The healthcare sector has been navigating an intransigent staffing crisis since the widespread layoffs during the first few months of COVID. The graphic above uses Bureau of Labor Statistics data to illustrate the impact of this labor shock on both total employment and employee compensation.
Across key healthcare settings, workplaces with the slowest recovery of total workers have seen the largest increases in employee earnings.Hospital employment largely tracked with the rest of the private sector; however, hospitals raised employee compensation by two percent more than the private sector, while recovering two percent fewer jobs.
It is important to note that the relationship between employment levels and employee compensation is not causal, as evidenced by the ongoing labor shortages in nursing facilities, despite boosting average pay over 20 percent. Rather, the data suggest that, for as long as the tight labor market persists,pay raises alone are not sufficient to recruit and retain talent. Plus, while inflation may be abating, it has still outpaced earnings growth since December 2021.
Given that many healthcare workers saw pay bumps early in the pandemic, some are left still feeling underpaid, even if their compensation over the past three years has more than kept pace with inflation.
Employers face a brutal increase in health-insurance premiums for 2023, Axios’ Arielle Dreher writes from a Kaiser Family Foundation report out this morning.
Why it matters: Premiums stayed relatively flat this year, even as wages and inflation surged. That reprieve was because many 2022 premiums were finalized last fall, before inflation took off.
“Employers are already concerned about what they pay for health premiums,” KFF president and CEO Drew Altman said.
“[B]ut this could be the calm before the storm … Given the tight labor market and rising wages, it will be tough for employers to shift costs onto workers when costs spike.”
🧠 What’s happening: Nearly 159 million Americans get health coverage through work — and coverage costs and benefits have become a critical factor in a tight labor market.
As hospitals and health systems continue to grapple with staffing shortages, employers are using perks beyond pay to recruit and retain talent.
Incentives beyond the norm are attractive to employees: They prove the employer values them personally, beyond their work performance.
These four health systems offer perks beyond pay, like extra paid time off, well-being coaches, adoption assistance and local discounts.
Food, entertainment and staycations
Nashville, Tenn.-based Vanderbilt Health said it will launch a new employee awards program in September that offers workers perks, discounts and a grand prize “staycation.”
The month-long Work Perks program will feature a website where employees can play games to earn perks in music and entertainment, health and wellness, dining and Nashville-area attractions, according to an Aug. 29 news release shared with Becker’s.
Workers will also be able to enter a drawing for a staycation. Five employees will win grand prizes including a one-night stay at a downtown hotel, passes to Nashville attractions, dinner at a local restaurant and a gift basket with items from Nashville businesses, including a winery and chocolate company, Vanderbilt Health said.
“We’re excited to show appreciation for our dedicated workforce in this way, and we’re grateful to so many generous partners to help make it happen,” Amy Schoeny, PhD, chief human resources officer, said in a release. “This is just one of the many benefits and perks that we offer to those who choose to pursue careers in making healthcare personal for our patients today and in the future.”
Work Perks will launch Sept. 5.
“We Hours” program
Marlton, N.J.-based Virtua Health told Becker’s it has instituted a “We Hours” program “to give employees more time to do the things that are important to them — from self-care to community service.”
The program offers eight additional hours of scheduled, paid time off per year for most of Virtua’s 13,000 employees.
“The ultimate goal is to encourage mindfulness and a healthy work-life balance,” Rhonda Jordan, Virtua’s executive vice president and chief human resources officer, told Becker’s. “We Hours are intended for colleagues to pursue something rewarding or fulfilling, such as volunteering, recognizing a religious or cultural event, or ‘recharging their battery’ with extra time away.”
Ms. Jordan said Virtua workers may also use the program for practical matters, such as a physician’s visit or attending to household repairs.
The program name stems from Virtua’s “Culture of We,” a set of guiding principles that include continuous learning and innovation, open communication and inclusive teamwork, among others.
A colleague committee developed the tenets in 2019, and employees are encouraged to share how they spend their We Hours in a private Facebook group, according to Ms. Jordan. She cited examples including photos from a visit to a botanical garden, a description of volunteer work helping nonprofit organizations, and a photo of the day one worker spent with her son, who’d been away serving in the U.S. Marine Corps.
“One of my favorite outcomes of the We Hours is that they invite us to learn more about our colleagues and the people, causes and activities that are most important to them,” Ms. Jordan adds.
Walking trails and well-being coaching
Charlotte, N.C.-based Atrium Health encourages all-around health through their LiveWell programs.
“[LiveWell] exists to support teammates in working meaningfully, eating healthfully, learning continuously and living fully … living their best lives so that we can deliver on the mission of Atrium Health,” Scott Laws, vice president of enterprise total rewards at Atrium Health, told Becker’s.
