Looking ahead to a year of belt-tightening

Looking ahead to a year of belt-tightening

https://mailchi.mp/92a96980a92f/the-weekly-gist-january-14-2022?e=d1e747d2d8

We’ve been having “year ahead” discussions with our health system members over the past few weeks, although it’s been difficult for some to carve out time for planning in the midst of the Omicron surge.

One common theme is that, from a financial perspective, 2022 is expected to be a more difficult year. For many systems, despite the trying COVID situation, the past two years have been financial record-setters. In 2020, systems benefited from a massive infusion of COVID relief funding from the government, and in 2021, they continued to enjoy enhanced reimbursement due to COVID, plus had a resurgence of volume as patients sought care that was previously postponed.

2022 looks to be a more “normal” year—meaning a return to the financial pressures of pre-pandemic times. Those include mounting price compression from payers, an accelerating shift of care from inpatient to outpatient settings, and increasing competition for patients from disruptors and others. At the same time, patient acuity will continue to rise, with patients presenting sicker and with more comorbidities. The cost of caring for those patients will escalate, as the workforce shortage drives labor costs higher and supply chain woes persist.

We’d anticipate a year or more of belt-tightening among many health systems, as they adjust to the post-pandemic environment.

Patients “with COVID” who are admitted for other reasons still strain hospitals

https://mailchi.mp/92a96980a92f/the-weekly-gist-january-14-2022?e=d1e747d2d8

As new COVID strain rages, a look inside a packed Louisiana hospital: 'We  haven't had many wins' | Coronavirus | theadvocate.com

Some pundits claim that current reporting on COVID hospital admissions is overly pessimistic, failing to account for a distinction between patients admitted explicitly “for COVID”, and those admitted for other reasons who also, incidentally, have COVID. The latter now comprise up to half of some health systems’ COVID patients.

In an article in The Atlantic this week, reporter Ed Yong rejects this dichotomy, on the grounds that it ignores both the significant number of people for whom COVID exacerbates underlying chronic conditions, as well as the challenges any patient with COVID poses to hospitals. As he points out, those patients still require isolation and special safety measures, further worsening the burden on an already-strained staff.

The Gist: For hospitals, dealing with endemic COVID will mean establishing strategies to manage COVID-positive patients without postponing much needed non-emergency care, and without overly taxing a stretched workforce. Downplaying the burden of “incidental COVID” is not helpful, but sustaining operations while on perpetual crisis footing will prove untenable.

Omicron exacerbates existing staffing shortages

https://mailchi.mp/0b6c9295412a/the-weekly-gist-january-7-2022?e=d1e747d2d8

  1. The incredibly contagious new coronavirus variant is sidelining healthcare workers with breakthrough infections and quarantines, as patients flood into hospitals across the country. While hospitals are reporting that most infected patients are less sick, the sheer number of patients is pushing an already stressed system into crisis. 

The Gist: Given mounting evidence that Omicron is both causing less severe disease and evading vaccines, health systems will need to balance employee COVID testing and quarantine protocols against the constraints caused by mounting numbers of otherwise asymptomatic care workers out sick. As COVID becomes endemic, health systems must find a way to normalize operations even as they manage employee infections. It won’t be sustainable to continually revert to canceling non-emergent procedures (many of which carry clinical consequences to patients if they are delayed) and shifting to crisis standards of care. 

Consumer confidence unshaken by Omicron—at least so far

https://mailchi.mp/0b6c9295412a/the-weekly-gist-january-7-2022?e=d1e747d2d8

While Omicron’s rapid spread is causing COVID hospitalizations to surge once again, the impact on consumer confidence may be different this time around. Drawing on the most recent data from analytics firm Strata Decision Technology, the graphic above shows how hospital volumes have fluctuated throughout the pandemic. Hospital volumes mostly returned to pre-COVID levels early last summer, until the Delta surge caused patients to begin avoiding care across all settings once again. 

