Report – Workforce Planning Report for a Regional Health Service

Executive Summary

This report models the nursing and allied health workforce of Warrina Regional Health Service (WRHS), a hypothetical regional health service in inland New South Wales serving a catchment of about 120,000 people across sites classified Modified Monash 3 to 5 (Department of Health and Aged Care, 2023). It quantifies current demand and supply, projects both over five years, and appraises four intervention levers. Modelled demand is 382 full-time equivalent (FTE) positions against 329 filled, a workforce gap of 53 FTE, or 13.9 per cent of demand. The service carries a vacancy rate of 10.1 per cent, an annual turnover rate of 20.4 per cent, and an agency and locum premium of A$2.03 million. Under a baseline scenario in which current settings continue, the gap widens to 126 FTE by 2030 as activity grows and separations outpace recruitment. A funded program of recruitment, retention, role redesign and training pipeline measures, costing A$2.35 million per year, is projected to close the gap to 5 FTE by 2030 and to become cost-saving as agency reliance falls. The report recommends adopting the intervention scenario, prioritising retention and role redesign, and governing the workforce through an annual planning cycle overseen by the Board.

Introduction

Regional and rural health services in Australia face a structural workforce disadvantage. The Australian Institute of Health and Welfare reports that the supply of nurses and most allied health professions per capita falls as remoteness increases, while the burden of chronic disease and the proportion of older residents rise (Australian Institute of Health and Welfare, 2022). The National Rural Health Alliance attributes persistent shortages to thin training pipelines, competition from metropolitan and agency employers, and the housing and professional-isolation barriers particular to non-metropolitan practice (National Rural Health Alliance, 2023). These pressures are not evenly distributed, so a service-level plan built on local activity is more useful than a national average.

WRHS operates a 186-bed base hospital with emergency, maternity, surgical and subacute services, together with six smaller rural inpatient sites, community and district nursing, and residential aged care. Its shortage is concentrated in registered nursing, midwifery and several allied health disciplines. This report has three aims: to quantify the current demand-supply gap using activity data and established staffing methods; to project it to 2030 under baseline and intervention scenarios; and to appraise and cost a set of interventions. The nursing and allied health workforce is in scope; the medical workforce, governed by separate arrangements, is not. All figures are modelled estimates, constructed to be internally consistent and calibrated against published national patterns.

Approach and Analytical Framework

The report follows the workforce planning cycle set out in Figure 1, which structures analysis as a repeating sequence rather than a one-off calculation. The cycle is deliberately closed: monitoring feeds an annual re-forecast, so the plan adapts to changes in activity, retirement patterns and registration flows.

Four data sources anchor the analysis: activity and occupancy from the service’s own reporting; national supply benchmarks from the Australian Institute of Health and Welfare (2024); registrant counts and geographic distribution from the Nursing and Midwifery Board of Australia dataset (Australian Health Practitioner Regulation Agency & Nursing and Midwifery Board of Australia, 2023); and the projection method established in the legacy Health Workforce Australia modelling (Health Workforce Australia, 2014). Throughout, one FTE denotes a full-time position of 38 hours per week, and demand is the FTE required to deliver planned activity at safe staffing levels.

Demand and Supply Analysis

Projected demand for care

Nursing demand is derived from activity and a nursing-hours-per-patient-day (NHPPD) planning value, the method used across New South Wales inpatient wards. The planning value of 5.8 NHPPD corresponds to a skill mix rostered at approximately one nurse to four patients on the morning and afternoon shifts and one to seven overnight, consistent with the ratios advanced by the Australian Nursing and Midwifery Federation and mandated in some jurisdictions (Australian Nursing and Midwifery Federation, 2021). Nursing hours required per year are the sum of activity multiplied by the relevant hours factor:

• Inpatient wards: 150 average occupied beds × 365 days × 5.8 NHPPD = 317,550 hours
• Emergency department: 38,000 presentations × 2.4 hours = 91,200 hours
• Perioperative and critical care: 44,000 hours
• Community, district and residential aged care nursing: 62,000 hours
• Total nursing hours required = 514,750 hours

Productive hours per FTE = 1,976 paid hours (38 hours × 52 weeks) less 190 hours annual leave, 76 hours personal leave and 40 hours professional development = 1,670 hours. Nursing FTE demand is therefore 514,750 / 1,670 = 308 FTE. Allied health demand is derived from a bed-based benchmark plus community caseload: (0.30 FTE per available bed × 186 beds) + 18.2 community and aged care FTE = 55.8 + 18.2 = 74 FTE (Australian Institute of Health and Welfare, 2024; Productivity Commission, 2024). Combined modelled demand is 382 FTE.

