Despite Recent Layoffs, Hospitals May Be Poised for Hiring

The second quarter of 2010 was not kind to hospitals.

April posted a record 18 mass layoffs of 50 employees or more in the hospital sector. And as I reported earlier this month, hospitals reported 2,200 payroll reductions in June, which followed 2,400 reductions in May. The last time that the nation's hospitals reported back-to-back months of payroll reductions was in 2000, when 2,200 jobs were lost between January and April, according to the Bureau of Labor Statistics.

Despite the reductions, David Cherner, managing partner of Health Workforce Solutions, LLC, says he remains “bullish” on hospital hiring, and believes hospitals in several markets across the country are poised to add staff—possibly by the end of this year or the first quarter of 2011.

“Overall, the demand for healthcare labor continues to strengthen, notwithstanding the fact that there were all of these massive layoffs,” Cherner says. “There are still a lot of challenges in terms of hospitals and healthcare employers getting ready for decreased reimbursements—and having to do with a lot less. But at the same time, you can only cut patient care services so much. In order to deliver quality care, you need people.”

HWS’s Labor Market Pulse Index (LMPI) quarterly barometer of the nation’s 30 largest healthcare markets shows that key indicators were up in 20 of the nation’s 30-largest healthcare labor markets in Q2. LMPI’s basket of indicators includes temporary health workforce shortages and surpluses, facility and bed closures, announced layoffs and expansions, and local economic trends. In Q1 of 2010, only 11 markets were showing improvement.

LMPI found that near-term demand for healthcare workers is growing fastest in Orlando, San Francisco Bay and Detroit in the second quarter, while the Las Vegas, New York City, and Houston markets ranked at the bottom of the 30 markets tracked. “There are select parts of the country that are still weak,” Cherner says. “But on the whole, the healthcare labor market as measured by our composite index, continues to strengthen.”

Cherner says much of the growth is fueled by expansion plans and large-scale hiring announcements, most notably at the University of Michigan Health System, Ann Arbor; the Henry Ford Health System, Detroit; the University of California San Francisco Mission Bay Hospital; and the University of California-San Diego Medical Center.

“We are seeing folks cut as much as they could over the last couple of years. They can’t cut anymore. At the same time you have all these expansion projects that we have been chronicling over the past year or two that continue, and some of them are coming on line later this year and early next year. You are going to need folks to staff those facilities,” he says.

“Our bet is that in the next two to three quarters you are going to start seeing an increase in hiring. My sense is that there is a lot coming on at the end of this year, and the first quarter of next year. There will be a lot of staffing ahead,” he says.

I hope he’s right.