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.
Livonia, Mich.-based Trinity Health is experimenting with paying its employees by the day in a bid to recruit and retain staff, according to a Dec. 13Grand Rapids Business Journal report.
Trinity, which will initially roll out the initiative at Trinity Health Grand Rapids, Trinity Health Medical Group and several locations outside Michigan, is partnering with financial services company DailyPay to provide earned wage access (EWA) to its employees, the report said.
Through EWA, employees can access their pay on a daily basis, allowing them to pay bills, for example, without having to wait for the more traditional payday and therefore avoiding the possibility of overdue fees. Employees would pay $2.99 to gain such early access.
The pay model, which will be available for all pay scales across Trinity except for the highest earners, was piloted across select Trinity locations about four months ago. It will eventually be rolled out to all Trinity locations over the next few years, with all West Michigan employees signed up by 2025, the report said.
The trend of “quiet quitting” has recently gained traction on social media, referring to a phenomenon in which workers to reduce their enthusiasm at work and stick to the minimum expectations of their role. Some professionals, including Generation Z workers, have embraced the concept as an increased form of work-life balance, and others see it as a lesser-version of actually quitting. Regardless of how an individual interprets the idea, the concept is not new among the U.S. workforce or in healthcare, according to Jeremy Sadlier, executive director of the American Society for Healthcare Human Resources Administration.
“Before the term quiet quitting was in vogue, we were talking about employees who would ‘quit and stay,'” said Mr. Sadlier, who previously served as a market director of human resources and provided operational support at Advocate Aurora Health, an organization with dual headquarters in Downers Grove, Ill., and Milwaukee. “In essence, it’s the same concept with a nearly identical motivation. No matter the term used, many disengaged employees will stick around long after they’re finding motivation and stimulation in their work.”
In healthcare, this phenomenon has only grown. An April Galluppoll found that 34 percent of U.S. employees were actively engaged at work in 2021, compared to only 32 percent this year. Healthcare professionals saw the largest dip in engagement, with their engagement scores dropping nine points year over year.
Mr. Sadlier noted that this trend can have significant effects in the industry.
“Any lack of engagement on the part of staff ultimately impacts patient care, teamwork, safety and throughput, all of which impact the financial health of an organization and the patient experience. It’s incredibly important for leaders to focus on engagement, growth opportunities, and to recognize and reward hard work. These are a few ways to focus on your employees to help them feel engaged with their work,” he said.
Still, quiet quitting doesn’t look significantly different in healthcare than it does in other industries, according to Mr. Sadlier. “Colleagues in other industries like hospitality and retail, for example, all talk about a lack of willingness among workers to pick up extra shifts, or work beyond the bare minimum requirements. That’s a sign of growing disengagement and may be quiet quitting,” he said. It is greatly concerning that, while the motivation may not be largely different than in other industries, the effects of quiet quitting in healthcare have a direct connection to patient care, quality and safety, according to Mr. Sadlier.
He also said lower patient experience scores may indicate that a hospital is experiencing decreased employee engagement, which can spread among all its staff.
“There’s an absolute hierarchy [in healthcare], and it doesn’t require somebody to work in healthcare to recognize that when physician engagement falters, that impacts nurses, and when nurses don’t feel engaged, that impacts the rest of the staff, whether it’s ancillary staff, support services,” he said. “There’s a trickledown effect to a lack of engagement at any part of the organization. Inevitably that impacts every position and is ultimately felt by those we serve.”
Additionally, he pointed to financial struggles at U.S. hospitals as a contributing factor for workloads increasing. On Aug. 29, Kaufman Hall released a new report that showed hospitals are experiencing some of the worst margins since the beginning of the COVID-19 pandemic. This means some organizations have had to implement layoffs and other cost-cutting measures.
“Cost-cutting measures are becoming harder to accomplish without having a direct effect on the care patients receive. When [full-time equivalents] are affected, in many cases the responsibilities are shifted to other members of the team. The additional responsibilities can lead to frustration and burnout and negatively impact employee engagement. These factors are what then lead to quiet quitting,” Mr. Sadlier said.
To avoid quiet quitting or disengagement, he recommends that hospitals provide open and honest communication, set and maintain realistic work expectations, closely monitor employee engagement, recognize and reward high performance through options that extend beyond pay, and provide opportunities for career growth.
At the same time, he acknowledged there’s no absolute formula to identify disengagement at the individual level.
“The more you round, the more that you spend time with your staff, the more likely you are to recognize changes in demeanor and perspective,” Mr. Sadlier said. “The sooner you recognize it, the sooner you’re able to have an influence on it. So that’s where the regular engagement for leaders and supervisors has the biggest benefit — recognizing [disengagement] early and trying to find a way to reenergize and reengage staff.”
During an interview with Fortune, Katarina Berg, Spotify’s chief human resources officer, said her company is working to avoid quiet quitting by encouraging a culture of trust where workers feel psychologically safe.
Her advice for leaders is to talk about “the part of quiet quitting that has to do with people not [being] trusted, and they also don’t trust their management team. Therefore, they don’t find any other resolution other than doing this type of very silent activism. So, I think with culture you always have to be proactive … and you have to be very deliberate and intentional.”
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:
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.
As companies navigate having both in-office and at-home workers, the role of the traditional office is being reconsidered.
Having less people in an office every day could mean cutting space, but those spaces need to better suit the workforce of today, executives say.