Current supply and establishment

WRHS has a funded establishment of 366 FTE but only 329 filled, reflecting both genuine vacancies and posts that have been left unfunded despite modelled need. Two supply metrics matter for planning. The vacancy rate measures unfilled funded posts, and the turnover rate measures the rate at which filled posts empty. For nursing:

Vacancy rate = (funded establishment – filled FTE) / funded establishment = (298 – 268) / 298 = 30 / 298 = 10.1%.

Turnover rate = separations in the year / average filled FTE = 67 / 329 = 20.4% across the combined workforce.

A turnover rate above 20 per cent is costly as well as disruptive; each departure carries recruitment, orientation and lost-productivity costs estimated at a substantial fraction of annual salary, and regional services bear this repeatedly because they often function as a training ground before staff move to metropolitan employers (Duffield et al., 2014). Registrant data confirm the structural disadvantage, showing employed nurses per capita declining with remoteness (Australian Health Practitioner Regulation Agency & Nursing and Midwifery Board of Australia, 2023).

The workforce gap

Table 1 brings demand and supply together by workforce group. The gap for each group is modelled demand less filled FTE, and the final column reports the annual premium paid for agency and locum staff engaged to cover unfilled shifts.

Table 1: Warrina Regional Health Service workforce gap by group, current reporting year

Note. Figures are modelled estimates for a hypothetical service.

The agency premium is the avoidable extra cost of buying cover on the external market rather than employing substantively. It is worked as follows: agency premium per hour = agency charge rate – substantive cost per hour = A$104 – A$66 = A$38, a premium of 38 / 66 = 57.6 per cent. WRHS used 45,000 agency nursing hours in the year, so the nursing agency premium = 45,000 × A$38 = A$1,710,000. Adding A$320,000 of allied health locum premium gives A$2.03 million, money that buys no additional capacity beyond what a filled establishment would provide. Two features of Table 1 are strategically important. First, midwifery carries the highest vacancy rate at 16.7 per cent, a thin-market risk because a maternity service cannot safely flex below a minimum roster. Second, acute inpatient nursing combines the largest absolute gap with the highest turnover, so it is both the biggest problem and the group where retention will yield the most.

Five-Year Projection

Demand is projected to grow because the catchment is ageing faster than the national average and inpatient activity is rising with it (Australian Bureau of Statistics, 2023). Under the baseline scenario demand grows at 2.8 per cent per year while supply slowly erodes as retirements are not fully replaced, so the gap compounds. Under the intervention scenario, role redesign and new models of care hold net demand growth to about 1.2 per cent per year, and the four levers lift supply. Table 2 sets out both paths.

Table 2: Five-year workforce projection, baseline versus intervention scenarios (FTE)

Note. Figures are modelled estimates for a hypothetical service.

The contrast is decisive. Doing nothing does not hold the gap steady; it almost quadruples it, from 53 to 126 FTE, or 28.7 per cent of demand, a level at which ward closures and service suspensions become routine. The intervention path bends both curves at once, restraining demand through substitution and lifting supply through recruitment and retention, so the gap narrows to a residual of 5 FTE. This mirrors the legacy Health Workforce Australia modelling, in which unmanaged nursing demand outruns supply within a decade absent deliberate intervention (Health Workforce Australia, 2014).

Intervention Options

Table 3 appraises four levers. The expected FTE effect is the contribution each makes over the five years, expressed on the side of the equation it acts on: recruitment, retention and the training pipeline add to supply, while role redesign reduces demand by substituting tasks to a redesigned skill mix.

Table 3: Intervention appraisal, annual cost and expected five-year FTE effect

Note. Figures are modelled estimates for a hypothetical service.