Physical health is encouraged through perks like discounted gym enrollment, tobacco cessation programs and on-site walking trails at Atrium Health facilities. Financial assistance is provided through free webinars and individual medication management consultations. One-on-one well-being coaches encourage employees to consider personal health.
Those that take advantage of the LiveWell resources are rewarded.
“By completing certain physical, personal and financial well-being goals — which include participation in wellness exams and programs or financial education — teammates are eligible for financial incentives, paid into their HSAs,” Mr. Laws said.
Adoption assistance
Springfield, Ill.-based Hospital Sisters Health System offers adoption assistance as part of its benefits package.
“HSHS provides financial support up to $7,500 per child for eligible adoption expenses to qualified colleagues,” Catie Sheehan, vice president of advocacy and communications at Hospital Sisters, told Becker’s.
Alicia Corman, an occupational therapist in the health system, was first to receive the benefit. After the adoption decree was signed, the human resources department helped her submit a breakdown of what the financial support would cover, Ms. Corman said in a video shared with Becker’s. The funds she received aided Ms. Corman and her husband in adopting their son.
“I’m very grateful because if you look across the U.S., adoption is not very supported in a workplace,” Ms. Corman said.
As RNs struggle to work through staffing shortages, their job satisfaction has sharply declined, with 67% saying they plan to leave their jobs within the next few years, according to a survey from the American Association of Critical-Care Nurses (AACN) published in Critical Care Nurse.
RNs cite poor work environments
For the survey, AACN collected responses from 9,862 nurses, 9,335 of which met the study criteria of being currently practicing RNs, in October 2021. The mean age was 46.5 years, and the mean years of experience was 17.8 years.
Of the participants, 78.3% worked in direct care, and 19.4% worked in a Beacon unit, meaning that their unit had been recognized by an AACN Beacon Award for Excellence. Half of the participants said they spent 50% or less of their time caring for Covid-19 patients, while the other half said they spent 50% or more.
To measure the health of a work environment, AACN looked at six standards:
Skilled communication
True collaboration
Effective decision-making
Meaningful recognition
Authentic leadership
Appropriate staffing
Overall, AACN found that nurses’ perceptions of quality on these six measures had declined across the board since the organization’s 2018 survey.
In particular, appropriate staffing was the lowest rated of all the standards at 2.33 out of 4, which is the lowest rating the standard has received since AACN first began the survey in 2006. Only 24% of RNs said their units had the right number of nurses with the right knowledge and skills more than 75% of the time—down from 39% who said the same in 2018.
In addition, there was a significant decline in how RNs rated the quality of care in their organizations and their units. Only 16% rated their organizations’ quality of care as excellent (compared to 24% in 2018), and 30% rated their units’ quality of care as excellent (compared to 44% in 2018). Over 50% of nurses said quality of care in their organization or unit has gotten somewhat or much worse over the last year.
Many nurses also reported difficulties with their physical and psychological well-being in the survey. For example, less than 50% of RNs said they felt their organization values their health and safety, a significant decline from 68% who said the same in 2018.
In addition, 40% of participants reported that they were not emotionally healthy. The percentage of RNs who reported experiencing moral distress also doubled from 11% in 2018 to 22% in 2021.
A significant portion of RNs also reported experiencing verbal abuse, physical abuse, sexual harassment, or discrimination over the past year. Of the 7,399 RNs who answered this question, 72% said they had experienced at least one negative incident, with verbal abuse being the most common at 65%, followed by physical abuse at 28%.
RN job satisfaction
Only 40% of RNs said they were “very satisfied” with their job, down from 62% who said the same in 2018. Further, a significant number of RNs in the survey reported planning to leave their jobs within the next few years.
Overall, 67% of RNs said they planned to leave their current position within the next three years, compared to 54% in 2018. Of this group, 36% said they planned to leave within the next year, with 20% planning to leave within the next six months.
According to the respondents, the top factors that could lead them to reconsider their decision to leave their job were a higher salary and more benefits (63%), better staffing (57%), and more respect from administration (50%).
“Without improvements in the work environment, the results of this study indicate that nurses will continue to exit the workforce in search of more meaningful, rewarding, and sustainable work,” the survey’s authors wrote. “It is time for bold action, and this study shows the way.” (Firth, MedPage Today, 8/3; Ulrich et al., Critical Care Nurse, 8/1)
Hard truths on the current and future state of the nursing workforce
Concerns about an imbalance in supply and demand in the nursing workforce have been around for years. The number of nursing professionals nationally may be healthy, but many nurses are not in the local areas, sites of care, or roles where they’re needed most. And many of today’s nurses don’t have the specialized skills they need, widening the existing gap between nurse experience and job complexity.
