large population of high-needs patients, an aged community, or concentration of people on dialysis or dealing with HIV. The “FTEs” in that location take pride in delivering personal care and have positive outcomes and high staff retention. Is this something finance will notice or take into account?
I’m not minimizing the importance of taking account of labor costs. Is it true that over an entire organization, an extra job in every location will negatively impact profits? Could inappropriate staffing even jeopardize the financial viability and future of the organization? Absolutely. This problem must be solved cooperatively between finance, operations and HR, and I would call it workforce strategy and planning.
Does it matter what we call it? I answer with an emphatic YES. I’d say naming this phenomenon “FTE Creep” indicates that HR was either not involved or didn’t assert itself to represent the people aspect of the planning process. People strategy ideally should never happen without HR professionals being part of the team.