Accountable Healthcare - Healthcare employment sees gains, but labor shortages drag on: 5 reasons why
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April 24, 2023

Healthcare employment sees gains, but labor shortages drag on: 5 reasons why

Shortages in healthcare have long existed. And while some signs may point to easing labor pressures for hospitals, many professionals in the field are living a different story. 

A March report from Altarum indicated that healthcare employment had rebounded to pre-pandemic levels. The healthcare industry currently has 1.3 percent more jobs than it did in February 2020. But in March, healthcare only gained 33,900 jobs, down from the average monthly gain of 54,000 over the prior six months, according to the latest jobs report from the Bureau of Labor Statistics. 

Some heralded the data as the end of the labor shortage; those with boots on the ground were wary of conclusions. 

One thing is certain: Healthcare is still short on the labor it needs, and those shortages remain unprecedented. 

"This is unlike anything I've seen," Mark Smith, vice president of workforce strategy and analytics at Renton, Wash.-based Providence, told Becker's

Becker's spoke with six industry executives across five health systems to understand how there can be more healthcare workers than there were in 2020, yet not enough for 2023. 

Reason 1: Employment isn't growing proportionally across specialties

Although employment is growing across the overall healthcare sector, some specialties are still hurting. Hospital employment is near pre-pandemic levels and ambulatory is well above, but nursing and residential care remain 270,000 jobs below their 2020 average, according to Altarum's report. 

"What we saw was really strong growth in the ASC areas with a lag in skilled nursing and in our acute ministries," Mr. Smith said. 

Lagging workforce growth in residential care also impacts the hospital setting. 

"It makes it a challenge to provide care because you are going to care for patients in the acute care setting longer," Mr. Smith said. "And it really backs up across the continuum, all the way back to having the ability to perform surgeries. You can't perform a surgery without knowing that you can place a patient post-surgery." 

Reason 2: The generational gap

Many workers leaving the healthcare industry are tenured baby boomers and Gen Xers who took an early retirement around the beginning of the pandemic. This creates a skill gap between the workers coming in and the workers heading out, according to Max Buetow, president and CEO of Springfield, Mo.-based CoxHealth. 

"If you have a nurse or technician or someone who's working in our human resources department and has 10, 20 years of experience, it's hard to expect someone who's a new entrant into the workforce to be as efficient in the way they provide career services as someone with that much experience," he explained.

Mr. Buetow added that "because the head count may be the same, it doesn't necessarily mean that they're able to contribute in the exact same way. So, it's exciting to have new people. There's new passion coming back into the workforce. But, as we start to see baby boomers retire, they were providing a huge amount of value to our organizations, and it'll just take us some time to continue to train up our current workforce."

Reason 3: The new gig workforce brings challenges 

Several systems are rolling out flexible work options to help attract new — and young — healthcare talent. But a learning curve has accompanied the gig workforce, according to leaders from Chesterfield, Mo.-based Mercy. 

Mercy partnered with Trusted Health to become a pioneer in the space, rolling out an app that would allow nurses in the health system and surrounding area to pick up gig shifts. Although the initiative has been successful (and added 2,000 gig nurses to Mercy's pool), it isn't filling the deficit left behind by the full-time core in every case, according to Kayla Drady, Mercy's executive director of talent acquisition strategy and operations. 

"It's going to take more hearts, more humans, to fill the shift and complete the work in totality than before," said Cynthia Mercer, PhD, the system's chief administrative officer. 

Mercy is working to calibrate the layers of its workforce just right, so everyone can work at the top of their license and exercise their skills to their full potential. This can help fill the gaps, according to Dr. Mercer and Ms. Drady. 

Reason 4: Demand for services has risen

Healthcare has changed since the pandemic; there is more demand for services and higher levels of care are required, according to industry leaders. 

"That [demand] could be as a result of delayed care during the pandemic," said Mr. Buetow, with CoxHealth. "I think there could [also] be opportunities where certain health systems are seeing shifts in market share as patients are moving around in populations. But across the board, I do think there's a situation where we're seeing an increase in demand for healthcare services."

This issue has shown up at Providence, too, according to Mr. Smith. It might nullify pre-pandemic comparisons. 

"In our acute care settings, we're seeing higher acuity and longer length of stay," Mr. Smith said. "So while we might see pre-pandemic employment levels, we are seeing different types of patients than we saw before. I'm not sure that the numbers really can account for that level of acuity or the length of stay that we're experiencing right now."

An aging population also requires more caregivers, according to Gay Landstrom, PhD, RN, chief nursing officer of Livonia, Mich.-based Trinity Health. 

"The need for a larger healthcare workforce will continue to increase as our population ages," said Dr. Landstrom. "The U.S. Census Bureau reports that 16.8 percent of the population was 65 or older in 2021, and predicts that number will grow to 21 percent in 2030."

Reason 5: Burnout and turnover 

"Over the past two years, approximately 100,000 registered nurses left the workforce during the COVID-19 pandemic due to stress, burnout and retirement," Dr. Landstrom noted. "Another 610,388 RNs reported an 'intent to leave' the workforce by 2027, according to the latest NCSBN research." 

"Although nurses and other clinicians may retain their licenses, it does not mean they are willing to work in patient care," she said. 

Jim Benedict, president of Pittsburgh-based Allegheny Health Network, also pointed to high turnover. At Allegheny, a 14-hospital system with about 22,000 employees, turnover rates are higher than pre-pandemic and are more acute among the hardest-to-fill positions. The health system's current turnover rate is above 20 percent, and its goal is 10 percent to 15 percent. 

"We've got to get the joy back into the practice," Mr. Benedict told Becker's. "We do a tremendous amount of work around our wellness strategies, and we have good wellness scores. But, with the environmental issues that our caregivers face every day, we have got to find ways collectively as an industry and, quite frankly, as a country, to make sure that this is an attractive place to exercise people's vocations. They're healers, and we've got to make sure that they're in an environment where they can heal."

To help with this, he said Allegheny Health Network is examining workloads and looking at how to reduce administrative work for bedside nurses. 

He said the health system is also doing work with virtual nursing, particularly around admissions and discharges. Additionally, Allegheny is focused on building a pipeline of workers through involvement with high schools and seeking ways to engage with community members about healthcare careers.