As a result, gaping holes in staffing rosters, prolonged vacancies, unstable turnover rates, and unchecked use of premium labor are now common.
Health care leaders need to confront today’s challenges in the nursing workforce differently than past cyclical shortages. In this report, we present six hard truths about the nursing workforce. Then, we detail tactics for how leaders can successfully address these challenges—stabilizing the nursing workforce in the short term and preparing it for the future.
Although the nursing shortage has attracted much attention in recent months, the healthcare workforce crisis is hitting at all levels of the labor force. As the graphic above shows, the attrition rate for all hospital workers in 2021 was eight percentage points higher than in 2019.
Among clinicians and allied health professionals, certified nursing assistants (CNAs) have the highest turnover levels. Given the demands of the job and relatively low pay, CNA openings have been consistently difficult to fill. But it’s become even harder to hire for the role in today’s labor market as job openings near an all-time high.
Although labor force participation rates have rebounded to 2019 levels, pandemic-induced economic shifts have led to a boom in lower-wage jobs. In 2021 alone, Amazon opened over 250 new fulfillment centers and other delivery-related work sites. The company is competing directly with hospitals and nursing facilities for the same pool of workers at many of these new sites.
In fact, our analysis shows that more than a quarter of hospital employees currently work in jobs with a lower median wage than Amazon warehouses. Health systems have historically relied on rich benefits packages and strong career ladder opportunities to attract lower-wage employees, but that’s no longer enough—Amazon and other companies have ramped up their benefits, such that they now meet, or even surpass, what many hospitals are providing.
The time has come for health systems to reevaluate their position in local labor markets, and better define and promote their employee value proposition.
While healthcare workers battle burnout, hospitals have been ramping up wages and other benefits to recruit and retain workers. It has created a culture of competition among health systems as well as travel agencies that offer considerably higher pay.
But other healthcare organizations are not hospitals’ only competitors. Some hospitals, particularly those in rural areas, are struggling to match rising employee pay among nonindustry employers such as Target and Walmart.
“We monitor and we’ve been looking and we ask around in the community and we can ask who’s paying what,” Troy Bruntz, CEO of Community Hospital in McCook, Neb., told Becker’s. “So we know where Walmart is on different things, and we’re OK. But if Walmart tried to match what Target’s doing, that would not be good.”
At Target, the hourly starting wage now ranges from $15-$24. The organization is making a $300 million investment total to boost wages and benefits, including health plans. Starting pay is dependent on the job, the market and local wage data, according to NPR.
Walmart raised the hourly wages for 565,000 workers in 2021 by at least $1 an hour, The New York Times reported. The company’s average hourly wage is $16.40, with the lowest being $12 and the highest being $17.
Meanwhile, Costco raised its minimum wage to $17 an hour, according to NPR. The federal minimum wage is $7.25.
Estimated employment for healthcare practitioners and technical occupations is 8.8 million, according to the latest data released March 31 by the U.S. Bureau of Labor Statistics. This includes nurse practitioners, physicians, registered nurses, physician assistants and respiratory therapists, among others.
In sales and related occupations, estimated employment is 13.3 million, according to the bureau. This includes retail salespersons, cashiers and first-line supervisors of retail salespersons, among others.
While retail companies up their wages, at least one hospital CEO is monitoring the issue. Healthcare leaders weigh their options
Mr. Bruntz said rising wages among retailers is an issue his organization monitors. Although Target does not have a store in McCook, there is a Walmart, where pay is increasing.
“I was quoted a few months ago saying Walmart was approaching $15 an hour, and we can handle that,” Mr. Bruntz said. “But when it gets to $20 or $25, it’s going to be an issue.”
He also said he cannot solely increase the wages of the people making less than $15 or less than $25 because he has to be fair in terms of wages for different types of roles.
Specifically, he said he is concerned about what matching rising wages at retailers would mean for labor expenses, which make up about half of the hospital’s cost structure.
“I double that half, that’s 25 percent more expenses instantly,” Mr. Bruntz said. “And how is that going to ratchet to a bottom line anything less than a massive negative number? So it’s a huge problem.”
Clinical positions are not the only ones hospitals and health systems are struggling to fill; they are encountering similar difficulties with technicians and food service workers. Regarding these roles, competition from industries outside healthcare is particularly challenging.
