Why reducing agency & locum spend starts with retention

The conversation healthcare organisations should be having before they focus on agency costs.

Few workforce conversations generate as much attention as agency and locum spend. It fills board papers, operational meetings, budget discussions and efficiency programmes. At some point, almost every healthcare organisation asks the same question: how do we reduce agency costs?

It is a reasonable question. Agency and locum expenditure can be a significant commitment, particularly during periods of shortage. But after years working in NHS transformation and workforce programmes, I have often found it is not the most useful one. A better question is usually: why are we spending so much on agency staffing in the first place?

Agency staff are not the problem

This point matters. Throughout my NHS career I worked alongside many exceptional agency and locum professionals, and many services simply could not have operated safely without them. Temporary staffing has a genuine purpose: covering winter pressure, maternity leave, long-term sickness, service expansion and specialist skills gaps. The issue is not agency staffing. The issue is dependency.

How organisations become dependent

Most agency dependency does not happen overnight. It usually starts with a single vacancy. A vacancy creates pressure. Pressure creates overtime. Overtime contributes to fatigue. Fatigue contributes to turnover. Turnover creates further vacancies. Before long, agency staffing is embedded in the way the service operates, not as a stopgap, but as the model.

This is rarely a recruitment problem. It is a workforce sustainability problem.

What high-performing services do differently

The strongest services I encountered rarely focused exclusively on recruitment. They focused on stability: strong leadership, a supportive culture, professional development, flexible working, real career progression and team cohesion. Recruitment was one component of a broader workforce strategy, not the whole of it.

Retention is often the highest-return investment

Most organisations invest significant energy in attracting people. Far fewer invest the same energy in understanding why people leave, or, more usefully, why people stay. England’s NHS Long Term Workforce Plan made retention one of its three pillars precisely because replacing experienced staff repeatedly is far more costly, in money and morale, than helping them stay.

Listening to the workforce

One of the most valuable lessons from my transformation work was the importance of listening. Exit interviews, stay interviews, staff surveys, the Friends and Family Test, turnover and sickness data all point to the same thing when read together. The objective is not data collection: it is understanding.

The role of international recruitment

International recruitment absolutely has a role, particularly where shortages are significant. But a successful international hire is about far more than making an appointment. It needs registration support, relocation planning, family readiness, community integration and ongoing support. The goal should be retention, not arrival. An overseas hire who leaves within a year solves nothing: it simply moves the cost around.

What would I do?

If I were reviewing a service with high agency spend, I would resist starting with the agency figure. I would start with five questions:

• Why are people leaving?
• What are staff telling us?
• Where are our workforce hotspots?
• What does good look like elsewhere?
• Are we solving today’s problem, or tomorrow’s?

The answers usually reveal more than any agency-expenditure report alone.

Final thoughts

Reducing agency spend is a worthwhile goal, but agency cost is usually a symptom, not the root cause. The organisations that achieve the most sustainable improvements are rarely those that focus solely on cutting agency usage. They are the ones that create environments where people want to stay.