It remains to be seen if the forty percent of consumers who said they were less likely to seek non-emergency care during the Delta surge feel similarly about the Omicron spike. So far, consumer sentiment seems to be holding steady at last summer’s levels, though we’re still a few weeks away from Omicron’s expected peak. 

As the pandemic enters its third year, it’s also likely that consumers who have been delaying care will simply be unwilling or unable to hold off any longer. But even if Omicron doesn’t dissuade consumers from seeking non-COVID care, health systems will be hard pressed to accommodate both COVID and non-COVID care amid worrisome staffing shortages. 

US hospitals seeing different kind of COVID surge this time

https://apnews.com/article/coronavirus-pandemic-business-health-pandemics-49810a71d2ca21c4b56adb1d1092b6dd?fbclid=IwAR1KvwTCWhAHZwDlmzgzMiNL5xhBfOySbZwgzXs3IAXtWlHai_VRfni5eaQ

Registered nurse Rachel Chamberlin, of Cornish, N.H., right, steps out of an isolation room where where Fred Rutherford, of Claremont, N.H., left, recovers from COVID-19 at Dartmouth-Hitchcock Medical Center, in Lebanon, N.H., Monday, Jan. 3, 2022. Hospitals like this medical center, the largest in New Hampshire, are overflowing with severely ill, unvaccinated COVID-19 patients from northern New England. If he returns home, Rutherford said, he promises to get vaccinated and tell others to do so, too. (AP Photo/Steven Senne)

Hospitals across the U.S. are feeling the wrath of the omicron variant and getting thrown into disarray that is different from earlier COVID-19 surges.

This time, they are dealing with serious staff shortages because so many health care workers are getting sick with the fast-spreading variant. People are showing up at emergency rooms in large numbers in hopes of getting tested for COVID-19, putting more strain on the system. And a surprising share of patients — two-thirds in some places — are testing positive while in the hospital for other reasons.

At the same time, hospitals say the patients aren’t as sick as those who came in during the last surge. Intensive care units aren’t as full, and ventilators aren’t needed as much as they were before.

The pressures are nevertheless prompting hospitals to scale back non-emergency surgeries and close wards, while National Guard troops have been sent in in several states to help at medical centers and testing sites.

Nearly two years into the pandemic, frustration and exhaustion are running high among health care workers.

“This is getting very tiring, and I’m being very polite in saying that,” said Dr. Robert Glasgow of University of Utah Health, which has hundreds of workers out sick or in isolation.

About 85,000 Americans are in the hospital with COVID-19, just short of the delta-surge peak of about 94,000 in early September, according to the Centers for Disease Control and Prevention. The all-time high during the pandemic was about 125,000 in January of last year.

But the hospitalization numbers do not tell the whole story. Some cases in the official count involve COVID-19 infections that weren’t what put the patients in the hospital in the first place.

Dr. Fritz François, chief of hospital operations at NYU Langone Health in New York City, said about 65% of patients admitted to that system with COVID-19 recently were primarily hospitalized for something else and were incidentally found to have the virus.

At two large Seattle hospitals over the past two weeks, three-quarters of the 64 patients testing positive for the coronavirus were admitted with a primary diagnosis other than COVID-19.

Joanne Spetz, associate director of research at the Healthforce Center at the University of California, San Francisco, said the rising number of cases like that is both good and bad.

The lack of symptoms shows vaccines, boosters and natural immunity from prior infections are working, she said. The bad news is that the numbers mean the coronavirus is spreading rapidly, and some percentage of those people will wind up needing hospitalization.

This week, 36% of California hospitals reported critical staffing shortages. And 40% are expecting such shortages.

Some hospitals are reporting as much as one quarter of their staff out for virus-related reasons, said Kiyomi Burchill, the California Hospital Association’s vice president for policy and leader on pandemic matters.

In response, hospitals are turning to temporary staffing agencies or transferring patients out.

University of Utah Health plans to keep more than 50 beds open because it doesn’t have enough nurses. It is also rescheduling surgeries that aren’t urgent. In Florida, a hospital temporarily closed its maternity ward because of staff shortages.