This is an issue Patrice Weiss, MD, executive vice president and chief medical officer of Roanoke, Va.-based Carilion Clinic, addressed during a Becker’spanel discussion April 4. The organization saw workforce issues not just in its clinical staff, but among environmental services staff.
“When you look at what … even fast food restaurants were offering to pay per hour, well gosh, those hours are a whole lot better,” she said during the panel discussion. “There’s no exposure. You’re not walking into a building where there’s an infectious disease or patients with pandemics are being admitted.”
Amid workforce challenges, Community Hospital is elevating its recruitment and retention efforts.
Mr. Bruntz touted the hospital as a hard place to leave because of the culture while acknowledging the monetary efforts his organization is making to keep staff.
He said the hospital has a retention program where full-time employees get a bonus amount if they are at the employer on Dec. 31 and have been there at least since April 15. Part-time workers are also eligible for a bonus, though a lesser amount.
“It also encourages staff [who work on an as-needed basis] to go part-time or full-time, and [those who are] part-time to go full-time,” Mr. Bruntz said. “That’s another thing we’re doing is higher amounts for higher status to encourage that trend.”
Additionally, Community Hospital, which has 330 employees, offers a referral bonus to staff to encourage people they know to come work with them.
“We want staff to bring people they like. [We are] encouraging staff to be their own ambassadors for filling positions,” Mr. Bruntz said.
He said the hospital also will offer employees a sizable market wage adjustment not because of competition from Walmart but because of inflation.
Graham County Hospital in Hill City, Kan., is also affected by the tight labor market, although it has not experienced much competition with retail companies, CEO Melissa Atkins told Becker’s. However, the hospital is struggling with competition from other healthcare organizations, particularly when it comes to patient care departments and nursing. While many hospitals have struggled to retain employees from travel agencies, Graham County Hospital has mostly been able to avoid it.
“As the demand increases, so does the wage,” Ms. Atkins said. “In addition to other hospitals offering sign-on bonuses and increased wages, nurse agency companies are offering higher wages for traveling nurse aides and nurses. We are extremely fortunate in that we have not had to use agency nurses. Our current staff has stepped up and filled in the shortages [with additional incentive pay].”
To combat this trend, the hospital has increased hourly wages and shift differentials, as many healthcare organizations have done. It has also provided bonuses using COVID-19 relief funds.
Overall, Mr. Bruntz said he prefers “not to get into an arms race with wages” among nonindustry competitors.
“It’s not going to end well for anybody. We prefer not to use that,” he said. “At the same time, we’re trying to do as much as possible without being in a full arms race. But if Walmart started paying $25 for a door greeter and cashier, we would have to reassess.”
Thousands of nurses at Stanford and Lucile Packard Children’s hospitals in Palo Alto, Calif., have authorized the union representing them to call a strike.
In an April 8 news release, the Committee for Recognition of Nursing Achievement said more than 4,500 nurses at Stanford and Packard, or 93 percent of all nurses eligible, voted in favor of strike authorization. They are calling on hospital management to adequately address staffing, citing consistent overtime and nurses’ complaints of inadequate resources, training or staff. They also seek improved access to mental health counseling, as well as competitive wages and benefits.
“The decision by members to overwhelmingly authorize a strike shows that we are fed up with the status quo of working conditions at the hospitals,” Colleen Borges, union president and a nurse in the pediatric oncology department, said in the release. “We need contracts that allow us to care for ourselves and our families so we can continue providing world-class care.”
Nurses authorized the strike after bargaining for the last 13 weeks and are working without contracts. The vote does not mean a strike will occur, but it gives the union the ability to issue an official strike notice.
In a statement shared with Becker’s, Stanford expressed its support for negotiations rather than a strike.
“We are committed, through good faith bargaining, to reach agreement on new contracts that provide nurses a highly competitive compensation package, along with proposals that further our commitment to enhancing staffing and wellness benefits for nurses,” the statement said.
The hospital also said it is taking the steps to prepare for the possibility of a strike, while hoping a strike is averted.
“Given the progress we have made by working constructively with the union, we should be able to reach agreements that will allow us to continue to attract and retain the high caliber of nurses who so meaningfully contribute to our hospitals’ reputation for excellence,” the statement read.
Beaufort (S.C.) Memorial Hospital has created a homebuyer assistance program to help staff purchase a home or refinance mortgages, with up to $10,000 in assistance.
To be eligible for the program, employees must be full time, have worked at the hospital for at least six months, attend a homebuyer education workshop and meet household income requirements, among other criteria, according to a Jan. 10 news release from the hospital.
Additionally, properties must be within a 15-mile radius of a designated Beaufort Memorial campus, be the buyer’s primary residence and have monthly mortgage payments of no more than 33 percent of monthly income.
