Why Nurse Turnover Makes the “July Effect” a Constant Risk

Since 1989, researchers have asked a key question: Does the influx of new medical residents each July compromise patient safety? Dubbed the “July Effect,” this phenomenon has produced mixed results—some studies cite spikes in errors, others see no significant impact—leaving hospital leaders unsure whether it’s a real risk or lingering myth.

While the debate continues (with a 2023 study calling it a myth), one fact is apparent: when new clinicians join the workforce, experienced staff carry the load—bridging gaps, catching errors, and managing heavier workloads. In nursing, where turnover is constant, this pressure isn’t limited to July. It’s an “Every Month Effect” that strains resources and tests care team resilience year-round.

The same conditions linked to the July Effect—mass departures, staffing shortages, rushed orientations, limited supervision, and sleep-deprived new grads on night shifts—can happen any time of year in hospital units with high nurse turnover.

The Hidden Cost of Constant Nurse Turnover

The post-pandemic era has created a growing void in nursing expertise. With 640,000 Baby Boomer RNs set to retire by 2030, over 2 million years of experience are vanishing annually. Some units are now staffed almost entirely by novice nurses—with the most senior having just three years on the job.

Unlike the predictable cycles of medical residency, nursing disruption is constant and more complex to track—but the risks to patient care are just as real. High nurse turnover contributes to the following:

• Precepting fatigue, as experienced nurses continuously onboard new staff

• Burnout and low morale, driven by relentless staffing instability

• Loss of institutional knowledge as veteran nurses leave the profession

• Declining patient safety, as clinical skills take time and supervision to mature

Nurse turnover isn’t just a workforce issue—it’s a financial one with profound implications for hospital margins. Despite being a recognized strategic priority, fewer than half of hospitals (42.9%) track the true cost of RN turnover, and it adds up fast.

In 2024, the average cost to replace a single staff RN reached $61,110—a sharp 8.6% increase year over year. This burden hits the labor budget hard through inflated overtime, salary hikes, critical staffing bonuses, and skyrocketing travel and agency fees.

The result? The average acute care hospital lost $4.75 million due to nurse turnover last year, with losses ranging from $3.85M to $5.65M. Every percentage point change in RN turnover now represents a $289,000 swing in operating cost.

Nurse retention isn’t just the right thing to do—it’s a bottom-line imperative.

A Generation of New Nurses Underprepared

The fallout from the COVID-19 pandemic reshaped nursing education in ways we’re only beginning to grasp fully. Nursing graduates from the classes of 2020 and 2021 completed large portions of their training virtually. Many lacked access to clinical placements due to hospital restrictions and overwhelmed health systems.

The result? New nurses entered the profession without ever having performed these tasks in a real-world setting:

• Given an intramuscular injection

• Set up a nebulizer treatment

• Cleaned an incontinent patient

• Spoken face-to-face with a patient in distress

Let that sink in. These nurses now care for complex, high-acuity patients with limited experience performing foundational bedside tasks. While they bring passion and commitment to the field, their learning curve is steep, creating a patient safety risk and placing an enormous burden on seasoned staff to fill in the gaps.

6 Ways Healthcare Leaders Can Combat Nurse Turnover

This is not a problem individual nurses can solve alone; it’s a system-level issue that requires strategic leadership. Here’s how healthcare executives can step up:

1. Rethink Onboarding and Residency Programs

Traditional orientation models aren’t enough for this generation. New nurses need longer, more structured onboarding with simulation refreshers, shadowing, and direct skill assessments. Consider expanding nurse residency programs to 12-18 months and incorporating tiered competency evaluations.

2. Protect Preceptors From Burnout

Experienced nurses are already stretched thin. If they’re expected to train new grads, they need protected time and meaningful incentives. Develop dedicated preceptor roles, reduce their patient loads, and offer bonuses or career advancement pathways for mentorship.

3. Invest in Ongoing Skills Labs

Don’t assume nurses have fully mastered their clinical skills after onboarding. Establish regular hands-on labs where nurses of all experience levels can safely practice and refine procedures. Foster a culture where requesting a refresher is viewed not as a weakness but as a commitment to excellence.

4. Close the Supervision Gap

The move toward leaner staffing models has reduced layers of oversight, leaving new nurses without the guidance they need. Strengthen clinical leadership on each shift with charge nurses and team leaders trained to coach, not just manage.

5. Use Workforce Data to Identify At-Risk Units

If entire units are composed of nurses with fewer than three years of experience, that’s a red flag. Use workforce data to monitor turnover trends, experience levels, and patient acuity in real-time to proactively deploy support before issues escalate.

6. Make Retention Part of the Solution

Finally, nothing stabilizes a workforce like keeping experienced nurses on the floor. Competitive compensation is a consideration, but flexible scheduling options, mental health resources, and advancement opportunities that honor their expertise are equally important.

The Cure for Nurse Turnover Is Leadership That Listens

The so-called “July Effect” may be up for debate, but chronic nurse turnover’s impact is not. Every month, hospitals face the same conditions researchers once feared were confined to a single season: overwhelmed new grads, thin supervision, burned-out preceptors, and mounting patient risk. It’s a persistent threat to quality care, staff morale, and financial stability.

Healthcare leaders can no longer afford to treat nurse turnover as an inevitable cost of doing business. It’s time to confront it as the critical systems challenge it truly is. By investing in structured support, rethinking onboarding, protecting experienced staff, and building data-informed retention strategies, hospitals can turn the tide—not just for their balance sheets but also for the nurses and patients who rely on them daily.

The future of healthcare depends on a stable, skilled nursing workforce. Let’s make sure we’re building one. Schedule a free workforce consultation to see how ShiftMed can help.