In Alabama, where most of the population is unvaccinated, UAB Health in Birmingham put out an urgent request for people to go elsewhere for COVID-19 tests or minor symptoms and stay home for all but true emergencies. Treatment rooms were so crowded that some patients had to be evaluated in hallways and closets.

As of Monday, New York state had just over 10,000 people in the hospital with COVID-19, including 5,500 in New York City. That’s the most in either the city or state since the disastrous spring of 2020.

New York City hospital officials, though, reported that things haven’t become dire. Generally, the patients aren’t as sick as they were back then. Of the patients hospitalized in New York City, around 600 were in ICU beds.

“We’re not even halfway to what we were in April 2020,” said Dr. David Battinelli, the physician-in-chief for Northwell Health, New York state’s largest hospital system.

Similarly, in Washington state, the number of COVID-19-infected people on ventilators increased over the past two weeks, but the share of patients needing such equipment dropped.

In South Carolina, which is seeing unprecedented numbers of new cases and a sharp rise in hospitalizations, Gov. Henry McMaster took note of the seemingly less-serious variant and said: “There’s no need to panic. Be calm. Be happy.”

Amid the omicron-triggered surge in demand for COVID-19 testing across the U.S., New York City’s Fire Department is asking people not to call for ambulance just because they are having trouble finding a test.

In Ohio, Gov. Mike DeWine announced new or expanded testing sites in nine cities to steer test-seekers away from ERs. About 300 National Guard members are being sent to help out at those centers.

In Connecticut, many ER patients are in beds in hallways, and nurses are often working double shifts because of staffing shortages, said Sherri Dayton, a nurse at the Backus Plainfield Emergency Care Center. Many emergency rooms have hours-long waiting times, she said.

“We are drowning. We are exhausted,” Dayton said.

Doctors and nurses are complaining about burnout and a sense their neighbors are no longer treating the pandemic as a crisis, despite day after day of record COVID-19 cases.

“In the past, we didn’t have the vaccine, so it was us all hands together, all the support. But that support has kind of dwindled from the community, and people seem to be moving on without us,” said Rachel Chamberlin, a nurse at New Hampshire’s Dartmouth-Hitchcock Medical Center.

Edward Merrens, chief clinical officer at Dartmouth-Hitchcock Health, said more than 85% of the hospitalized COVID-19 patients were unvaccinated.

Several patients in the hospital’s COVID-19 ICU unit were on ventilators, a breathing tube down their throats. In one room, staff members made preparations for what they feared would be the final family visit for a dying patient.

One of the unvaccinated was Fred Rutherford, a 55-year-old from Claremont, New Hampshire. His son carried him out of the house when he became sick and took him to the hospital, where he needed a breathing tube for a while and feared he might die.

If he returns home, he said, he promises to get vaccinated and tell others to do so too.

“I probably thought I was immortal, that I was tough,” Rutherford said, speaking from his hospital bed behind a window, his voice weak and shaky.

But he added: “I will do anything I can to be the voice of people that don’t understand you’ve got to get vaccinated. You’ve got to get it done to protect each other.”

Nursing home staff shortages are worsening problems at overwhelmed hospitals

https://www.washingtonpost.com/health/2021/12/28/nursing-home-hospital-staff-shortages/

Nursing home staff shortages are worsening problems at overwhelmed hospitals  - The Washington Post

At the 390-bed Terrace View nursing home on the east side of Buffalo, 22 beds are shut down. There isn’t enough staff to care for a full house, safely or legally.

That means some fully recovered patients in the adjacent Erie County Medical Center must stay in their hospital rooms, waiting for a bed in the nursing home. Which means some patients in the emergency department, who should be admitted to the hospital, must stay there until a hospital bed opens up. The emergency department becomes stretched so thin that 10 to 20 percent of arrivals leave without seeing a caregiver — after an average wait of six to eight hours, according to the hospital’s data.

“We used to get upset when our ‘left without being seen’ went above 3 percent,” said Thomas Quatroche, president and chief executive of the Erie County Medical Center Corp., which runs the 590-bed public safety net hospital.

