Reducing agency utilization through strategic partnership in Alaska

Overview

In 2024, a healthcare facility in Alaska partnered with Favorite Healthcare Staffing to significantly reduce its overall agency utilization and strengthen its long-term workforce strategy.

Through our managed service partnership, the organization achieved measurable cost savings, decreased reliance on temporary labor, and successfully transitioned interim staff into permanent roles within one year.

Even with the challenge of recruiting and retaining talent in a highly remote area, where permanent hiring is often harder than in metro markets, the partnership helped the organization to create a staffing model built for long-term stability.

Key results from January 1, 2024 – December 31, 2024

• 31% reduction in overall agency utilization compared to 2023
• $244,000 redirected into long-term workforce initiatives through a built-in reinvestment approach
• 13 contracts converted to permanent staff positions
• Agency costs declined across multiple months year on year, with reductions of 10-40% depending on the period

The challenge

The organization sought to address rising labor expenses and an increasing dependence on traditional agency staffing. Leadership needed a solution that would both:

1. Reduce short-term agency spending

2. Reinvest savings into long-term workforce stability, such as permanent hiring and sign on bonuses

The solution

1. Built-in reinvestment approach through our MSP partnership

As part of the managed service relationship, Favorite applied a built-in reinvestment approach to align contingent labor management with long-term hiring goals.

Through this approach, contingent labor savings were strategically redirected to support:

• Sign on bonuses for permanent roles
• Workforce planning initiatives
• Long-term recruiting campaigns
• Reduce agency reliance by 10-40% across the year
• Convert at least 10 contract clinicians into permanent employees
• Reinvest savings into long-term hiring incentives
• The facility achieved a 31% year-on-year decrease in agency utilization, outperforming initial projections.
• Thirteen temporary clinicians were successfully converted to permanent staff, helping stabilize staffing levels.
• $244,000 was strategically reinvested into long-term workforce initiatives, minimizing reliance on premium temporary labor.

This approach allowed the organization to shift focus from short-term staffing to sustainable hiring efforts.

2. Agency reduction plan

Favorite and the facility jointly set aggressive goals:

3. Conversion-focused recruitment

Favorite identified high-performing temporary clinicians who could transition into permanent roles. This reduced dependence on external agencies and improved the continuity of care for patients.

Outcomes

By the end of 2024, the collaboration has made a positive operational and financial impact:

The result was a strengthened workforce foundation, lower staffing volatility, and meaningful financial savings.

Conclusion

Through a strategic partnership with Favorite, this Alaska healthcare organization transformed its staffing model, shifting from short-term agency reliance to a long-term workforce strategy. The combination of targeted financial support, structured planning, and conversion-focused recruiting delivered measurable improvements in cost efficiency and organizational stability.