When patient days or volumes decrease, managers should do what with personnel costs?

• A. Increase wages
• B. Decrease personnel costs in relation to the decrease in volume
• C. Ignore budget
• D. Move funds from marketing

Answer: (B)

When patient days or volumes drop, staffing should be scaled to match the lower demand. Labor costs are a major and highly variable part of the budget, so adjusting personnel costs in proportion to the decrease helps keep costs aligned with work volume and protects financial performance. Implement flexible strategies instead of overstaffing, such as adjusting schedules, using per-diem or on-call staff, offering voluntary time off, or redeploying staff where feasible. Raising wages during a slowdown, ignoring the budget, or diverting funds from marketing doesn't address the reduced workload and can worsen financial strain.