Nursing home bed and staff shortages were problems in the United States before the coronavirus pandemic. But the departure of 425,000 employees over the past two years has narrowed the bottleneck at nursing homes and other long-term care facilities at the same time that acute care hospitals are facing unending demand for services due to a persistent pandemic and staff shortages of their own.

With the omicron variant raising fears of even more hospitalizations, the problems faced by nursing homes are taking on even more importance. Several states have sent National Guard members to help with caregiving and other chores.

Hospitalizations, which peaked at higher than 142,000 in January, are rising again as well, reaching more than 71,000 nationally on Thursday, according to data tracked by The Washington Post. In some places, there is little room left in hospitals or ICUs.

About 58 percent of the nation’s 14,000 nursing homes are limiting admissions, according to a voluntary survey conducted by the American Health Care Association, which represents them. According to the U.S. Bureau of Labor Statistics, 425,000 employees, many of them low-paid certified nursing assistants who are the backbone of the nursing home workforce, have left since February 2020.

“What we’re seeing on the hospital side is a reflection of that,” said Rob Shipp, vice president for population health and clinical affairs at the Hospital Association of Pennsylvania, which represents medical providers in that state. The backups are not just for traditional medical inpatients ready for follow-up care, he said, but psychiatric and other patients as well.

A handful of developmentally disabled patients at Erie County Medical Center waited as long as a year for placement in a group setting, Quatroche said. Medical patients recovered from illness and surgery who cannot go home safely may wait days or weeks for a bed, he said.

“I don’t know if everyone understands how serious the situation is,” Quatroche said. “You really don’t know until you need care. And then you know immediately.”

Remarkably, despite the horrific incidents of death and illness in nursing homes at the outset of the pandemic, more staff departures have come during the economic recovery. As restaurants and shops reopened and hiring set records, nursing homes continued to bleed workers, even as residents returned.

Nursing home staff shortages are worsening problems at overwhelmed hospitals  - The Washington Post

Nearly 237,000 workers left during the recovery, data through November show. No other industry suffered anything close to those losses over the same period, according to the Bureau of Labor Statistics.

Workers in the broader health-care industry have been quitting in record numbers for most of the pandemic, plagued by burnout, vulnerability to the coronavirus and poaching by competitors. Low-wage workers tend to quit at the highest rates, Labor Department data show, and nursing home workers are the lowest paid in the health sector, with nonmanagerial earnings averaging between $17.45 an hour for assisted living to $21.19 an hour for skilled nursing facilities, according to the BLS.

Nursing home occupancy fell sharply at the start of the pandemic, but inched back upward in 2021, according to the nonprofit National Investment Center for Seniors Housing and Care. One major force that held it back was worker shortages.

“Operators in the business have said we could admit more patients, but we cannot find the staff to allow that to happen,” said Bill Kauffman, senior principal at the organization.

Shortages have spawned fierce talent wars in the industry, Brookdale Senior Living Chief Executive Officer Cindy Baier said in a recent earnings call. When they don’t have enough workers, restaurants can reduce service hours and hospitals can cut elective surgeries, but nursing homes don’t have the option of eliminating critical services, she said. They must close beds.

“We are in the ‘people taking care of people’ business around-the-clock, 365 days a year,” she said.

Nursing homes tend to gain workers during a recession but can struggle to hire during expansions, according to an analysis of county-level data from the Great Recession recently published in the health care provision and financing journal Inquiry.

Steady income from their resident population and government programs such as Medicaid makes them recession-proof, and their low pay and challenging work conditions mean they’re chronically understaffed, said one of the study’s authors, Indiana University health-care economist Kosali Simon.

When recessions occur, nursing homes go on a hiring spree, filling holes in their staff with qualified workers laid off elsewhere.

“People during a recession may lose their construction jobs or jobs in retail sectors, and then look for entry-level positions at places like nursing homes where there is always demand,” Simon said.

