Budget cuts, hiring freezes and the adverse effects they create

Posted on November 30, 2007
Filed Under Healthcare, Job Growth |

All too often we hear about ‘budget cuts.’ The State of Nevada recently announced that their forecasted tax revenues will be less than projected and all departments will need to cut their budgets. Unfortunately, rather than identifying inefficiencies and correcting those, the cuts are just blanket cuts effecting many areas.

One area it effects is recruiting. Let’s use the Rawson Neal Hospital as an example. The hospital, run by Southern Nevada Adult Mental Health Services has been in dire need of mental health (psych) nurses and psychiatrists since the day they opened. The budget cuts will put them on a hiring freeze.

Now they still ‘need’ the nurses and doctors and are still required to have the hospital staffed. But because they are on a hiring freeze, and can not recruit foll-time employees, they will need to outsource. Outsourcing typically adds an average of 46% to the cost of labor, therefore increasing the costs to operate the hospital.

In the end - it costs us all more. Because that bi-product expense, will cost the hospital more, which in turn costs the state more - which we all pay for in the form of tax.

Worse yet, it will more than likely create another budget crisis in the future. Just a different type.