Labor issues within the industry are expected to grow over the next few years, and leaders need to be proactive.
The talent shortage in the medical field isn’t likely to be resolved anytime soon.
In fact, a report from consulting firm Mercer predicts a shortage of more than 100,000 essential workers nationwide by 2028, meaning CEOs of many hospitals and health systems will have to think carefully about how to bolster their workforces.
For the study, Mercer used historical data and trends through 2023 to project labor market changes by state, city and microstatial area.
According to the analysis, if workforce trends hold, the number of U.S. health care workers is expected to reach 18.6 million in 2028, significantly more than the 16.9 million currently working in the industry. The projected growth is not expected to keep up with demand, which will increase to about 18.7 million in that period, leading to a worker shortage of more than 100,000.
“While these figures may not seem like a crisis in absolute terms, they will put additional strain on a system already strained by geographic and demographic disparities in access to health care,” the report said.
What is causing the shortage?
As demand outstrips supply, the workforce problem is only going to get worse.
As Americans are living longer than ever before and older adults are using more services, the needs of an aging society will require more workers.
But the supply side is moving in the opposite direction, with workers either leaving the industry or fewer entering clinical professions due to factors including burnout, uncompetitive compensation and pandemic-related reasons, Mercer highlighted.
Deficit and surplus
The good news is that not all states will face worker shortages: The researchers found that the shortages will vary by region and occupation.
Populous states such as California, Texas and Pennsylvania are projected to have more labor than they need, while New York and New Jersey will face larger deficits.
Even states that are expected to have an overall surplus may suffer from physician shortages in certain occupations. For example, California and Texas have the largest physician shortages, while states like Pennsylvania, Massachusetts, and Minnesota have large physician surpluses.
The report said the national supply of registered nurses will exceed demand, resulting in a surplus of nearly 30,000 by 2028. Still, states like New York, Tennessee, and Massachusetts will face nurse shortages.
Mercer noted that among the occupations surveyed, nurses are expected to have the highest average annual growth rate (3.5 percent), while nursing assistants have the lowest growth rate (0.1 percent).
How should CEOs respond?
Understanding how their region will be affected by workforce shortages in the coming years can give hospital CEOs a better idea of how to improve talent recruitment and retention.
Specifically with regard to compensation, knowing whether there is a physician shortage in your state, for example, can influence decisions about whether to offer more competitive salaries to workers in your area or recruit from a state with a physician surplus.
“Prioritize positions that are essential to expanding your services and fill them as quickly as possible,” Mercer said. Build a pipeline that includes partnerships with local colleges and schools to improve access to future employees.
The most important thing is to focus on the employees who are currently with the organization. Employee turnover is costly in both the short and long term, so avoiding employee loss is paramount. This requires investment and consideration in employee benefits, as well as creating benefits such as flexible schedules and career progression.
For example, investing in automation to reduce the administrative burden on clinical workers will not only improve retention but also reduce demand, Mercer noted.
“Actions should be prioritized against a long-term vision. Isolated actions to address ‘today’s problems’ will not lead to sustained success and will only waste limited resources,” the report states. “The path to sustained success requires comprehensive data analysis to inform decision-making and prioritizing actions based on the highest return on investment.”