Now, amid the Great Resignation” and the hot job market, the opposite is happening. In sparsely populated areas and regions where pay is lower, the problem is even worse.

The Diakonos Group, which operates 26 nursing homes, assisted-living facilities and group homes in Oklahoma, closed an 84-bed location for seniors with mental health needs in May “simply because we couldn’t staff it any longer,” said Chief Executive Officer Scott Pilgrim. Patients were transferred elsewhere, including Tulsa and Oklahoma City, he said.

The home in rural Medford, which depended entirely on Medicaid payments, “was never easy to staff, but once we started through covid and everything, our staff was just burned out.”

Diakonos boosted certified nursing assistants’ pay from $12 an hour and licensed practical nurses’ pay from $20 an hour, used federal and state assistance to offer bonuses and employed overtime, but workers kept leaving for better health-care jobs and positions in other industries, he said.

“I’ve never been able to pay what we ought to pay,” Pilgrim said. Eventually he began to limit admissions and eventually was forced to close.

“The hospitals are backed up,” he said. “They’re trying to find anywhere to send people. We get referrals from states all around us. The hospitals are desperate to find places to send people.”

In south central Pennsylvania, SpiriTrust Lutheran is not filling 61 of its 344 beds in six facilities because of the worker shortage, said Carol Hess, the company’s senior vice president.

“I have nurses who went to become real estate agents,” she said. “They were just burned out.”

Pay raises of $1 to $1.50 an hour and bonuses brought the lowest-paid workers to about $15 an hour, Hess said, and the company is planning a recruiting drive after Jan. 1. But the prognosis is still grim.

“We’re competing with restaurants for our dining team members,” Hess said. “We’re competing with other folks for cleaning and laundry and others.” In the area around Harrisburg where SpiriTrust employees live, some schools that turned out certified nurse assistants closed during the pandemic and haven’t reopened.

The nursing homes have begun borrowing licensed practical nurses from WellSpan Health, the nearby hospital system that discharges many of its patients to SpriTrust after they recover. About 15 have began their orientations this month, she said, and the two systems are collaborating to pay them.

The bed shortage is causing backups that can average several days in the hospital, said Michael Seim, the hospital system’s chief quality officer. That gives the hospitals an interest in helping any way they can, he said.

“We have between 80 and 100 patients waiting for some type of skilled care,” Seim said this month. The hospital has begun caring for more people at home, enrolling 400 people so far in a program that sends clinicians to check on them there. More than 90 percent have said they are happy with the program.

“I think the future of hospital-based care is partnerships,” Seim said. “It’s going to be health systems partnering across their service areas … to disrupt the model we have.”

5 key strategy trends to watch in 2022

The 5 Biggest Technology Trends In 2022

Another challenging year defined by the continued COVID-19 fight and vaccination drives has created a unique healthcare landscape. Pandemic-induced telehealth booms, continued strain due to understaffing and pressure from big tech disruptors are just some of the issues that have presented themselves this year.

Here are five major trends that hospitals and health systems may see in 2022. While some present challenges, others present significant opportunities for healthcare facilities.

Workforce pressure 

Record numbers of workers have quit their jobs in 2021, with some 4.4 million people quitting in September. That means that 1 in 4 people quit their jobs this year across all industries. Around 1 in 5 healthcare workers have left their positions, creating issues with understaffing and lack of resources in hospitals and health systems. Stress, burnout and lack of balance have all been cited as reasons for staff leaving their roles. An increase in violence toward medical professionals, continued COVID-19 surges and low pay and benefits have contributed to the exodus of healthcare workers. None of those problems seems poised to disappear come 2022, so the new year could bring continued workforce and staffing challenges. 

Pressure from disruptors 

Big tech and retail giants have continued their push into healthcare this year. Companies like Apple, Amazon and Google stepped up their game in the wearables market. Pharmacy and retail chains Walmart and CVS Health both detailed their intended expansions into primary care. The pandemic also encouraged big corporations outside the healthcare sector, like Pepsi and Delta Airlines, to consider hiring CMOs to make sense of public health regulations guide them on their policy. These moves all mean there is a tightening of competition for the top physicians and hospital executives. Going into 2022, health systems may be under pressure to hang onto top talent and keep patients from using other convenient health services offered by retail giants.

