From layoffs to strategies for improving retention, here's what leaders need to be following regarding the workforce.
Through nearly the first half of 2025, hospitals and health systems continue to wrangle with workforce challenges that are pressuring bottom lines and forcing organizational change.
Hospital CEOs have their hands full balancing the need to create a sustainable workforce with reducing expenses to maintain financial health.
Here are three workforce trends that HealthLeaders has tracked in its recent coverage:
Layoffs
With margins slim and costs mounting, many hospitals have turned to either cutting staff or freezing hiring to save money.
Mass General Brigham made waves in February when it announced it would be undertake the largest layoffs in the health system's history to close a projecting $250 million budget gap over the next two years.
Providence, meanwhile, has paused nonclinical hiring, with president and CEO Eric Wexler citing low reimbursement from payers and elevated labor and supply expenses as factors in the decision.
Across the country, hospitals are feeling a workforce crunch that isn't expected to ease up anytime soon.
Leadership turnover
The turnover isn't just happening among clinical and nonclinical staff—it’s affecting leadership levels as well.
According to a recent survey by B.E. Smith, a division of staffing solutions company AMN Healthcare, 46% of 588 provider executives said they plan to leave their organization in the next year.
In many cases, executives are being forced out. The University of New Mexico Hospital dropped 53 executive roles in April, while Yale New Haven Health announced it was restructuring its management and administration positions.
Targeting leadership cuts can allow hospitals to shed high salaries without sacrificing a large number of staff, but it comes with the downside of disrupting organizational continuity.
The importance of engagement
To hold on to the workers that hospitals don't want to lose, CEOs must prioritize engagement to improve retention.
Disengaged employees are 1.7 times more likely to leave their roles, especially among younger generations, according to a recent report by Press Ganey. The analysis also found that employee engagement fell 0.02 points on a five-point scale in 2024, following a slight improvement in the prior year.
Strengthening culture can go a long way in creating a working environment that staff want to be part of, both in the short- and long-term.
Jay Asser is the CEO editor for HealthLeaders.
KEY TAKEAWAYS
Layoffs and hiring freezes are increasing as hospitals struggle with slim margins and rising labor costs.
Leadership turnover is accelerating, with many executives planning to leave in the next year while hospitals are restructuring.
Employee engagement, especially among younger generations, is critical for retention and battling turnover.