How that experience evolves could be the difference between workers coming back to the office smoothly or leaving their jobs.
As companies and workers continue to try to figure out where and how work will take place in a hybrid environment, the costs being spent on existing office spaces previously built around the 9-to-5, five-day workweek are being closely examined.
Flexibility has become the buzzword for both sides of the employee-employer power dynamic. Workers have been leveraging the empowerment gains they’ve made amid the pandemic and a tight labor market to maintain the personal time that has come with working from home. Companies, many fearful of eroding culture that could increase turnover as well as stifling innovation by having a mostly remote workforce, have tried to meet workers somewhere in the middle by gently prodding, not pushing, workers back to the office.
The question becomes then, how does that impact budgeting and spending on typically costly workspaces when a large portion of your workforce won’t be there every day, if it all? Is there an opportunity to cut costs, or do those spaces now require additional investment to try to draw workers who are at home back into the office?
Scott Dussault, the CFO of HR tech company Workhuman and himself a pandemic-era hire, is seeing the change firsthand.
“I always quote Larry Fink’s  letter [to CEOs] where he said no relationship has been changed more by the pandemic than the one between employer and employee; that’s never going to change and we’re never going back,” Dussault, a member of the CNBC CFO Council, said. “The concept of 9-to-5 in the office five days a week is gone – the keyword is going to be flexibility.”
For many companies that means retrofitting offices to meet this new normal and employee demands, while also investing in other tools to make sure connections are still being made efficiently – efforts that could mean spending more money even if square footage or leases are adjusted.
“I’m not so sure it’s going to be a cost negative,” Dussault said. “I’m not sure if people are going to take less real estate; they’re just going to change the way that real estate works.”
Workhuman is currently coming towards the end of its lease in its Boston-area headquarters, and Dussault said the company is considering expanding its space, which would provide a “clean slate” to adjust to this new working environment.
He recalled his time at a job in the 1990s where it was a “football field of cubicles” – the kind of situation where you could “go to work and sit in a cube all day and never interact with anybody – you truly could lose that connection.”
Dussault said he sees the office becoming what he calls a “collaboration destination,” part of a hybrid environment where while you might work from home on days where you’re catching up on work or emails, the office can serve as a space that is “all about connection.”
“You’re going to see a lot more open spaces, collaboration spaces, conference rooms, meeting rooms, break areas where people can sit and get together,” he said. “It’s going be focused on connection which I think frankly is positive and it is evolution – it’s going to be about making those connections more meaningful.”
That would mean investing more in things like a gym, where employees could take a physical break, or other spaces that would provide a place to take an emotional break or meditate, Dussault said, something he said results in costs shifting “from one bucket to another.”
“We need to understand and recognize that when employees are home and productive, they have those things, and we need to try to make sure that those things exist in the office as well,” he said.
That also puts a further onus on the investment in digital tools, because there still needs to be ways for workers to connect with peers even when they’re not in person.
“Companies always talk about how important employees are and how employees are the most important investment – they haven’t always acted that way,” he said. “This is a good thing that’s come out of the pandemic.”
Neal Narayani, chief people officer at fintech company Brex, noted that in 2019 the company had people coming into offices five days a week in San Francisco, New York, Vancouver, and Salt Lake City. At that time, “nobody worked from home, because it was seen as a negative,” Narayani said. But as the pandemic forced employees to work from home, where they successfully took on several large projects, that view shifted.
“We recognized very quickly that we were able to actually work more productively and faster, and that video collaboration is a very productive tool when you don’t have to commute somewhere to search the office for a conference room,” he said.
With a belief that a remote-first approach was the future of work, Brex leaned in. Of the company’s more than 1,200 employees, 45% are fully remote. The company still maintains those four office location hubs where workers can go if they want, but the company has altered its approach so that every process is designed for remote workers.
That also changed the thinking that went into those spaces as Brex planned out its growth.
“When you unwind the real estate costs, we were able to look at how many people would come into an office if we were to make it fully optional, and it was about 10%,” Narayani said. “So, we were able to move into a 10%, maybe even less, real estate option, and then take the rest of those dollars and repurpose that towards travel, towards talent development, towards diversity and inclusion efforts, and towards anything else that makes the employee experience better.”
“It turns out to be a much better experience for us because that real estate cost was very high, and those markets are very expensive,” he added.
Roughly a third of the cost of the company’s previous real estate strategy has been put into the company’s new off-site strategy, Narayani said, with other portions of that being used to pay for the four office spaces and other co-working spaces.
Larry Gadea, CEO of workplace technology company Envoy, said that he thinks many companies are looking at ways they can reduce costs right now, with office space spending as one area potentially ripe for cuts.
However, Gadea warns that “people need to be together with each other, they need to know each other.”
“They need to have a sense of purpose that’s unified, and you need to bring people together for that,” he said. “How are you going to bring people together when they’re all around the country? I think that there is a substantial amount of people thinking they’re going to be saving money on real estate, but United and other airlines and Hilton and other hotels are getting it instead.”
Gadea said that as companies try to manage a tight labor environment as well as other market challenges, more time needs to be spent on “thinking about how to bring teams together.”
“The number one reason that most people stick with a company is that they love the people they work with,” he said. “It can be a lot harder to love those people if you don’t ever see them because they turned off their video on Zoom or if they don’t even know them at all.”
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.