Health equity 

The unequal toll of the pandemic on people of color both medically and economically helped shed a light on the rampant inequities in American healthcare and society at large. Indigineous, Black and Hispanic people were much more likely than white or Asian people to suffer severe illness or require hospitalization as a result of COVID-19. Increasing numbers of hospitals, health systems and organizations are starting initiatives to advance health equity and focus on the socioeconomic drivers of health. The American Medical Association launched a language guide to encourage greater awareness about the power of language. Z-code usage has also been encouraged by CMS to increase knowledge and data about the social determinants of health. Next year, the perspective of health as holistic instead of just a part of an individual’s life will continue, with special attention being paid to social drivers.

Telehealth expansion

The pandemic helped the telemedicine industry take off in a big way. Telehealth was often the only healthcare option for many patients during the height of the lockdown measures introduced during the pandemic. Despite a return to in-person visits, telehealth has retained its popularity with patients. Some advocates argue that telehealth can help increase access to healthcare and improve health equity. About 40 percent of patients said that telehealth makes them more engaged and interact more frequently with their providers. However, while Americans see telehealth as the future of healthcare, a majority still prefer in-person visits. Regardless of patient opinion, telehealth will remain a key part of health strategy. In late December, the FCC approved $42.7 million in funding for telehealth for 68 healthcare providers. This suggests that there are investments and subsidies available in the future for health systems to bolster their telehealth services. 

Climate change

At the 2021 UN Climate Conference, Cop26, in Glasgow, Scotland, hospitals and health systems acknowledged the role they have to play in mitigating the effects of climate change. Hospitals and health systems shed light on the health-related effects of climate change, such as illness and disease from events like wildfires and extreme weather. Health systems are also becoming more aware of their own contributions to climate change, with the U.S. healthcare system emitting 27 percent of healthcare emissions worldwide. To that end, HHS created an office of climate change and health equity that will work alongside regulators to reduce carbon emissions from hospitals. More health systems too are taking charge and pledging net neutrality and zero carbon emissions goals, including Kaiser Permanente and UnitedHealth group. It’s expected that more systems will follow suit in the coming year and make more concrete plans to address emissions reduction.

Jobless claims: Another 205,000 individuals filed new claims last week

https://finance.yahoo.com/news/weekly-unemployment-claims-week-ended-dec-18-2021-232812196.html

New weekly jobless claims held below pre-pandemic levels last week, further underscoring still-solid demand for labor heading into the new year. 

The Labor Department released its latest weekly jobless claims report Thursday at 8:30 a.m. ET. Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg:

  • Initial jobless claims, week ended Dec. 18: 205,000 vs. 205,000 expected and a downwardly revised 205,000 during prior week 
  • Continuing claims, week ended Dec. 11: 1.859 million vs. 1.835 million expected and an upwardly revised 1.867 million during prior week

This week’s new jobless claims report coincides with the survey week for the December monthly jobs report from the Labor Department, offering an early indication of the relative strength expected in that print due for release in early January. 

At 205,000, initial unemployment claims were expected to come in below even pre-pandemic levels yet again, with jobless claims having averaged around 220,000 per week throughout 2019. Earlier this month, first-time unemployment filings fell sharply to 188,000, or the lowest level since 1969. And based on the latest report, the four-week moving average for new claims was near its lowest in 52 years, ticking up by 2,750 week-over-week to reach 206,250. 

Continuing claims have also come down sharply from pandemic-era highs, albeit while remaining slightly above the 2019 average of about 1.7 million. This metric, which counts the total number of individuals claiming benefits across regular state programs, came in below 2 million for a fourth straight week and reached the lowest level since March 2020.

“The claims data indicate strong demand for workers and a reluctance by businesses to lay off workers,” Rubeela Farooqi, chief economist for High Frequency Economics, wrote in a note. “However, disruptions around Omicron and Delta could be a headwind if businesses have to close for health-related reasons.”