Recipients can use the funds for down payments and closing costs, the release said.
The hospital is partnering with development financial institution CommunityWorks for the program.
“We know that homeownership provides stability, security and a means to building financial health and wealth for future generations,” Beaufort Memorial President and CEO Russell Baxley said. “We also recognize that a major obstacle can be coming up with the money needed for a down payment or closing costs. This assistance program will help our employees bridge that financial gap.”
Amid a nationwide staffing shortage, rising demand for nurses has led hospitals to increase salaries and other benefits to attract and retain workers, Melanie Evans reports for the Wall Street Journal.
Hospitals increase salaries, benefits to keep up with nursing demand
Hospitals across the country have been struggling amid staffing shortages, particularly of nurses, Evans reports. According to health care consultancy Premier, nurse turnover rates have increased to around 22% this year, up from the annual rate of about 18% in 2019.
“We are employing more nurses now than we ever have, and we also have more vacancies than we ever had,” said Greg Till, chief people officer at Providence Health & Services.
To retain their current nurses and attract new staff, many hospitals have increased their nurses’ salaries to remain competitive in the job market, Evans reports.
For example, HCA Healthcare, one of the largest hospital chains in the country, said it increased nurse pay this year to keep up with Covid-19 surges and compete with rivals also trying to fill vacant positions.
Similarly, Jefferson Health in May raised salaries for its nearly 10,000 nurses by 10% after the system discovered that rivals had increased their compensation. “The circumstances required it,” said Kate Fitzpatrick, Jefferson’s chief nurse executive.
In addition, Citizens Memorial Hospital in Bolivar, Mo., this month raised its nurses’ salaries by up to 5% after rivals in other nearby cities increased their workers’ wages. Sarah Hanak, Citizen Memorial’s CNO, said the hospital also increased the hourly wages of nurses working overnight shifts by around 15% to ensure sufficient staffing for those shifts.
“We were forced to,” Hanak said. “We absolutely have to stay competitive.”
Overall, the average annual salary for RNs, not including bonus pay, grew to $81,376, according to Premier—a 4% increase across the first nine months of the year. This is larger than the 3.3% increase in the average annual nurse salary for 2020 and the 2.6% increase in 2019, Evanswrites.
In addition to salary increases, some organizations, such as Providence, are also offering other benefits to attract and retain nurses, such as more time off, greater schedule flexibility, and new career development opportunities. Many hospitals are also hiring new graduates to work in specialized roles in ORs and other areas, allowing them to advance their careers more quickly than they would have before.
Overall, this rising demand for nurses has allowed those entering the workforce to negotiate higher salaries, more flexible working hours, and other benefits, Evans writes.
“I think you get to write your ticket,” said Tessa Johnson, president of the North Dakota Nurses Association.
Nurse compensation increases were inevitable—here’s why
It was inevitable that we would get to this point: baseline nurse compensation on a clear upward trajectory. Inevitable because this boils down to laws of supply and demand. Amid a clear nursing shortage, organizations are being forced to raise baseline compensation to compete for increasingly scarce qualified nurses. This is true in nearly every market, even for those considered to be ‘destination employers.’
If anything, what’s most surprising in the data from Premier is the moderated increase of around 4%. From a worker’s perspective, that’s not even covering cost of living increases due to inflation. However, amid this new data, it’s important to keep two things in mind:
Two considerations for health care leaders
New data only captures baseline compensation.Differentials—which organizations must standardize and expand across shifts, specialties, and even settings—plus overtime put baseline compensation much higher. Not to mention lucrative sign-on bonuses, that members tell us are increasingly table stakes in their markets. In general, we don’t recommend this type of incentive that does nothing for retention. You’re better off investing those resources in baseline compensation as well as beefing up your RN bonus plan to incentivize retention.
There is a new floor for wages (and it’s only going up from here).
Open questions (and important indicators) we are assessing
What happens to wages for entry-level clinical roles? As the shortage of RNs persists, organizations will need to make a shift to team-based models of care, and those are only possible with a stable workforce of entry-level personnel. Right now, that part of the health care workforce is anything but stable. When you consider their work and their wages in comparison to out-of-industry players that pay the same or better, that’s a clear area where investment is required.
Will the share of nurses working permanently with travel agencies return to pre-pandemic levels? That’s to say, what will those RNs who experienced the traveler lifestyle and pay value more moving forward: the flexibility and premium pay or stability of permanent employment? Even if this number stabilizes a couple percentage points above pre-pandemic levels, that will aggravate provider’s sense of shortage.
HENRY KOTULA 