The Labour government’s ‘strategy’ for collective bargaining between district health boards (DHBs) and the various health unions can best be described as a slogan. The problem is that while slogans can make effective sound-bytes, a strategy they certainly are not. As result of this mistaken approach the Government has created a situation that undermines its credibility with health professionals (and the health unions that represent them) and the public.
In a recently published article by BusinessDesk I wrote about the application of the Government’s approach to DHB employed nurses represented by the NZ Nurses Organisation (NZNO). It risked escalating an otherwise resolvable collective bargaining dispute into a lengthy industrial cold war.
This risk is significant because nurses are by far the biggest part of DHB workforces, they are highly valued by the public (more than governments), and (learning from their previous negotiations that led to a high level of membership dissent) NZNO’s strategic approach is noticeably more member-driven.
Failure to understand nursing labour market realities
The Government’s approach fails to recognise the labour market realities for DHB employed health professionals. In the nursing context the slogan is to freeze the pay of higher paid nurses in order to pay more for their lesser paid colleagues.
Simplicity can be attractive but not when it is superficial. Its lack of substance means that it misses the boat in terms of the imperatives of the nursing workforce in DHBs. What is being offered to the lower paid may appear attractive in percentage terms but is on a low base thereby reducing the supposed income benefit.
More important is the fact that the lower paid are also the less experienced whereas the critical pressure point of the nursing workforce is the relatively higher paid more experienced nurses who we desperately need to retain. Retaining them also improves the ability to recruit younger nurses.
Before examining this further it is important to stress that the DHBs are not the cause of the problem that led to last week’s impressive national strike. Responsibility for this situation rests with Government. DHBs are the agents of government and act on their behalf adhering to instructions fudged as ‘guidance’.
This makes DHBs scapegoats as they have been in many other failings in our public health system. They are responsible for around 80% of the Budget’s Vote Health in order to provide community and hospital healthcare, but governments call the shots. DHBs have more in common with monkeys than organ-grinders.
Threats facing nursing workforce
The Government’s approach ignores the real threats facing the nursing workforce in DHBs. As with workforces in the rest of the economy, nurses are aging with growing numbers at an age to seriously consider retirement. Governments can’t control demographics. But they can control other threats.
These other threats begin with serious shortages in the nursing workforce. But, whereas much of the rest of the economy can reduce what they do in difficult times, DHBs can’t. There is no demand tap to turn off particularly for emergencies and acute care that can’t be deferred without risk of permanent disability or loss of life.
This seriousness is highlighted by the fact that the rate of acute hospital admissions is greater than the rate of population growth. It is arguably the biggest contributor to DHBs increased operational costs and their widespread deficits. The more serious outcome is that nurses are more overworked, over-stretched and fatigued. The risks to their health and to that of their patients is severe.
The pressure and stress on both experienced and inexperienced nurses are high. But the impact is different. The more experienced the nurse the more employable they are elsewhere, particularly in a country not so far away. Australia also has serious nursing shortages and active recruits to address them. Australia’s health system is not too dissimilar to ours and our trained experienced nurses are like gold.
Talking of gold, Australia offers considerably superior working conditions and salaries. Some of the better working conditions (particularly staffing) are due to the critical mass advantage of a country with a population five times larger. But it also has an overall average pay gap difference in its favour of around 25-30%. The lure of this pull factor on top of the powerful push factors in DHB land is huge.
Think for a moment of the over 60% pay gap facing fatigued and burnt out hospital specialists working in DHBs whose plight and wellbeing the Government is also ignoring.
A strategy based on an investment lens
Consequently NZNO has correctly identified first that more nurses need to be employed by DHBs to ensure safe staffing levels for their patients and themselves. Second, in a highly competitive labour market, nurses need salaries that enable DHBs to both retain more experienced nurses and recruit new ones. Recruiting new nurses becomes more difficult when they know that the system is losing experienced nurses to whom they would look to for professional support and leadership.
NZNO gets this but the Government to date doesn’t. If it wants to resolve this dispute before it further escalates, the Government needs to move beyond slogans and sound-bytes to strategically addressing the severe retention and recruitment needs of nursing. It needs to see nurses (and other health professionals) through an investment in human capital lens rather than a cost-containment commodity lens. It did this for businesses during the coronavirus shutdowns. Why not nurses and other health professionals struggling with workforce shortage crises?
If Government fails to grasp this reality it will be the ultimate loser whatever the bargaining outcome. It will lose the trust and confidence of the most trusted occupational group in the country and, in doing so, see its high popularity reduced by losing much public trust and confidence.
Slogans and sound-bytes might sound good to those who utter them at the point of utterance. But, in reality, with a discerning health workforce and public are more likely to be an own goal.
Ian Powell was Executive Director of the Association of Salaried Medical Specialists, the professional union representing senior doctors and dentists in New Zealand, for over 30 years, until December 2019. He is now a health systems, labour market, and political commentator living in the small river estuary community of Otaihanga (the place by the tide). First published at Otaihanga Second Opinion.
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