“Overall, the direction in the labor market recovery remains positive, with demand still strong,” she added. “Labor shortages are persisting, preventing a stronger recovery, although these appeared to ease somewhat in November.” 

And indeed, policymakers have also taken note of the improving labor market situation. In a press conference last week, Federal Reserve Chair Jerome Powell maintained, “Amid improving labor market conditions and very strong demand for workers, the economy has been making rapid progress toward maximum employment.And at the close of the Federal Open Market Committee’s latest policy-setting meeting, officials decided to speed their rate of asset-purchase tapering, paring back some crisis-era support in the economy as the recovery progressed. 

Many Americans have also cited solid labor market conditions, especially as job openings hold at historically high levels. In the Conference Board’s latest Consumer Confidence report for December, 55.1% of consumers surveyed said jobs were “plentiful.” While this rate was down slightly from November’s 55.5%, it still represented a “historically strong reading,” according to the Conference Board. 

CFOs rank ‘retention, retention, retention’ as top priority for 2022: Deloitte

Gartner's 2022 Top Strategic Technology Trends. Old Problems. Old Trends.  New Names.

Dive Brief:

  • CFOs rank the challenge of attracting and retaining employees far above other internal risks for 2022, citing labor shortages and the difficulty of crafting a balance between remote and in-office work, Deloitte found in a quarterly survey.  
  • “The number of times CFOs cited talent/labor and related issues heavily outweighed other priorities for 2022,” Deloitte said Thursday in a report on the survey of Fortune 500 CFOs. “‘Retention, retention, retention’ was a resounding refrain, including through wages and incentives.”
  • Eighty-eight percent of the 130 respondents said they will use a hybrid work model next year, 92% will increase automation and 41% expect to shrink their companies’ real estate footprint, Deloitte said.

Dive Insight:

The slow return of workers from coronavirus lockdowns has led to labor shortages, competition for hires and an increase in wages.

Employees are switching jobs for higher pay at a near-record pace. The quits rate, or the number of workers who left their jobs as a percent of total employment, rose from 2.3% in January to 2.8% in October, the second-highest level in data going back to 2000, the U.S. Labor Department said. The quits rate hit a high of 3% in September.

Attracting and retaining employees vaulted to the No. 2 ranking of business risks for 2022 and the next decade, from No. 8 a year ago, according to a global survey of 1,453 C-suite executives and board members by Protiviti and NC State University. (Leading the list of risks for 2022 is the impact on business from pandemic-related government policy).

Companies are trying to hold on to workers, and attract hires, by raising pay. Private sector hourly wages rose 4.8% in November compared with 12 months before, according to the Labor Department.

Tight labor markets and the highest inflation in three decades have prompted companies to budget 3.9% wage increases for 2022 — the biggest jump since 2008, according to a survey by The Conference Board.

The proportion of small businesses that raised pay in October hit a 48-year high, with a net 44% increasing compensation and a net 32% planning to do so in the next three months, the National Federation of Independent Business said last month.

CFO respondents to the Deloitte survey said they plan to push up wages/salaries by 5.2%, a nine percentage point increase from their 4.3% forecast during the prior quarter.

“Talent/labor — and several related issues, including attrition, burnout and wage inflation — has become an even greater concern of CFOs this quarter, and the challenges to attract and retain talent could impinge on their organizations’ ability to execute their strategy on schedule,” Deloitte said.

The proportion of CFOs who feel optimistic about their companies’ financial prospects dropped to just under half from 66% over the same time frame.

“CFOs over the last several quarters have become a little more bearish,” Steve Gallucci, managing partner for Deloitte’s CFO program, said in an interview, citing the coronavirus, competition for talent, inflation and disruptions in supply chains.

CFOs have concluded that the pandemic will persist for some time and that they need to “build that organizational muscle to be more nimble, more agile,” he said.

