Labor challenges in the industry are expected to mount in the coming years, forcing leaders to be proactive.
The workforce shortage in healthcare isn’t going away anytime soon.
In fact, a report by Mercer consultancy projects a shortage of over 100,000 critical workers nationwide by 2028, which means many hospital and health system CEOs will have to be thoughtful in how they fortify their labor force.
For the study, Mercer used historical data and trends through 2023 to forecast changes to the labor market by state and metro and micro statistical areas.
The analysis revealed that if workforce trends hold, the U.S. will have 18.6 million healthcare workers in 2028, compared to the 16.9 million currently working in the industry. The projected increase isn’t expected to keep pace with demand, with the need for labor growing to around 18.7 million over that period, resulting in a shortage of more than 100,000 workers.
“While that figure may not seem like a crisis in absolute terms, it represents an added burden to a system strained by geographic and demographic disparities in access to care,” the report said.
What’s driving the shortage?
The workforce problem will only get worse as the demand outweighs the supply.
Because Americans are living longer than ever and older people utilize services more, the needs of an aging population will require more workers.
The supply side, however, is heading in the opposite direction. Workers are either leaving the industry or fewer people are entering clinical professions due to factors like burnout, non-competitive compensation, and pandemic-related reasons, Mercer highlighted.
Deficit and surplus
The good news? Not every state will face a deficit of workers as the shortage will vary based on geography and occupation, researchers found.
Populous states like California, Texas, and Pennsylvania are projected to have a workforce that exceeds demand, while states like New York and New Jersey will face greater deficits.
Even states that are expected to have overall surpluses may deal with shortages in a specific occupation though. For example, California and Texas will deal with some of the biggest deficits in physicians, compared to states like Pennsylvania, Massachusetts, and Minnesota having greater surplus.
The supply of registered nurses nationwide is projected to outpace demand with a surplus of nearly 30,000 anticipated by 2028, the report stated. Even still, states like New York, Tennessee, and Massachusetts will face a shortage of RNs.
Mercer noted that nurse practitioners are expected to grow at the fastest average annual rate among the occupations in the study (3.5%), while nursing assistants will grow at the slowest (0.1%).
How CEOs should respond
Understanding how their region will be affected by the workforce shortage in the coming years can give hospital CEOs a better idea of how to improve recruitment and retention.
Especially when it comes to compensation, knowing if there is a shortage of physicians in your state, for example, can impact your decision to offer more competitive salaries to workers in your area or recruit from states with a surplus.
Prioritize the occupations that are critical to expansion of services and fill them as soon as possible, Mercer said. Build out your pipeline to include partnerships with local universities and schools to improve your access to future employees.
Most important of all, focus on the workers that are currently in your organization. Employee turnover is costly in the short and long term, so avoiding the loss of workers should be of utmost importance. That requires investment and attention to well-being measures and getting creative with benefits, such as flexible scheduling and career growth.
Taking the administrative burden off of clinical workers by investing in automation, for example, will not only improve retention, but it will cut down on demand as well, Mercer noted.
“Actions should be prioritized against a long-term vision — discrete actions to address ‘the problem of the day’ will not lead to sustained success and will drain limited resources,” the report said. “The path to lasting success requires comprehensive analysis of data to inform decisions and prioritization of actions based on the highest return on investment.”
Jay Asser is the CEO editor for HealthLeaders.
KEY TAKEAWAYS
Research by Mercer consultancy finds that the U.S. will have a healthcare workforce shortage of over 100,000 critical workers by 2028, when it needs around 18.7 million workers.
Shortages will vary by region and occupation, with some states having a surplus in overall workers, physicians, or nurses.
To get ahead of the curve, CEOs should recognize the trends in their state and use a comprehensive approach to strengthening recruitment and retention efforts.