January 14, 2022

Nurse employment is down—but salaries are up

Daily Briefing

    Nurse employment has dropped since the Covid-19 pandemic began, according to a study published in Health Affairs—but nurse salaries have risen.

    The study's authors say these changes could have long-lasting impacts on the industry, Shannon Firth reports for MedPage Today.

    Dec. 20 webinar: Omicron and the hard truths of the nurse staffing crisis

    Employment declines amid rising salaries

    For the study, researchers used data from the U.S. Census Bureau to compare the pre-pandemic period of October 2018 through December 2019 with the period after the pandemic began, stretching from April 2020 through June 2021.

    The study found that nurse employment dropped overall during the pandemic, with nurse assistants seeing a 10% drop in employment, licensed practical nurses seeing a 20% drop, and RNs seeing a 1% drop.

    Although the decline in RN employment was slight, it represented a sharp departure from the pre-pandemic trend, according to David Auerbach, from Montana State University who was an author on the study. "We've seen the total supply of RNs has just grown year after year for a couple of decades, pretty steadily," he said. "With the onset of the pandemic, it looks like that growth really has stopped."

    Further, unemployment numbers rose for all nurses in the second and third quarters of 2020, the study found. This was especially true among Asian, Black, Hispanic, and other non-white RNs and nursing assistants, who saw higher unemployment numbers than white RNs and nursing assistants, the study found.

    "This corresponds to roughly 16,000 more RNs and 30,000 more NAs in racial and ethnic minority groups who were unemployed in the second quarter of 2021 than there would have been if they had had the same unemployment rate as they had pre-pandemic in 2019," the study authors wrote.

    The study also found that the rate of entries into the nursing field is growing more slowly, as applicants to nursing programs grew just 1.5% in 2019-2020, compared to a 4.5% growth rate in 2018-2019.

    "We've already known that there's a big wave of baby boomer RNs who were eventually going to retire, but that is probably happening more quickly than it would have otherwise, and we're not making up for it on the entry side of the labor force," Auerbach said.

    However, while nurse employment numbers dropped during the pandemic, nurse salaries rose, the study found. Hourly earnings rose 9.4% among LPNs and 5.7% among nursing assistants during the pandemic. In addition, RNs saw a 2% increase in salaries.

    Auerbach noted that the study's findings are "hinting in the direction" of long-term problems, especially the "quicker loss" of more experienced RNs, which Auerbach said could lead to a supply problem for the nurse workforce that could last 5 to 10 years.

    And if entry into the nursing field is reduced as well, Auerbach said, the problem could persist for 10 to 20 years. (Firth, MedPage Today, 1/12)

     

    Advisory Board's take

    4 key takeaways for health care leaders

    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.
    5. 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.

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