At the same time, CFOs expect their companies’ year-over-year growth will outpace the increase in wages and salaries, estimating revenue and earnings next year will rise 7.8% and 9.6%, respectively, Deloitte said.

“We are seeing in many cases record earnings, record revenue numbers,” Gallucci said.

Describing their plans for capital in 2022, half of CFOs said that they will repurchase shares, 37% say they will take on new debt and 22% plan to “reduce or pay down a significant proportion of their bonds/debt,” Deloitte said.

CFOs view inflation as the most worrisome external risk, followed by supply chain bottlenecks and changes in government regulation, Deloitte said. The Nov. 8-22 survey was concluded before news of the outbreak of the omicron variant of COVID-19.

New jobless claims totaled 184,000 last week, reaching lowest since 1969

https://finance.yahoo.com/news/weekly-unemployment-claims-week-ended-dec-4-2021-192034644.html

Weekly U.S. jobless claims fell to 184,000, lowest level since 1969

New initial jobless claims improved much more than expected last week to reach the lowest level in more than five decades, further pointing to the tightness of the present labor market as many employers seek to retain workers. 

The Labor Department released its weekly jobless claims report on Thursday. Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg:

  • Initial unemployment claims, week ended Dec. 4: 184,000 vs. 220,000 expected and an upwardly revised 227,000 during prior week 
  • Continuing claims, week ended Nov. 27: 1.992 million vs. 1.910 million expected and a downwardly revised 1.954 million during prior week

Jobless claims decreased once more after a brief tick higher in late November. At 184,000, initial jobless claims were at their lowest level since Sept. 1969. 

“The consensus always looked a bit timid, in light of the behavior of unadjusted claims in the week after Thanksgiving in previous years when the holiday fell on the 25th, but the drop this time was much bigger than in those years, and bigger than implied by the recent trend,” Ian Shepherdson, chief economist for Pantheon Macroeconomics, wrote in an email Thursday morning. “A correction next week seems likely, but the trend in claims clearly is falling rapidly, reflecting the extreme tightness of the labor market and the rebound in GDP growth now underway.”

After more than a year-and-a-half of the COVID-19 pandemic in the U.S., jobless claims have begun to hover below even their pre-pandemic levels. New claims were averaging about 220,000 per week throughout 2019. At the height of the pandemic and stay-in-place restrictions, new claims had come in at more than 6.1 million during the week ended April 3, 2020. 

Continuing claims, which track the number of those still receiving unemployment benefits via regular state programs, have also come down sharply from pandemic-era highs, and held below 2 million last week. 

“Beyond weekly moves, the overall trend in filings remains downward and confirms that businesses facing labor shortages are holding onto workers,” wrote Rubeela Farooqi, chief U.S. economist for High Frequency Economics, in a note on Wednesday. 

Farooqi added, however, that “the decline in layoffs is not translating into faster job growth on a consistent basis, which was evident in a modest gain in non-farm payrolls in November.” 

“For now, labor supply remains constrained and will likely continue to see pandemic effects as the health backdrop and a lack of safe and affordable child care keeps people out of the workforce,” she added. 

Other recent data on the labor market have also affirmed these lingering pressures. The November jobs report released from the Labor Department last Friday reflected a smaller number of jobs returned than expected last month, with payrolls growing by the least since December 2020 at just 210,000. And the labor force participation rate came in at 61.8%, still coming in markedly below its pre-pandemic February 2020 level of 63.3%. 

And meanwhile, the Labor Department on Wednesday reported that job openings rose more than expected in October to top 11 million, coming in just marginally below July’s all-time high of nearly 11.1 million. The quits rate eased slightly to 2.8% from September’s record 3.0% rate. 

“There is a massive shortage of labor out there in the country that couldn’t come at a worst time now that employers need workers like they have never needed them before. This is a permanent upward demand shift in the economy that won’t be alleviated by companies offering greater incentives to their new hires,” Chris Rupkey, FWDBONDS chief economist, wrote in a note Wednesday. “Wage inflation will continue to keep inflation running hot as businesses fall all over themselves in a bidding war for talent.”