Nurse employment is down—but salaries are up

By Lauren Rewers

Dr. Buerhaus and team’s study is a much-needed infusion of information about the clinical workforce—at a time when health care leaders have never been more concerned about staffing. Broadly speaking, the team’s findings are consistent with what my fellow experts and I are hearing from C-suites across the country and care continuum: the health care labor market is on shaky ground, and stabilizing the workforce will be one of the industry’s major focuses for years to come.

So how should leaders incorporate this study’s conclusions into their own workforce plans? See our four takeaways below.

Four takeaways for health care leaders

1. Widening compensation differentials by site-of-care are setting up a cross-continuum war for clinical talent.

   Compensation differentials between care sites are not new, particularly between hospitals and skilled nursing facilities. But the widening compensation gap Buerhaus identifies between these sites of care places makes already tenuous nursing home staffing an existential threat, as inpatient staffing shortages create a negative vacuum pressure drawing post-acute clinicians to comparatively lucrative bedside roles. This competition for staff is likely inevitable. But hospitals may have to support their post-acute partners to train or recruit staff regardless, lest they experience debilitating discharge delays due to SNF bed closures.



2. The true barrier isn’t decreasing applications, but a fewer number of clinical and educational experts.

   Buerhaus rightly raises the alarm on a declining number of nursing school applicants in 2020. What this trend belies is that fact that our nursing education system can’t handle more students, even they did receive more applications. Schools have long struggled with a shortage of nursing faculty. And staffing shortages within clinical sites make it difficult to safety increase clinical rotation opportunities. While addressing these structural problems may not be the industry focus right now, leaders will have to turn their attention here in the not-so-distant future to stave off future shortages.



3. Rising labor costs are here to stay.

   To be clear, it’s great to see wages rise—particularly among LPNs and nursing assistants who averaged hourly rates of just $23.32 and $14.77 respectively in May of 2019. These wage gains are critically important to financially stabilize the clinicians not only underpin care delivery broadly speaking, but who are often the primary caretakers of our most vulnerable: seniors. Given that we expect for these staffing shortages to persist, health care providers should think of these rising wages not as temporary, pandemic-triggered investments, but as permanent changes to their workforce strategy—and readjust their cost structure accordingly.



4. Equity must underpin future workforce strategy.

Buerhaus notes that though the labor market is becoming more candidate-centric, these advantages have not been equitably distributed. Specifically, clinicians of colors experienced persistently higher unemployment rates than their white peers. In other words: workforce leaders still have much room to grow to create inclusive work environments reflective of their patient population. Doing so must be a central component of the next phase of workforce strategy.

The bottom line: Shortages are here to stay. Leaders are likely entering a future in which they will need not only to re-shape their organization’s employee value proposition, but fundamentally change the way they deliver care so our systems can do so safely and effectively with a fewer number of clinicians.

Help us help you

This study also underscored an industry-wide sentiment: we are in desperate need of data to help us understand precisely how the pandemic impacted the clinical workforce and guide the path forward.

Help us equip you with this data by contributing to our 2021 Advisory Board Hospital Turnover and Vacancy Survey. You can do so using this survey link by Wednesday, January 26. We’ll share national results in a ready-to-present slide deck.