The effects reconcile to Table 2. Interventions lift supply by 88 FTE, from a baseline 313 to 401 by 2030, and reduce demand by 33 FTE, from 439 to 406, improving the position by 121 FTE and closing the baseline 2030 gap of 126 to 5. The levers are sequenced by speed of return. Retention acts fastest and cheapest, because avoiding a separation is quicker than recruiting a replacement and preserves local knowledge; international evidence gathered through the pandemic confirms it is the highest-yield lever for a stretched nursing workforce (Buchan et al., 2022). Role redesign follows, since expanding scope of practice and deploying assistants and telehealth releases registered-nurse and allied health time without waiting for new registrants (World Health Organization, 2020). Recruitment and the training pipeline are essential but slower, the latter constrained by the three to four years a nursing degree requires, which is why the pipeline is front-loaded with enrolled-nurse and assistant traineeships and supported by the national strategy’s placement commitments (Department of Health and Aged Care, 2021).

The economic case is favourable. Against the program cost of A$2.35 million per year, the baseline agency and overtime premium is projected to rise from A$2.03 million to about A$4.6 million by 2030 as the gap reaches 126 FTE, whereas under the intervention scenario it falls to about A$0.6 million. The avoided premium in the final year, A$4.6 million – A$0.6 million = A$4.0 million, exceeds the program’s annual cost, so the strategy is cost-saving within the horizon before any account is taken of the safety and quality gains from a stable, substantive workforce.

Risks

Four risks could erode the projected benefit and require active management.

• Registration lead times (likelihood moderate, impact high). International and interstate recruits face registration, English-language and bridging requirements that delay a start by months (Australian Health Practitioner Regulation Agency & Nursing and Midwifery Board of Australia, 2023). Mitigation is to begin registration support at the point of offer and to bridge with defined-term contracts.
• Housing and infrastructure (likelihood high, impact high). The single largest barrier to regional recruitment is often accommodation rather than salary (National Rural Health Alliance, 2023). Mitigation is to fund key-worker housing within the recruitment budget, as costed in Table 3.
• Unrealised retention gains (likelihood moderate, impact high). Retention spending fails if workloads remain unsafe, so the retention lever depends on the role-redesign lever landing. Mitigation is to implement the two together and to monitor turnover quarterly.
• Psychosocial harm under continued shortage (likelihood moderate, impact moderate). Sustained understaffing is a recognised psychosocial hazard that itself drives further separations, creating a reinforcing loop. Mitigation is to treat workload as a work health and safety matter and to escalate when rosters breach agreed thresholds.

Recommendations

1. Adopt the intervention scenario in Table 2 as the funded five-year workforce plan, and establish a workforce planning committee that reports to the Board and runs the cycle in Figure 1 each year.
2. Reallocate the current A$2.03 million agency premium as the initial funding source for retention and role redesign, so that the program is substantially self-funding from year one.
3. Prioritise retention first and role redesign second, because they deliver the fastest FTE return and directly reduce the turnover and workload that drive the gap.
4. Expand models of care through nurse practitioner and expanded-scope roles, assistants in nursing, allied health assistants and telehealth, targeting the acute inpatient and midwifery groups that carry the largest and most fragile gaps.
5. Invest in the training pipeline through expanded rural clinical placements and new-graduate transition programs, building local supply that is less likely to leave.
6. Report vacancy rate, turnover rate, agency premium and the FTE gap to the Board quarterly, and re-forecast demand and supply annually against Table 2.

Conclusion

Warrina Regional Health Service faces a workforce gap of 53 FTE that current settings will not contain. Modelling demand from activity and safe staffing values, and reading it against a filled establishment carrying 10.1 per cent vacancy and 20.4 per cent turnover, shows a service already buying A$2.03 million of avoidable agency cover each year. Left unmanaged, the gap widens to 126 FTE by 2030 and the agency bill more than doubles. A coordinated program of recruitment, retention, role redesign and pipeline development, costing A$2.35 million per year, is projected to close the gap to 5 FTE and to pay for itself through avoided agency premium within the five-year horizon. The central lesson is that workforce shortage is a planning problem rather than an unavoidable feature of regional practice: demand can be restrained through redesigned models of care at the same time as supply is rebuilt through retention and a local training pipeline, provided the service governs its workforce as a continuous cycle rather than an annual budget line.

References

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